Yahoo Finance Where Norwegian Cruise Line Holdings Ltd (NYSE:NCLH) Stands In Terms Of Earnings Growth Against Its Industry
Increase in profitability and industry-beating performance can be essential considerations in a stock for some investors. In this article, I will take a look at Norwegian Cruise Line Holdings Ltd’s (NYSE:NCLH) track record on a high level, to give you some insight into how the company has been performing against its historical trend and its industry peers. View out our latest analysis for Norwegian Cruise Line Holdings
Did NCLH’s recent earnings growth beat the long-term trend and the industry?
NCLH’s trailing twelve-month earnings (from 31 March 2018) of US$801.12m has jumped 28.85% compared to the previous year. However, this one-year growth rate has been lower than its average earnings growth rate over the past 5 years of 31.83%, indicating the rate at which NCLH is growing has slowed down. Why could this be happening? Well, let’s look at what’s transpiring with margins and if the entire industry is feeling the heat.
Over the last few years, revenue growth has fallen behind which suggests that Norwegian Cruise Line Holdings’s bottom line has been driven by unsustainable cost-reductions. Eyeballing growth from a sector-level, the US hospitality industry has been growing its average earnings by double-digit 15.65% over the previous twelve months, and 11.97% over the past half a decade. This means that any tailwind the industry is gaining from, Norwegian Cruise Line Holdings is capable of leveraging this to its advantage.
In terms of returns from investment, Norwegian Cruise Line Holdings has not invested its equity funds well, leading to a 14.21% return on equity (ROE), below the sensible minimum of 20%. However, its return on assets (ROA) of 7.26% exceeds the US Hospitality industry of 6.96%, indicating Norwegian Cruise Line Holdings has used its assets more efficiently. And finally, its return on capital (ROC), which also accounts for Norwegian Cruise Line Holdings’s debt level, has increased over the past 3 years from 3.72% to 7.37%.
What does this mean?
Norwegian Cruise Line Holdings’s track record can be a valuable insight into its earnings performance, but it certainly doesn’t tell the whole story. Companies that have performed well in the past, such as Norwegian Cruise Line Holdings gives investors conviction. However, the next step would be to assess whether the future looks as optimistic. You should continue to research Norwegian Cruise Line Holdings to get a more holistic view of the stock by looking at:
Future Outlook: What are well-informed industry analysts predicting for NCLH’s future growth? Take a look at our free research report of analyst consensus for NCLH’s outlook.
Financial Health: Is NCLH’s operations financially sustainable? Balance sheets can be hard to analyze, which is why we’ve done it for you. Check out our financial health checks here.
Other High-Performing Stocks: Are there other stocks that provide better prospects with proven track records? Explore our free list of these great stocks here.
NB: Figures in this article are calculated using data from the trailing twelve months from 31 March 2018. This may not be consistent with full year annual report figures.
To help readers see pass the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned.
