Royal Caribbean (RCL) AI Stock Analysis

• Market Cap: $88.79B
• Dividend Yield: 0.93%
• Average Volume (3M): 1.94M
• Price to Earnings (P/E): 24.6
• Beta (1Y): 1.63
• Revenue Growth: 12.10%
• EPS Growth: 37.89%
• Country: US
• Employees: 105,950
• Sector: Consumer Cyclical
• Sector Strength: 84
• Industry: Travel Services
• EPS (TTM): 4.38
• Shares Outstanding: 271,627,660
• 10 Day Avg. Volume: 2,056,743
• 30 Day Avg. Volume: 1,942,608
• PEG Ratio: 0.32
• Price to Book (P/B): 7.96
• Price to Sales (P/S): 3.65
• P/FCF Ratio: 30.15
• Enterprise Value/Market Cap: 1.19
• Enterprise Value/Revenue: 6.13
• Enterprise Value/Gross Profit: 12.57
• Enterprise Value/Ebitda: 15.91
• 1Y Price Target: $365.33
• Price Target Upside: 11.76% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 16

• Rating: 74 Outperform
• Price Target: $366.00 ▲(11.96% Upside)

Royal Caribbean's strong financial performance and positive earnings outlook are the most significant factors driving the score. Despite technical indicators suggesting potential short-term weakness, the company's robust earnings guidance and strategic growth plans provide a positive long-term outlook. Valuation is moderate, reflecting balanced market expectations.

Positive Factors

Revenue Growth

The significant revenue growth indicates strong market demand and effective business strategies, positioning the company for sustained expansion.

New Ship Expansion

Securing shipbuilding rights ensures capacity for future growth and innovation, enhancing competitive positioning in the cruise industry.

Cash Flow Management

Strong cash flow management enhances liquidity and supports strategic investments, ensuring financial stability and growth potential.

Negative Factors

High Leverage

High leverage can strain financial flexibility and increase risk, potentially impacting the company's ability to invest in growth opportunities.

Cost Increases

Rising costs can pressure margins and profitability, challenging the company’s ability to maintain operational efficiency over the long term.

Geopolitical Uncertainty

Geopolitical and economic uncertainties can affect consumer confidence and travel demand, posing risks to revenue stability and growth.

Royal Caribbean Business Overview & Revenue Model

Company Description

Royal Caribbean Group (RCL) is a global cruise vacation company that operates several cruise lines, including Royal Caribbean International, Celebrity Cruises, and Silversea Cruises. The company is known for its innovative ships and diverse itineraries, offering travelers unique experiences across various destinations worldwide. Royal Caribbean focuses on providing premium travel experiences and entertainment for families and travelers of all ages, featuring onboard amenities such as dining, entertainment, and recreational activities.

How the Company Makes Money

Royal Caribbean makes money primarily through ticket sales for cruise vacations, which represent a significant portion of its revenue. The company also generates income from onboard spending by passengers, which includes purchases such as specialty dining, shore excursions, spa services, and retail shopping. Additionally, Royal Caribbean earns revenue from beverage packages, Wi-Fi access, and other ancillary services offered during the cruise experience. The company has established partnerships with various travel agencies and online travel platforms to enhance its distribution channels, and it may also engage in promotional partnerships with brands that align with its target markets. Seasonal promotions and loyalty programs further enhance customer retention and drive repeat business, contributing to the company's overall financial success.

Royal Caribbean Financial Statement Overview

Summary

Royal Caribbean has shown a robust financial turnaround with strong growth in revenue and profitability, a healthier balance sheet, and improved cash flow metrics. While the company has effectively managed operational efficiency and cash flow, high leverage remains a concern.

Income Statement

Royal Caribbean has demonstrated a strong recovery with a remarkable revenue growth rate of 22.4% from 2024 to TTM, and consistent improvements in profitability metrics. The TTM gross profit margin stands at 48.76% and the net profit margin at 20.97%, indicating robust operational efficiency and cost management. The EBIT and EBITDA margins are also strong at 26.38% and 38.51% respectively. This performance highlights a return to pre-pandemic levels of profitability and growth.

Balance Sheet

The balance sheet shows improvements with a reduced debt-to-equity ratio of 2.15 and an increased equity ratio of 23.79% in the TTM period. However, the company still carries a significant amount of debt relative to equity, which poses a risk. Return on Equity (ROE) has improved to 39.29%, reflecting enhanced profitability and equity utilization. Overall, while the balance sheet is strengthening, leverage remains a potential risk.

Cash Flow

The cash flow statement reveals a significant growth in free cash flow, improving by 79.57% from 2024 to TTM, and a solid operating cash flow to net income ratio of 1.59, signaling effective cash generation relative to earnings. The free cash flow to net income ratio is 0.99, indicating efficient conversion of earnings to cash. These metrics suggest strong cash flow management and liquidity.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	17.18B	16.48B	13.90B	8.84B	1.53B	2.21B
Gross Profit	8.38B	7.83B	6.13B	2.22B	-1.21B	-556.30M
EBITDA	6.62B	6.09B	4.56B	615.00M	-2.67B	-3.65B
Net Income	3.60B	2.88B	1.70B	-2.16B	-5.26B	-5.80B
Balance Sheet
Total Assets	38.54B	37.07B	35.13B	33.78B	32.26B	32.47B
Cash, Cash Equivalents and Short-Term Investments	735.00M	388.00M	497.00M	1.94B	2.70B	3.68B
Total Debt	19.74B	20.82B	22.13B	23.99B	21.69B	20.00B
Total Liabilities	29.18B	29.34B	30.23B	30.91B	27.17B	23.70B
Stockholders Equity	9.17B	7.56B	4.72B	2.87B	5.09B	8.76B
Cash Flow
Free Cash Flow	3.59B	2.00B	580.00M	-2.23B	-4.11B	-5.70B
Operating Cash Flow	5.74B	5.26B	4.48B	481.00M	-1.88B	-3.73B
Investing Cash Flow	-2.10B	-3.45B	-3.92B	-2.99B	-2.15B	-2.18B
Financing Cash Flow	-3.30B	-1.92B	-1.99B	1.74B	3.04B	9.35B

Royal Caribbean Technical Analysis

• Technical Analysis Sentiment: Neutral
• Last Price: 326.89
• 50DMA: Negative
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For RCL, the sentiment is Neutral. The current price of 326.89 is below the 20-day moving average (MA) of 337.88, below the 50-day MA of 333.28, and above the 200-day MA of 265.93, indicating a neutral trend. The MACD of -2.71 indicates Positive momentum. The RSI at 44.97 is Neutral, neither overbought nor oversold. The STOCH value of 36.72 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for RCL.

Royal Caribbean Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
RCL	74 Outperform	$88.79B	24.64	47.48%	0.93%	12.10%	37.89%
TCOM	73 Outperform	$49.36B	21.00	11.97%	0.37%	17.73%	27.95%
EXPE	72 Outperform	$27.57B	27.27	133.13%	0.54%	5.69%	47.33%
NCLH	70 Outperform	$11.32B	18.02	45.82%	―	5.23%	66.94%
VIK	67 Neutral	$26.74B	32.39	299.67%	―	17.72%	―
MMYT	66 Neutral	$9.01B	107.40	7.91%	―	18.13%	-55.21%
Sector *	61 Neutral	$18.38B	12.79	-2.54%	3.03%	1.52%	-15.83%

Royal Caribbean Corporate Events

Royal Caribbean Secures Financing for New Edge-Class Ship

On June 25, 2025, Royal Caribbean Cruises Ltd. entered into a credit agreement to finance its sixth Edge-class ship, set for delivery in late 2028. The agreement involves a US dollar-denominated term loan, fully guaranteed by BpiFrance Assurance Export, with a floating interest rate and a twelve-year maturity, impacting the company’s financial strategy and stakeholder relations.

Royal Caribbean Announces Leadership Transition for Board

On June 6, 2025, Royal Caribbean Group announced a leadership transition for its Board of Directors. Richard Fain, who has been the Chair since 1988, will step down in Q4 2025, with Jason Liberty, the current President and CEO, succeeding him as Chairman and CEO. John Brock will take on the role of Independent Lead Director, bringing his extensive experience to support the company’s growth and governance. This transition marks a significant shift in leadership aimed at continuing the company’s trajectory of delivering exceptional vacation experiences and long-term value for shareholders.