Compared to pre-pandemic prices, Norwegian Cruise Line stock still has a lot of catching up to do.
It’s amazing how things change in just a few months. Five years ago, Norwegian Cruise Line (N.C.L.H. 2.31%) Stocks were doing well and the travel market seemed perfectly stable.
Then the COVID-19 pandemic hit and cruise activity ground to a halt. Now, in mid-2024, investors can see Norwegian Cruise Line’s recent progress, but for a variety of reasons, the stock is far from a full recovery.
What happened to the $1,000 I invested in Norwegian Cruise Line stock?
So let’s say you were down on your luck and invested $1,000 in Norwegian Cruise Line five years ago when its shares were trading at around $49. With the stock price now at around $19, that would represent a drop of 61%.
So a $1,000 investment would currently be worth about $390.Clearly, times are tough in the rough waters of the post-pandemic cruise line market.
This isn’t to suggest that Norwegian is doomed. The company has just released its Q1 2024 financial results, and it’s far from it. Specifically, Norwegian’s revenue increased 20% year over year to $2.2 billion, and its adjusted net loss turned from $127.7 million in the same period last year to an adjusted net income of $69.5 million in Q1 2024.
The market is still not convinced
Lockdowns are old news and Norwegian Cruise Line’s ships are sailing, so why is the market still reluctant to bid up the stock price, despite Norwegian’s lackluster performance since the recovery?
The most obvious culprit is rising consumer prices, and while the headline numbers seem to be slowly improving, middle-class Americans are still feeling the pain. Bank of America Analysts said cruise line operators such as Norwegian Cruise Line no longer have the pricing power they once had.
Plus, with many investors shifting money to large tech stocks, Norwegian Cruise Line shares may be getting left behind in the flow to the Magnificent Seven. But the shift could work both ways, and the next five years could be a reward for patience for Norwegian Cruise Line shareholders.
Bank of America is an advertising partner of The Ascent, a subsidiary of The Motley Fool. David Moardel has no investment in any of the stocks mentioned. The Motley Fool invests in and recommends Bank of America. The Motley Fool has a disclosure policy.
