Is Market Overlooking CUK Right Now?
Here is why we think Carnival (ADR) (CUK) deserves consideration as a value stock.
- Reasonable Revenue Growth: 10.8% LTM and 81.1% last 3 year average.
- Cash Generative: Nearly 10.8% free cash flow margin and 16.2% operating margin LTM.
- No Major Shocks: CUK has avoided any large revenue collapses.
- Modest Valuation: Despite encouraging fundamentals, CUK trades at a PE multiple of 14.1
- Opportunity vs S&P: Compared to S&P, you get lower valuation, higher revenue growth, and lower margins
Carnival (ADR) operates leisure cruise travel to around 700 ports globally through multiple brands, serving markets in the US, Canada, Europe, Australia, New Zealand, Asia, and beyond.
| CUK | S&P Median | |
|---|---|---|
| Sector | Consumer Discretionary | – |
| Industry | Hotels, Resorts & Cruise Lines | – |
| PE Ratio | 14.1 | 23.5 |
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| LTM* Revenue Growth | 10.8% | 5.0% |
| 3Y Average Annual Revenue Growth | 81.1% | 5.8% |
| Min Annual Revenue Growth Last 3Y | 10.8% | -0.3% |
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| LTM* Operating Margin | 16.2% | 18.8% |
| 3Y Average Operating Margin | 6.7% | 17.7% |
| LTM* Free Cash Flow Margin | 10.8% | 13.2% |
*LTM: Last Twelve Months
But do these numbers tell the full story? Read Buy or Sell CUK Stock to see if Carnival (ADR) still has an edge that holds up under the hood.
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That is one way to look at stocks. Trefis High Quality Portfolio evaluates much more, and is designed to reduce stock-specific risk while giving upside exposure
Stocks Like These Can Outperform. Here Is Data
For 65 similar value stocks chosen as of mid 2024, consider the following stats for the subsequent 1 year period.
- Average peak return of 39.3% vs 14.4% for S&P, with maximum peak return of 133%
- Win rate of 60%; win rate represents % of stocks with positive return
- Average 1-year return of 14.6%, similar to S&P’s despite tariff instability
But Consider The Risk
That said, CUK isn’t immune to big drops. It fell over 53% in the Dot-Com Bubble and nearly 70% during the Global Financial Crisis. The 2018 Correction knocked it down 43%, and the Covid sell-off wiped out about 85%. Even the recent inflation shock saw a 79% dip. Solid fundamentals matter, but when markets turn, CUK still faces heavy losses.
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 CUK 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 the S&P 500 over the last 4-year period. 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.