For most investors, how much a stock's price changes over time is important. This factor can impact your investment portfolio as well as help you compare investment results across sectors and industries.
Another factor that can influence investors is FOMO, or the fear of missing out, especially with tech giants and popular consumer-facing stocks.
What if you'd invested in Royal Caribbean (RCL) ten years ago? It may not have been easy to hold on to RCL for all that time, but if you did, how much would your investment be worth today?
Royal Caribbean's Business In-Depth
With that in mind, let's take a look at Royal Caribbean's main business drivers.
Based in Miami and incorporated in 1985, Royal Caribbean Cruises is a cruise company. It owns and operates three global brands — Royal Caribbean International, Celebrity Cruises and Azamara Club Cruises. Additionally, it has a 50% investment in a joint venture with TUI AG, which operates the brand TUI Cruises.
The company’s cruise brands primarily serve the contemporary, premium and deluxe segments of the cruise vacation industry, which also includes the budget and luxury segments. These brands operate 64 ships. The ships operate on a selection of diverse itineraries worldwide that include roughly 1,000 destinations on all seven continents. As of March 31, 2025, the company had $6.33 billion in customer deposits compared with $5.5 billion in the prior-year period.
The company reports revenues under the following segments — Passenger ticket revenues (69.8% of total revenues in 2024) and Onboard and other revenues (30.2%).
In the third quarter of 2022, the company unveiled a three-year financial performance initiative — the Trifecta Program — thereby articulating longer-term financial objectives. The program emphasizes financial coordinates, including Adjusted EBITDA per APCD, Adjusted EPS and ROIC. During the second-quarter of 2024, the company achieved its Trifecta financial goals 18 months ahead of schedule.
In the first quarter of 2025, the company reiterated its commitment to its “Perfecta Performance Program,” targeting a 20% CAGR in adjusted EPS through 2027 and return on invested capital in the high teens. Royal Caribbean's formula of moderate capacity growth, disciplined cost control and sustained yield improvements is likely to support the same.
Bottom Line
Anyone can invest, but building a successful investment portfolio takes a combination of a few things: research, patience, and a little bit of risk. So, if you had invested in Royal Caribbean a decade ago, you're probably feeling pretty good about your investment today.
A $1000 investment made in May 2015 would be worth $3,454.82, or a 245.48% gain, as of May 14, 2025, according to our calculations. Investors should note that this return excludes dividends but includes price increases.
In comparison, the S&P 500 gained 180.51% and the price of gold went up 155.56% over the same time frame.
Analysts are anticipating more upside for RCL.
Shares of Royal Caribbean have outperformed the industry in the past year. The company reported mixed first-quarter 2025 results, with adjusted earnings beating the Zacks Consensus Estimate and revenues missing the same. The top and bottom lines increased on a year-over-year basis. It has been benefiting from a strong demand environment, a solid WAVE season and robust booking trends. Also, strength in consumer spending onboard and pre-cruise purchases bodes well. It emphasized investing in the digital front, fleet expansion, private destination portfolio and guest experience to drive growth. Earnings estimates for 2025 have increased in the past 30 days, depicting analysts' optimism regarding the stock’s growth potential. However, increased fuel costs, foreign currency risks and an uncertain macroeconomic environment are a concern.
Over the past four weeks, shares have rallied 28.14%, and there have been 6 higher earnings estimate revisions in the past two months for fiscal 2025 compared to none lower. The consensus estimate has moved up as well.
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Royal Caribbean Cruises Ltd. (RCL): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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