QualityDipStocks / Consumer Discretionary · Marine Transportation
Royal Caribbean Cruises RCL
Not in a dip by our rules: 12% below its 52-week high.
A quality company trading well above our fair value estimate.
- Fair value est.
- $173.83−43%
- Market Value
- forming
- Off 52-wk high
- −12%
- Risk vs market
- Highbeta 1.69
5 bullish · 5 bearish See why
Key levels
Every level vs today’s $307.18
- Fair value est.base case$173.83−43.4%
- 52-wk lowlowest close, 1 year$230.30−25.0%
- PriceFri Oct 30 close$307.18you are here
- 52-wk highhighest close, 1 year$348.03+13.3%
Fair value estimate
How the range is computed
Ten-year free-cash-flow DCF. Same 10-year free-cash-flow model as the base: discount rate 9.5% ±1 point and growth 15.0% ±2 points. Bear = 10.5% and 13.0%; bull = 8.5% and 17.0% (both fade to 3%). A model estimate from public filings, not a forecast of where the price will go.
Price is above even the bull case.
What the price implies To be worth today’s price, RCL’s free cash flow would need to grow about 26% a year for five years; our estimate uses 15%.
Risk vs market
How risk vs market is measured
One year of daily returns (Oct 30 to Oct 30, 252 sessions). Beta = how much RCL moved for each 1% move in the S&P 500 (SPY); 1.0 moves with the market. Volatility is the yearly standard deviation of daily returns. Past behavior, not a forecast.
Swings much more than the market, and its own price swings are 3.7× the S&P 500’s.
- Beta vs S&P 500
- 1.69
- Volatility
- 48% vs 13% SPY
- Correlation SPY
- 0.46
- Correlation QQQ
- 0.35
Bull vs bear
Rule-based from the data on this page, strongest first. Not advice.
Top bullish points 5 of 5
GrowthSales compounded 27% a year from FY2022 to FY2025.
GrowthDiluted EPS grew 43% to $15.61 in FY2025.
ProfitabilityReturn on equity of 42% over the last 12 months, up 7 points in two years.
ProfitabilityOperating margin widened to 27.4% in FY2025 from 20.7% in FY2023 (SEC filings).
QualityPasses all four of our quality checks: cash generation, returns on capital, growth and balance sheet.
Top bearish points 5 of 5
ValuationOur DCF fair value estimate is $173.83, 43% below the price.
GrowthSales growth slowed to 10% over the last 12 months, from 27% a year over the prior three fiscal years.
Cash returnsFree cash flow fell 26% over the last 12 months vs the 12 months before.
ValuationPrice / free cash flow of 55×: a rich price for the cash it generates today.
Balance sheetDebt / equity of 1.9×, above the 0.9× median for the 119 Consumer Discretionary companies we cover.
Who’s talking about it
Notable investors, executives, analysts and public figures on Royal Caribbean Cruises in the last 48 hours. Headlines as published, each linked. Their words, not ours.
No notable mentions in the last 48 hours. Checked Nov 1, 9:09 PM ET.
Compare with peers
Closest in size in Marine Transportation
All fundamentals
P/E 18.1 · FCF yield 1.8% · ROE 42%
Valuation
- P/E
- 18.1×3-yr-end avg 19.8× · Consumer Discretionary median 20.9×
- Price / FCF
- 54.5×
- FCF yield
- 1.8%
- EV / EBITDA
- 14.5×
- Price / sales
- 4.30×
- Price / book
- 7.03×
- Market cap
- $82.3Bprice × diluted shares
- Enterprise value
- $104B
Growth
- Revenue, 12 months
- $19.1B
- Sales growth, 12 months
- +9.7%vs the 12 months before
- Sales growth, 3 yrs
- +26.6%/yrfrom FY2022
- Diluted EPS, 12 months
- $16.90
- EPS growth, last FY
- +42.7%
- Net income, 12 months
- $4.6B
- Net income growth
- +12%12 months vs before
Profitability
- Gross margin
- 49.1%
- Operating margin
- 27.6%
- Net margin
- 23.8%
- FCF margin
- 7.9%
- Return on equity
- 42%
- Return on invested capital
- 16%
Balance sheet
- Cash & short-term inv.
- $851M
- Total debt
- $22.4B
- Net cash
- −$21.5B
- Debt / equity
- 1.91×
- Interest coverage
- 4.9×operating income / interest
Cash flow & returns
- Free cash flow, 12 months
- $1.5B
- FCF growth, 12 months
- −26%
- Dividend yield
- 1.64%$1.3B paid
- Payout ratio
- 30%
- Buybacks, 12 months
- $1.5B1.9% of market cap
- Share count, 1 year
- −2.2%diluted shares vs a year ago
- Stock-based comp
- $133M
Trailing 12 months to Sep 30, 2026; balance sheet at Sep 30, 2026. From Royal Caribbean Cruises’s SEC filings. Sparklines show up to six fiscal years. n/a means we don’t hold that number, with the reason. How each is computed.
Valuation details
DCF $173.83 · FCF value $139.54
Assumes 15.0% growth for 5 years (revenue grew 26.6% a year FY22–FY25; capped at 15%), fading to 3%; 9.5% discount rate, 3% terminal growth. FCF base $5.63 a share (trailing 12 months to Sep 30, 2026), from the 10-Q filed Oct 27, 2026.
Setup & signals
No setup armed
No setup armed, so there’s no trigger or stop to track yet. Reversal signal rules only arm once a company is in a dip.
Momentum & 52-week range
RSI 67 · 5 days +11.1%
The business
FCF $1.5B · Sales +9%
- Free cash flow, 12 months$1.5B
- Free-cash-flow yield1.8%
- Free-cash-flow margin8%
- Gross margin49%
- Operating margin28%
- Return on invested capital12%
- Return on equity44%
- Sales growth (latest quarter vs year-ago quarter)+9%
- Net debt / EBITDA2.9×
Information only, not investment advice. Fair value estimates and talking points are rule-based model output from public data and can be wrong; stop levels are reference points, not orders. How every number is computed.
Get a text when RCL fires a reversal signal
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