Royal Caribbean Cruises Ltd. (RCL)

FairStock Score: 50/100 — MIXED

Key Financials

AI Analysis

AI-generated, general educational analysis — not personal investment advice.

I approach Royal Caribbean as a consumer-cyclical cruise operator, not a bond-like compounder. The business has real scale: 69 ships, 107,950 employees, and brands such as Royal Caribbean International, Celebrity Cruises, and Silversea. Recent filed results show a recovery: FY2023 net income of $1.7B, FY2024 net income of $2.9B, and FY2025 net income of $4.3B; FY2025 revenue was $17.9B and diluted EPS was $15.61. In fiscal Q2 2026, the quarter ended 2026-06-30, revenue was $4.8B, net income was $1.1B, diluted EPS was $4.20, and margin was 23.34%. But in fiscal Q2 2025, the quarter ended 2025-06-30, net income was $1.2B and diluted EPS was $4.41, so the latest comparable quarter slipped. The balance sheet demands caution: FairStock shows debt-to-equity of 2.25, an Altman Z-score of 1.50, ROCE of 7.68%, and trailing free cash flow of negative $416.0M, a -0.6% FCF yield. ROE is 44.67%, but leverage flatters it. At the 2026-10-13 close of $281.51, FairStock calculates P/E of 17.38, P/B of 7.36, and a Graham Number of $118.11, leaving a -138.35% margin of safety. The market is paying a premium for future growth and brand strength. FairStock labels it a TURNAROUND - Returned to profit after a loss within the last three years. That fits: the earnings rebound is real, but cyclical demand, high fixed costs, fuel, and debt make it less predictable. I see a good operating business, but not a bargain on these figures.

In plain English: Royal Caribbean runs cruise ships under several brands. The business is solidly profitable, but it carries a lot of debt and recently spent more cash than it brought in. At the recent price, the shares look expensive compared with the company's accounting value and a conservative value estimate.

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Data as of 2026-10-13 close · note generated 2026-10-15 · model deepseek-flash

Sources (SEC EDGAR): fiscal Q2 2026 10-Q (period ended 2026-06-30) · fiscal Q1 2026 10-Q (period ended 2026-03-31) · fiscal Q3 2025 10-Q (period ended 2025-09-30) · fiscal Q2 2025 10-Q (period ended 2025-06-30) · FY2025 10-K (period ended 2025-12-31) · FY2024 10-K (period ended 2024-12-31) · FY2023 10-K (period ended 2023-12-31)

Fundamentals from company filings and market-data providers; prices are end-of-day, not real-time. AI-generated analysis is general and educational — not personal investment advice. Scoring methodology · Score test · Disclaimer