Shares of Carnival (NYSE:CCL) (NYSE:CUK) are down almost 30% in the last month as Florida Gov. Ron DeSantis banned cruise ship operators from requiring proof of vaccination against COVID-19 from guests boarding ships in Florida. And a surge in coronavirus cases in the U.S. caused by the delta variant is giving some investors pause on their enthusiasm for a quick return of sailings. Still, much of the American population is fully vaccinated against COVID-19, and data shows that vaccines are effective against the delta variant.

Carnival has plans to go to sea with a large part of its fleet by November. After being cooped up at home for the better part of a year, folks are ready to experience entertainment away from home. It might be a little early, but it's nearing time for investors to consider Carnival stock. 

A couple sitting together with a cruise ship in the background.

Image source: Getty Images.

All aboard 

Carnival has plans to resume sailings on 42 of its ships by Nov. 30. That represents over 50% of its capacity. Travelers are responding enthusiastically. Indeed, when the company offered a Caribbean cruise for sale, it sold out in six hours, demonstrating the pent-up demand for cruise travel.

Moreover, advanced bookings for sailings departing in 2022 are already above levels in 2019. Here's what CEO Arnold Donald said on the company's rebound in bookings:

Despite our minimal advertising spend, we continue to experience an acceleration in booking trends globally, including capturing significant latent demand for our new sailings this summer. This strong demand affirms confidence in our future. In addition, customer deposits grew this past quarter, a significant milestone on our path to resumption.

The open ocean.

Image source: Getty Images.

Is it too early to bet on Carnival's recovery? 

While the trend is heading in the right direction for Carnival, it will be some time before it's smooth sailing again. In fact, it may very well be 2023 before the company returns to full strength. Still, a phased recovery is underway, and the company has over $9 billion in cash and short-term investments.

Before the onset of the pandemic, Carnival demonstrated accelerating revenue growth for four years straight. From 4.3% growth in 2016 to 10.3% in 2019, the increases propelled overall revenue to $20.8 billion before cratering in 2020. What's more, the company was generating solid profit, with an operating margin of at least 15.7% in each of those four years.

On average, between 2016 and 2019, Carnival's earnings per share were $4.02. As of this writing, the stock is trading at $20.92. That's roughly five times the average earnings per share during the three years before the pandemic. If you think Carnival can return to levels of revenue and profits it saw before the pandemic's onset, then it may be a good time to start considering the stock.

Admittedly, it might be early, and you would have to be pretty optimistic about its recovery, but the risk versus reward is there for long-term investors to get in at a low price. 

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.