Royal Caribbean (RCL) AI Stock Analysis

• Market Cap: $95.69B
• Dividend Yield: 0.7%
• Average Volume (3M): 2.10M
• Price to Earnings (P/E): 26.6
• Beta (1Y): 1.67
• Revenue Growth: 12.10%
• EPS Growth: 37.89%
• Country: US
• Employees: 105,950
• Sector: Consumer Cyclical
• Sector Strength: 83
• Industry: Travel Services
• EPS (TTM): 4.38
• Shares Outstanding: 271,627,660
• 10 Day Avg. Volume: 1,801,320
• 30 Day Avg. Volume: 2,097,493
• PEG Ratio: N/A
• Price to Book (P/B): 0.00
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 0.00
• Enterprise Value/Market Cap: 1.10
• Enterprise Value/Revenue: 6.13
• Enterprise Value/Gross Profit: 12.57
• Enterprise Value/Ebitda: 15.91
• 1Y Price Target: $367.64
• Price Target Upside: 4.36% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 16

• Rating: 77 Outperform
• Price Target: $371.00 ▲(5.32% Upside)

Royal Caribbean's strong financial performance and positive earnings call outlook are the most significant factors driving the score. The technical analysis suggests a positive trend, though short-term caution is advised. Valuation is moderate, with some concerns about leverage and geopolitical risks.

Positive Factors

Earnings

RCL reported record results driven by a combination of exceptionally strong demand, record onboard spending, premium pricing, and disciplined cost control, which continue to drive its compelling investment.

Strategic Investments

RCL's cash flow growth will continue to fund strategic capital investments and ongoing fleet expansion, along with the development of new land-based properties and the return of cash to shareholders through dividends and share repurchases.

Technological Advancements

RCL is increasingly leveraging AI to maximize pricing, capture demand quality, maximize yield, optimize marketing initiatives, and improve onboard and pre-board passenger experiences.

Negative Factors

Earnings Guidance

3Q25 EPS guidance of $5.55-5.65 missed Street estimates of $5.72/$5.83.

Yield Guidance

Management lowered the 25E yield high end by 60 bps, reflecting some combination of aggressive prior guidance and slower-than-expected ramp-up.

Yield Performance

Net yield outperformance has eased in 2025.

Royal Caribbean Business Overview & Revenue Model

Company Description

Royal Caribbean Cruises Ltd. operates as a cruise company worldwide. The company operates cruises under the Royal Caribbean International, Celebrity Cruises, Azamara, and Silversea Cruises brands, which comprise a range of itineraries that call on approximately 1,000 destinations. As of February 25, 2022, it operated 61 ships. The company was founded in 1968 and is headquartered in Miami, Florida.

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's financial performance indicates a strong recovery with significant improvements in profitability and cash flow metrics. The income statement is particularly robust with high gross and net profit margins, while the balance sheet shows reduced leverage. However, the relatively high level of liabilities compared to assets poses a potential risk.

Income Statement

Royal Caribbean's income statement shows a strong recovery with a notable improvement in profitability metrics. The TTM gross profit margin stands at 48.23%, indicating robust cost management. Net profit margin has increased to 19.38% in TTM, reflecting enhanced operational efficiency. Revenue growth rate is impressive at 20.57% from 2023 to 2024, demonstrating strong demand recovery post-pandemic. EBIT and EBITDA margins are also strong at 25.67% and 37.43% respectively, highlighting effective cost control and operational leverage.

Balance Sheet

The balance sheet shows improvement in equity with a debt-to-equity ratio of 2.53, reflecting a significant decrease in leverage compared to previous years. Return on equity has improved to 40.79% in TTM, indicating efficient use of shareholder funds. However, the equity ratio remains low at 21.26%, suggesting a relatively high level of liabilities compared to assets, which could pose risks if not managed properly.

Cash Flow

Cash flow metrics indicate solid performance with a strong free cash flow growth rate of 5.66% in TTM. The operating cash flow to net income ratio is 1.71, suggesting healthy cash generation relative to net income. Free cash flow to net income ratio stands at 0.65, showing positive cash flow after capital expenditures. This reflects effective cash management and supports ongoing investments and debt reduction.

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: Positive
• Last Price: 352.27
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For RCL, the sentiment is Positive. The current price of 352.27 is above the 20-day moving average (MA) of 336.05, above the 50-day MA of 333.19, and above the 200-day MA of 259.79, indicating a bullish trend. The MACD of 10.11 indicates Negative momentum. The RSI at 59.42 is Neutral, neither overbought nor oversold. The STOCH value of 66.98 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for RCL.

Royal Caribbean Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
RCL	77 Outperform	$95.69B	26.55	47.48%	0.70%	12.10%	37.89%
TCOM	73 Outperform	$48.37B	20.14	12.94%	0.38%	17.73%	27.95%
EXPE	72 Outperform	$26.59B	26.30	129.04%	0.56%	5.69%	47.33%
NCLH	70 Outperform	$11.60B	18.47	63.57%	―	5.23%	66.94%
VIK	67 Neutral	$27.86B	33.75	34.73%	―	17.72%	―
MMYT	66 Neutral	$9.56B	113.95	22.38%	―	18.13%	-55.21%
Sector *	61 Neutral	$17.95B	12.83	-3.20%	2.97%	1.18%	-14.28%

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.