Some of the past week's biggest winners were cruise line stocks. Shares of Carnival (NYSE:CCL) (NYSE:CUK)Norwegian Cruise Line Holdings (NYSE:NCLH), and Royal Caribbean (NYSE:RCL) moved sharply higher.

The cruise line companies saw their stocks soar even though an analyst put out bearish updates for all three players. There's also nothing to suggest that Carnival, Norwegian Cruise Line, and Royal Caribbean will be setting sail anytime soon. Carnival's Princess line announced an extension to its suspended sailings. However, that didn't stop all three stocks from appreciating by more than a third last week. 

A tsunami wave consisting of dollar bills and coins.

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When the ships are down

Last week was pretty spectacular for investors in the three publicly traded cruise line operators. The three stocks rose between 34% and 43% over the past five trading days.

  • Carnival: up 37%.
  • Royal Caribbean: up 34%.
  • Norwegian Cruise Line: up 43%.

Better-than-expected unemployment news may have sent travel stocks higher, but there is no indication that the cruise lines will be sailing again by the early August resumption dates they're currently booking. Many ships still have crew members who need to be repatriated -- 60,000, at last count -- and if you think Carnival, Royal Caribbean, and Norwegian Cruise Line will have an easy time staffing their ships later this year, you probably aren't paying attention. 

With thousands of confirmed COVID-19 cases earlier this year on cruise ships and at least 82 related fatalities, cruise lines will be put to the test. Crew and passengers alike will need to be convinced that hitting the high seas for a few days with thousands of other people is a good idea in the near future. 

A Financial Times headline over the weekend asked, "Coronavirus: is this the end of the line for cruise ships?" That's not the first time mainstream media has questioned the long-term viability of the industry. And it won't be the last.

For now, the industry is doing a reasonable job of getting more than half of its passengers on cancelled sailings to opt for future cruise credit instead of an outright refund, but that can change in the coming months. If the first wave of summer itineraries gets pushed out again and folks don't take kindly to the experience-snipping restrictions that cruise lines will have to put into action to be cleared for sailing, it could eat into the near-term enthusiasm. 

Morgan Stanley analyst Jamie Rollo downgraded Norwegian Cruise Line and reinstated coverage of Carnival and Royal Caribbean last week. Rollo now has underweight ratings on all three stocks now. But it didn't stop any of the three stocks from rallying later in the week. With the economy opening up across the country, it doesn't seem to register that the now-rising pace of new COVID-19 cases may derail the cruise industry's restart. 

Investors who approached the three slammed investments as value stocks in mid-March have done well. The real test comes now that they're market darlings selling experiences that they don't know if they'll be able to deliver in two months. The initial sell-off was overdone, but the recovery seems to be outpacing the fundamentals at this point. 

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.