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RISK CONCERN
Investment Strategy, Risk Analysis, and Insights by Chartered Professionals
Royal Caribbean Cruises Ltd. (XNYS:RCL) In-Depth Stock/Fundamental/Options Analysis Today
Primary Facts
RCL
Name:
ROYAL CARIBBEAN CRUISES LTD. (XNYS:RCL)
Sector:
- 1891933.00K
Industry:
Travel Services
CEO:
Mr. Richard Fain
Total Employees:
85,000
Our Technological Advancement Rating
Our Rating:
A+
Technological advancement compared to industry is 933.09% higher
ANALYSIS OF ALL CRITICAL FACTORS & RISKS RELATED TO THE STOCK & FUNDAMENTAL/LONG-TERM ANALYSIS OF ROYAL CARIBBEAN CRUISES LTD.(RCL) AS PER DATA ANALYSIS OF LAST 3 YEARS AND COMPARISON WITH COMPETITORS/PEERS, AND TRAVEL SERVICES INDUSTRY. DATE: 07/09/2022
Primary Targets/Price Insights
Previous Close ($) :
41
One Month Price Target:
$41.55
Six Month Price Target :
$44.33
Likely Price in One Year's Time:
Ticker:
$47.65
Likely Trading Range Today Under (Normal Volatility)
$40.63
Price Upper limit ($) :
$41.35
Price Lower limit ($) :
Crash Risk Prep/Key Price Levels (High Volatility/Risk)
Price, as per data analysis, isn't likely to fall below:
Today:
$36.64
This week:
$31.24
This month :
$21.49
Other Primary facts
Market Cap:
10.68B
Market Cap Classification:
Mid Cap
Number of Shares
IPO Date:
255.06M
Best/Worst Daily Performance (Last 3+ Years)
Highest Daily Appreciation:
28.79%
-31.78%
Worst Daily Decline:
Our Options Trading Entry Points
Iron Condor entry points for options expiring in 1 week's time
Low risk (<2%) entry points
Buy Call:
Sell Call:
Buy Put:
Sell Put:
$61.26
$52.08
$20.74
$29.92
Medium risk (<10%) entry points
Buy Call
Sell Call
$49.09
Buy Put:
Sell Put:
$47.13
$32.89
$34.87
These entry points can be used for other strategies, such as butterflies, straddles, etc.
Risk-Adjusted returns (Sharpe Ratio) of
RCL
Sharpe Ratio:
-0.67%
Comparison:
RCL, is amongst the top 40% stocks with lowest risk-adjusted returns
Sharpe ratio is -348.48% lower than the industry
& is -129.22% lower than the market/S&P 500 average
Average Returns/Yield of
RCL
Daily returns:
-0.03%
Weekly returns:
-0.13%
Monthly returns:
-0.51%
Yearly returns:
3.35%
Comparison of returns:
Average annual returns/yield (last 3 years) is -283.30% below industry average
Classification:
RCL, is amongst the top 40% lowest yielding stocks in terms of daily returns
Results of T-Test of Returns:
0.45
Statistical test of Returns:
RCL has yielded returns statistically similar to the market
Volatility (measured by Standard Deviation)
Daily Volatility:
5.17%
Weekly Volatility:
11.56%
Monthly Volatility:
23.12%
Yearly Volatility:
80.07%
Volitlilty of last five days (Measured by Standard Deviation)
Average Volatility of this Week:
1.12%
Volatility in last five trading days has been -78.38% below long-term volatility
Value at Risk Analysis (VaR)
Daily VaR:
-10.64%
Weekly VaR:
-23.79%
Monthly VaR:
-47.59%
How Much Can the price of
RCL
Decline in a Recession?
Likely price decline in a recession:
Base case (decline):
-42%
Worst case (decline):
>85%
This translates to price declining to:
$23.62
This translates to price declining to:
$6.15
Severe Crash Probability
Risk of crash in next 6/12 months: Low (<25%)
What is Value at Risk (VaR)?
Risk Fundamentals
RCL is a 235.87% riskier investment compared to the market/S&P 500 & is 187.74% riskier than Nasdaq (IXIC)
Risk (measured by volatility) is 13.32% above industry average
Overall, it is amongst the top 50% most risky stocks
Beta Examination of
RCL
Beta in relation to market/S&P 500--2.41
Expected beta in 1 year's time:
1.635
Expected beta in 3 year's time:
2.313
Unlevered (debt free) Beta:
-
Beta in relation to Nasdaq (XNAS):
1.348
Beta in relation to all global stocks::
1.227
Beta Comparison & Analysis
Beta of competitors/peers::
1.41
Beta is 71.27% higher than peers
Average Industry Beta:
1.849
Beta is 30.54% above industry average
Sustainable Growth Rate Analysis
Sustainable growth rate for this stock/firm:
-
-
Alpha provided | Alpha Analysis
Alpha provided:
-0.258
Alpha is 107.12% above industry average alpha yield
Alpha is -1644% below the market average
Analysis of Cost of Capital of
RCL
Equity cost of capital:
0.197
Equity cost of capital is 24.46% above industry mean WACC
Unlevered (without debt) cost of capital:
-
Before-tax cost of debt:
5.61%
After-tax cost of debt:
4.44%
Overall debt rating:
Lower BB medium grade (Fifth highest grade)
Weighted average cost of capital (WACC):
4.44%
WACC is 4.94% above industry mean WACC
Key Per-Share Metrics & Analysis
Revenue per share:
$10.00
Revenue growth rate per share of (3Y):
2.62
Annual revenue growth rate is 272.38% above the industry average
EPS:
-$20.79
Expected Annual growth rate of EPS (3Y):
0.00%
-
Free cash flow (FCF) per share:
-
Balance sheet equity growth per share: -100.00%
Equity growth rate per share is 200.31% higher than the industry
Debt per share
$80.25
EBITDA per share
-$10.49
Valuation Analysis Today of
RCL
P/E Ratio:
0
P/E Ratio of Competitors/Peers:
9.56
P/E ratio is -100.00% lower than main peers & is higher than the industry
-
RCL is -100.39% undervalued if valued using industry average P/E ratio
Share value as per dividend discount (DDM) model: $13.85
Present value of the expected future dividends only: $7.92
P/S (Price to Sales ratio):
4.1
Price to sales ratio is -53.35% below the industry mean
P/B (Price to book value ratio):
2.62
-
-
Net income growth rate (3Y):
-340.13%
Net income growth rate is -355.11% lower than the industry average net income growth rate
Dividend Analysis
-
Dividend yeild: 3.80%
Previous Dividend: $0.78
Previous adjusted dividend: $0.78
Previous Dividend: $1.56
-
-
Average dividend payment (long-term): $0.78
Average dividend increase/decrease (growth rate) % per period: 0.00%
-
-
-
Previous dividend payment date: 04/06/2020
Previous dividend record date: 03/06/2020
Previous dividend declaration date: 20/02/2020
Dividend History:
2020-03-05--$0.78
--$0.00
--$0.00
2019-12-19--$0.78
--$0.00
--$0.00
-
In-depth Debt & Leverage Analysis
Debt to equity ratio:
513.11%
Net debt to equity ratio:
529.76%
Debt to assets ratio:
62.14%
Net debt to assets ratio:
64.15%
Debt-to-asset ratio is -25.21% below industry average
Ability to repay debt:
Interest coverage ratio:
-2.06
Interest coverage ratio is -26.42% less than industry average
Looking forward:
Debt growth rate:
8.35%
Annual debt growth is 1% higher than industry average debt growth rate
Debt repayment rate in last quarter: 4.69%
Analysis of Key Statistics
Correlation of price movement with the market:
0.56
Statistical significance of correlation:
RCL has a statistically significant correlation with the market
Average Correlation of the industry with the market:
0.558
Stock price is 0.31% more correlated with the market, compared to the industry average correlation
R Squared (percentage of price movement explained by movement of the market):
0.558
Correlation of price movement with Nasdaq (^IXIC):
0.019
Covariance of price movement with the market:
0.058
Kurtosis
7.05
Returns have a significant fat-tails (leptokurtic), i.e., returns considerably higher or lower than the mean returns are more probable, compared to assets with normally distributed returns
Skewness of returns:
0.132
Returns are, approximately, symmetrical
Fundamental Analysis & Dupont Analysis of
RCL
Gross Profit Margin Ratio:
-840%
Operating Profit Margin Ratio:
-153.78%
Operating profit margin is -57.33% lower than the industry
Net Profit Margin Ratio:
-840%
Effective Tax Rate:
-
-
Dupont Method
Net Profit Margin
Return on Equity Ratio (ROE):
×
ROA
=
×
-132.77%
Return on equity (ROE) is 114.80% higher than the industry
Financial Leverage
Asset Turnover Ratio (ROA):
-16.08%
Return on assets (ROA) is 39.76% higher than the industry
Financial Leverage:
2.6x
Current Ratio:
0.4
Current ratio is -75.18% below industry average
Cash Conversion Cycle (days):
27.3
Cash conversion cycle is -68.75% below industry average
The remaining useful life of property plant & equipment is: 0.0 years
Stock based compensation to net income ratio:
-0.43%
In-depth Efficiency Analysis
Revenue generated per employee:
30.0K
Each employee generates -89% less revenue than industry average revenue per employee
EBITDA generated per employee:
- 31.5K
Each employee generates 276% more EBITDA than industry average revenue per employee
Profit generated per employee:
- 62.3K
Each employee generates -10% less net income/profit than industry average revenue per employee
Free cash flow (FCF) generated per employee:
- 22.3K
Each employee generates -211% less free cash flow than industry average revenue per employee
Assets/Capital per employee
350.2K
Each employee generates -211% less free cash flow than industry average revenue per employee
Research & Development (R&D) Analysis
-
-
Competitors/Peer firms of
RCL
MGM RESORTS INTERNATIONAL (XNYS:MGM)
CHEWY, INC. (XNYS:CHWY)
LB Group Co., Ltd. (XSHE:002601)
GENUINE PARTS COMPANY (XNYS:GPC)
CARMAX, INC. (XNYS:KMX)
NVR, Inc. (XNYS:NVR)
INTERNATIONAL PAPER COMPANY (XNYS:IP)
WAYFAIR INC. (XNYS:W)
DARDEN RESTAURANTS, INC. (XNYS:DRI)
Current Analyst Ratings
Strong buy�42%
Buy�29%
Hold�21%
Sell�0%
Strong sell�0%
Overall analyst sentiment is: Strong buy
Income Statement
Period:
TTM
Date:
3/31/22
Revenue:
2.55B
Cost of Revenue:
Gross Profit:
R&D Expense
General & Admin Expenses:
Selling, General & Admin Expenses
Sales and Marketing Expenses
Other Expenses :
Operating Expenses :
Cost & Expenses :
Interest Income:
Interest Expenses:
Depreciation & Amortization:
EBITDA:
Operating Income:
Other Income Expenses:
Income Before Tax:
Income Tax Expense:
Net Income:
Balance Sheet
Date:
Calendar Year:
Period:
Cash & Cash Equivalents:
Short Term Investments:
Cash & Short Term Investments:
Net Receivables:
Inventory:
Other Current Assets:
Total Current Assets:
PP&E:
Goodwill:
Intangible Assets:
Long Term Investments:
Tax Assets:
Other Non-Current Assets:
Total Non-Current Assets:
Other Assets:
Total Assets:
Accounts Payable:
Short Term Debt:
Tax Payables:
Deferred Revenue:
Other Current Liabilities:
Total Current Liabilities:
Long Term Debt:
Other Non-Current Liabilities:
Total Non Current Liabilities:
Other Liabilities:
Total Liabilities:
Common Stock:
Retained Earnings:
Accumulated Other Comprehensive Loss:
Other Total Stockholders' Equity:
Total Stockholders' Equity:
Total Liabilities and Stockholders' Equity:
Total Investments:
Total Debt:
Net Debt:
3.56B
- 1009444.00K
-
-
1.51B
-
1.32B
2.83B
15.23M
1.30B
1.32B
- 2676842.00K
- 3920311.00K
- 5295919.00K
- 5295898.00K
-
- 5295919.00K
Statement of Cash Flow
Date:
Period:
339.47M
Differed Income Tax :
- 3067.00K
Stock Based Compensation :
22.84M
Change in Working Capital :
214.02M
Accounts Receivables:
-
Other Working Capital:
406.53M
Other Non-Cash Items:
65.04M
Net Cash Provided by Operating Activities:
- 528847.00K
Investments in PP&E:
- 1363086.00K
Net Acquisitions:
-
Purchases of Investments:
- 77853.00K
Sales/Maturities of Investments:
Other Investing Activities:
Net Cash Used for Investing Activities:
Debt Repayment:
Common Stock Issued:
Common Stock Repurchased:
Dividend Paid:
Other Financing Activities:
Net Cash Used Provided by Financing Activities:
Effect of FOREX on Changes in Cash:
Net Changes in Cash:
Cash at End of Period:
Cash at Beginning of Period:
Operating Cash Flow:
Capital Expenditure:
Free Cash Flow (FCF):
3/31/22
2022
Q1
1.97B
-
1.97B
506.16M
179.47M
522.81M
3.18B
27.48B
809.44M
-
-
-
1.48B
29.76B
-
32.94B
668.16M
2.63B
-
3.57B
1.14B
8.01B
20.47B
476.47M
20.94B
-
28.95B
2.83M
- 718609.00K
- 494609.0K
5.20B
March 31, 2022 at 6:00:00 AM
6.39B
3.99B
32.94B
-
23.10B
21.1B
5.65M
- 7852.00K
- 1443141.00K
- 1007632.00K
-
-
-
2.25B
1.24B
991.00K
- 733266.00K
1.97B
2.70B
- 528847.00K
- 1363086.00K
- 1891933.00K
Our Proprietary Portfolio Rating
Our Rating:
D
Price Forecast/Expected Price in Next 5 Years of
RCL
2023
2024
2025
2026
2027
$47.80
$55.55
$64.57
$75.04
$87.22