Carnival (NYSE:CCL) Corporation, the world-renowned cruise operator, has demonstrated operational resilience despite its 80% share price drop over the past five years, influenced by factors such as the COVID-19 pandemic, inflation, and rising interest rates. The company reported a record Q3 revenue of $6.9 billion in 2023, a significant increase from $6.5 billion in 2019. According to InvestingPro data, Carnival's revenue for the last twelve months (LTM2023.Q3) was $20.04 billion, indicating a robust year-over-year growth of 108.34%.
Despite these promising figures, Carnival's balance sheet reveals a long-term debt of $29.5 billion as of August 2023. To manage its Q3 interest payments of $559 million, the company projects an adjusted EBITDA of $4.1 to $4.2 billion. Moreover, Carnival faces escalating debt maturities, rising from $2 billion in 2024 to $3.2 billion in 2026, alongside capital expenditures of $4.1 billion in 2024. This aligns with an InvestingPro Tip that Carnival operates with a significant debt burden.
While Carnival's trailing P/E multiple of 6 may seem attractive compared to the S&P 500's average of 25, closer inspection suggests the stock may not be as inexpensive as it initially appears. The company's enterprise value stands at $45.8 billion with a market capitalization of $16 billion. However, InvestingPro's real-time metrics show a different picture, with Carnival's adjusted market capitalization standing at $15.85 billion and a negative P/E ratio of -9.76.
Despite Carnival's operational resurgence, analysts are recommending other stocks over Carnival Corporation due to its financial challenges. The company's future performance will likely depend on its ability to manage its debt while maintaining operational growth amidst ongoing economic uncertainties. This view is supported by an InvestingPro Tip, which states that analysts do not anticipate the company will be profitable this year.
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