What If You Were Missing The Value In Carnival Stock?

Here is why we think Carnival (CCL) stock deserves consideration as a value stock. It is currently trading nearly 11% below its 1 year high, and also trading at a PS multiple which is below the average for the last 3 years. However, it has reasonable fundamentals for its level of valuation.

• Reasonable Revenue Growth: 7.1% LTM and 45.9% last 3 year average.
• Cash Generative: Nearly 11.1% free cash flow margin and 16.4% operating margin LTM.
• No Major Margin Shocks: Carnival has avoided any margin collapse in the last 12 months.
• Modest Valuation: Despite encouraging fundamentals, CCL stock trades at a PE multiple of 14.4
• Opportunity vs S&P: Compared to S&P, you get lower valuation, higher revenue growth, but lower margins

As a quick background, Carnival operates as a leisure travel company offering cruises to around 700 ports worldwide through multiple renowned cruise line brands.

Single stock can be risky, but there is a huge value to a broader diversified approach. Strategic asset allocation and diversification helps you stay invested. Did you know investors who panicked out of the S&P in 2020 lost significant upside that followed? Trefis High Quality Portfolio and Empirical Asset Management’s asset allocation approach are designed to reduce volatility so you can stay the course.

*LTM: Last Twelve Months

But do these numbers tell the full story? Read Buy or Sell CCL Stock to see if Carnival still has an edge that holds up under the hood.

Stocks Like These Can Outperform. Here Is Data

Below are statistics for stocks with same selection strategy applied between 12/31/2016 and 6/30/2025.

• Average 6-month and 12-month forward returns of 12.7% and 25.8% respectively
• Win rate (percentage of picks returning positive) of > 70% for both 6-month and 12-month periods
• Not over dependent on market crashes. During non-crash periods as well, this strategy has 12-month average return of nearly 20% with 67% win rate.

But Consider The Risk

That said, Carnival (CCL) isn’t immune to big market drops. It plunged around 65% in the Dot-Com crash and nearly 69% during the Global Financial Crisis. The 2018 correction trimmed it by about 41%, while the Covid pandemic hit hardest with an 84% slide. The recent inflation shock also caused a steep drop of nearly 80%. Even with positive fundamentals, steep sell-offs are part of the risk. When turmoil hits, even strong tailwinds can’t fully protect stocks like CCL.

But the risk is not limited to major market crashes. Stocks fall even when markets are good – think events like earnings, business updates, outlook changes. Read CCL Dip Buyer Analyses to see how the stock has recovered from sharp dips in the past.

The Trefis High Quality (HQ) Portfolio, with a collection of 30 stocks, has a track record of comfortably outperforming its benchmark that includes all 3 – the S&P 500, S&P mid-cap, and Russell 2000 indices. Why is that? As a group, HQ Portfolio stocks provided better returns with less risk versus the benchmark index; less of a roller-coaster ride, as evident in HQ Portfolio performance metrics.