Major cruise line companies shares and P/S
Major cruise line companies shares market trend, such as Carnival Corporation (NYSE: CCL and NYSE: CUK), Royal Caribbean (NYSE:RCL) , and Norwegian Cruise Line Holdings (NASDAQ: NCLH), shows that recently the stock values in 2020 plunged after that industry leader Carnival announced the company suffered a $2.9 billion net loss from its last quarter. The stock value lost the 10% and the others followed the negative trend. But shortly after they went up again: Carnival and Royal Caribbean stocks both bounced back up 2.7%, while Norwegian Cruise went up 2.9%.
The P/S ratio applied to the cruise business
Major cruise line companies shares, have recently achieved one of the lowest price-to-sales (P/S) ratio in the last trailing 12 months (TTM). Why the P/S ratio could give a reliable indication of the health of a business on the short term? First of all because the P/S ratio is an effective tool in comparing comapanies within the same industry. Second, the P/S ratio is a key analysis and valuation tool that shows how much investors are willing to pay per dollar of sales for a stock and last but not least, cruise vessels are by definition cash-flow producers: on-board revenues are the major source for the company’s cash flow https://stellaconsulting.ch/asset-management-valuation-methods/. For a start-up business, the P/S ration can be substituted as a rough measure of a potential business’s value. A business with a high sales growth potential could have a higher P/S ratio, showing how much an investor would be willing to pay for the stock for each dollar of sales which will be generated in the future. For consolidated business, going through a delicate financial moment such as today the cruise line companies, it indicates the ability to maintain the revenues stream consistent in the short run. The P/S ratio can be calculated either by dividing the company’s market capitalization by its total sales over a designated period (usually twelve months) or on a per-share basis by dividing the stock price by sales per share.
With a constant approach to the reopening and the full recovering of the cruise industry, it’s recommended to keep monitoring the P/S ratio, hence the market trend of the major cruise line companies shares, as indicator of good management and a strong business model https://www.hospitalitynet.org/author/148004665/giulio-stella.html.