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Norwegian shares sink despite record quarter
11/4/2025, 11:13:45 PM
Economic Summary
- Norwegian Cruise Line (NCLH) reported record revenue, record EBITDA, and record bookings in Q3, but the stock fell as investors sought different signals about sustainable yield growth.
- Management said post-COVID yield jumps were abnormal and now expects long-term net yield growth in the low- to mid-single-digit range while keeping costs to slow inflationary increases.
- NCLH has expanded EBITDA margins by roughly 600 basis points over two years and expects about 200 more basis points of margin expansion in 2026, pointing to improving profitability.
- Forward bookings are strong mainly for 2026 across NCLH's three brands, Q4 ships are substantially filled with implied high occupancy (management cited ~102%), suggesting resilient consumer demand for experiences.
- The NCL brand is shifting toward premium families (not lower-end), which management says improves per-cabin economics when three or four people share a cabin, and new amenities like a water park may boost family demand.
Bullish
- Record revenue, EBITDA, and bookings indicate strong demand.
- Management achieved 600 bps EBITDA margin expansion and expects another 200 bps in 2026.
- Strong forward bookings for 2026 and high Q4 occupancy (ships substantially filled).
- Premium family strategy raises per-cabin economics when cabins have 3–4 guests.
Bearish
- Investors punished the stock despite record results, signaling market skepticism about sustainability.
- Yield growth that surged post-COVID may not continue, limiting revenue upside.
- Focus on families risks attracting more price-sensitive customers in weaker macro periods.
Bullish tickers
NCLH
Bearish tickers
NCLH
NCLH
Bullish
Reported record revenue, EBITDA, and bookings; expanded EBITDA margin ~600 bps with ~200 bps more expected in 2026, and strong forward bookings indicate durable demand.
Bearish
Investors reacted negatively despite record results; management warns that post-COVID yield surges were abnormal and long-term yield growth will be modest, constraining near-term upside.
People mentioned
Harry SommerContessa