NCLH to Report Q4 Earnings: Buy Now or Wait for Results?

Norwegian Cruise Line Holdings Ltd. NCLH is scheduled to report fourth-quarter 2025 results on March 2, before the opening bell. In the last reported quarter, the company registered an earnings surprise of 3.5%.

NCLH’s Estimates Revisions

The Zacks Consensus Estimate for fourth-quarter adjusted earnings is pegged at 28 cents per share, indicating a year-over-year rise of 7.7%. In the past 30 days, earnings estimates for the current quarter have been stable. For revenues, the consensus mark is pegged at $2.35 billion, implying a 11.5% year-over-year increase.

What the Zacks Model Unveils

Our proven model doesn't conclusively predict an earnings beat for Norwegian Cruise this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat.

Earnings ESP: Norwegian Cruise has an Earnings ESP of -4.06%. You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.

Zacks Rank: The company carries a Zacks Rank #3 at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

What’s Shaping NCLH’s Q4 Results?

Norwegian Cruise’s fourth-quarter top-line performance is likely to have been aided by a planned increase in short sailings, as it will have the highest mix of shorter itineraries since 2019. This deliberate shift toward closer-to-home Caribbean deployments is expected to broaden demand, particularly from premium families and unit cruise travelers, while improving utilization of the company’s private island assets. With short-sailing capacity set to rise sharply and Caribbean itineraries projected to account for more than half of total capacity, load factors are expected to improve more than 100 basis points year over year to nearly 102%, supporting higher passenger volumes in the quarter.

The company’s top line is also likely to have been aided by resilient core pricing, particularly for the first and second guests in each cabin. While the inclusion of third and fourth passengers, often children, lowered blended pricing, management emphasized that base pricing remained firm. This allowed Norwegian Cruise to balance higher occupancy with net yield growth of approximately 3.5-4% in the quarter, reflecting healthy underlying demand rather than increased promotional intensity.

In addition, revenues are likely to have been aided by stronger onboard and pre-cruise spending, driven by improved digital capabilities and more targeted guest engagement. Enhanced marketing of beverage packages, specialty dining, Wi-Fi, shore excursions and premium onboard experiences pushed pre-cruise sales to record levels. These initiatives are expected to have increased ancillary revenue per passenger and improved total revenue capture per sailing during the quarter.  

For the quarter under review, our model predicts passenger ticket revenues to increase 18.1% to $1,663.8 million on a year-over-year basis. Our model predicts that the number of passengers carried in the fourth quarter of 2025 to increase 13.1% year over year. 

Fourth-quarter profitability is likely to have been aided by disciplined cost control and operating leverage from higher occupancy. Adjusted net cruise costs excluding fuel were essentially flat year over year, even as marketing spends have increased. Management highlighted that incremental third and fourth guests added revenues with minimal marginal cost, supporting margin expansion. Ongoing cost-savings initiatives and efficiency gains further enhanced earnings, allowing modest yield growth to translate into stronger EBITDA and bottom-line performance. 

Our model predicts year-over-year adjusted EBITA growth of 19.4% to $558.8 million.

Price Performance & Valuation

NCLH’s shares have surged 30.6% in the past three months, outperforming the Zacks Leisure and Recreation Services industry and the S&P 500. The stock has also outperformed the other major industry players in the same time frame, with Carnival Corporation & plc CCL rallying 22.9%, Royal Caribbean Cruises Ltd. RCL surging 19.1% and OneSpaWorld Holdings Limited OSW gaining 5.3%.

Price Performance

From a valuation perspective, NCLH is trading relatively cheaply. The company has a forward 12-month price-to-earnings of 9.18X, below the industry average.

P/E (F12M)

Investment Considerations

Investors who already own Norwegian Cruise should continue to hold, as demand remains solid, occupancy trends are favorable and disciplined cost control is supporting improved profitability. However, after a strong pre-earnings rally, much of the near-term optimism appears priced in, limiting upside if results only meet expectations. With no clear earnings-beat signal and sentiment elevated, new investors may be better served waiting for post-earnings clarity or a better entry point.

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This article originally published on Zacks Investment Research (zacks.com).

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