U.S. markets closed
  • S&P Futures

    4,294.25
    -47.25 (-1.09%)
     
  • Dow Futures

    33,724.00
    -331.00 (-0.97%)
     
  • Nasdaq Futures

    13,986.75
    -171.75 (-1.21%)
     
  • Russell 2000 Futures

    1,943.20
    -29.50 (-1.50%)
     
  • Crude Oil

    86.78
    -0.57 (-0.65%)
     
  • Gold

    1,816.00
    -13.70 (-0.75%)
     
  • Silver

    23.33
    -0.47 (-1.98%)
     
  • EUR/USD

    1.1230
    -0.0015 (-0.13%)
     
  • 10-Yr Bond

    1.8480
    +0.0650 (+3.65%)
     
  • Vix

    31.96
    +0.80 (+2.57%)
     
  • GBP/USD

    1.3441
    -0.0022 (-0.16%)
     
  • USD/JPY

    114.6250
    -0.0350 (-0.03%)
     
  • BTC-USD

    36,193.10
    -949.11 (-2.56%)
     
  • CMC Crypto 200

    823.03
    -32.79 (-3.83%)
     
  • FTSE 100

    7,469.78
    +98.32 (+1.33%)
     
  • Nikkei 225

    26,321.33
    -690.00 (-2.55%)
     

Shareholders have faith in loss-making Royal Caribbean Cruises (NYSE:RCL) as stock climbs 5.3% in past week, taking one-year gain to 47%

  • Oops!
    Something went wrong.
    Please try again later.
·2 min read
In this article:
  • Oops!
    Something went wrong.
    Please try again later.
  • RCL

The simplest way to invest in stocks is to buy exchange traded funds. But you can significantly boost your returns by picking above-average stocks. For example, the Royal Caribbean Cruises Ltd. (NYSE:RCL) share price is up 47% in the last 1 year, clearly besting the market return of around 31% (not including dividends). That's a solid performance by our standards! On the other hand, longer term shareholders have had a tougher run, with the stock falling 18% in three years.

Since the stock has added US$1.1b to its market cap in the past week alone, let's see if underlying performance has been driving long-term returns.

Check out our latest analysis for Royal Caribbean Cruises

Given that Royal Caribbean Cruises didn't make a profit in the last twelve months, we'll focus on revenue growth to form a quick view of its business development. Generally speaking, companies without profits are expected to grow revenue every year, and at a good clip. That's because it's hard to be confident a company will be sustainable if revenue growth is negligible, and it never makes a profit.

In the last year Royal Caribbean Cruises saw its revenue shrink by 88%. The stock is up 47% in that time, a fine performance given the revenue drop. We can correlate the share price rise with revenue or profit growth, but it seems the market had previously expected weaker results, and sentiment around the stock is improving.

You can see how earnings and revenue have changed over time in the image below (click on the chart to see the exact values).

earnings-and-revenue-growth
earnings-and-revenue-growth

Royal Caribbean Cruises is well known by investors, and plenty of clever analysts have tried to predict the future profit levels. So we recommend checking out this free report showing consensus forecasts

A Different Perspective

It's good to see that Royal Caribbean Cruises has rewarded shareholders with a total shareholder return of 47% in the last twelve months. Since the one-year TSR is better than the five-year TSR (the latter coming in at 4% per year), it would seem that the stock's performance has improved in recent times. In the best case scenario, this may hint at some real business momentum, implying that now could be a great time to delve deeper. I find it very interesting to look at share price over the long term as a proxy for business performance. But to truly gain insight, we need to consider other information, too. Even so, be aware that Royal Caribbean Cruises is showing 2 warning signs in our investment analysis , and 1 of those is a bit unpleasant...

If you are like me, then you will not want to miss this free list of growing companies that insiders are buying.

Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on US exchanges.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.