It's been a buoyant time for Royal Caribbean Cruises (RCL 1.08%). Following a better-than-expected first quarter, the Miami-based cruise line anticipates that the current momentum will carry through to the remainder of 2023. During the Q1 earnings call last month, CEO Jason Liberty cited "numerous tailwinds related to the consumer's desire to travel."

Yet, despite enduring demand for cruise travel, certain headwinds still loom large for Royal Caribbean. Let's take a closer look at recent performance and company outlook to determine if this cruise line stock is a buy right now.

Better-than-anticipated Q1 results

According to Liberty, a cornerstone of Royal Caribbean's success is its ability to appeal to "a broad range of vacationers" looking for anything from a short getaway to a luxury world cruise. He believes this attribute helped the company "outperform broader leisure travel" in the first quarter.

Revenue reached $2.9 billion for the quarter, exceeding company guidance thanks to robust close-in demand, higher load factors amid increased prices, and consistent onboard revenue generation. Load factor, or the percentage of available berths that are filled with money-spending passengers, finished the quarter at 102%. (More than 100% occupancy can happen if, say, a third or fourth guest stays in a double-occupancy cabin.)

Adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) hit $642 million, also "significantly" above Royal Caribbean's expectations as described by Chief Financial Officer Naftali Holtz. 

Holtz also touted the company's Q1 adjusted loss of $59 million as being better than expected. Indeed, compared to 2022's Q1 adjusted net loss of $1.2 billion, profitability appears to be on the horizon for Royal Caribbean. 

The price of doing business also rises

While the company is making definitive strides, operating costs continue to rise. Excluding fuel, net cruise costs are anticipated to increase by 5.5% to 6.5% this year compared to 2019.

The higher operating cost not only reflects a fragile supply chain and inflation, but also new structural costs for Royal Caribbean. For example, expenses related to a full year of operations for Perfect Day at CocoCay -- Royal Caribbean's own private island destination, complete with a water park and dining options -- contributed to the price of doing business. A full year of operating its new terminal in Galveston, Texas also broadened Royal Caribbean's structural expenses.

Fortunately for Royal Caribbean, operational and cost-structure enhancements implemented during the COVID shutdown have helped combat the effects of inflation. Categories such as food and beverage, airfare, and shoreside revenue generation all received pricing improvements that have "effectively absorbed a tremendous amount of inflation," according to Liberty.

Bookings outpace 2019 levels

In a new record last quarter, Royal Caribbean provided 1.9 million vacations to its guests -- hitting the 102% load factor mentioned above. What's more, the company achieved this with higher prices than in pre-pandemic 2019.

Bookings continue to surpass 2019 levels as well. 2023's wave season, a promotional period when guests are able to book cruises at discounted rates, "extended further into the year than ever before," according to Holtz.

Perfect Day at CocoCay has significantly boosted Royal Caribbean's bookings in the Caribbean region, with over half of sailings to the region including a visit to the private island. It currently stands as the company's highest-rated destination in the region. Bookings for Royal Caribbean's European cruises also outpace 2019 levels.

Holtz explained, "Since Perfect Day opened midway through the second quarter of 2019, these itineraries are driving outsized yield and pricing growth." As a result, Royal Caribbean anticipates net yield growth of 6.75% to 7.75% for the full year.

Is Royal Caribbean stock a buy?

Compared to 2019, net yields are expected to rise more than 10% in Q2. On the other hand, second-quarter operating costs (excluding fuel) are also anticipated to increase by 8.9%.

For the full year, Liberty claims that the company will "deliver amazing vacation experiences to over 8 million guests at record yields." He projects load factor to return to historical levels in Q2 as Royal Caribbean continues to "benefit from a strong pricing environment." In addition to pricing, an enhanced fleet and onboard revenue growth initiatives will also drive the yield growth, he explained. 

Considering Royal Caribbean stock currently trades roughly 40% below its January 2020 high, I think company improvements will eventually translate into recovery for the stock. After all, management expects to hit a record adjusted EBITDA this year, and the full-year earnings-per-share guidance range was just raised from $3.00 to $3.60 to $4.40 to $4.80. For these reasons, I consider Royal Caribbean stock a buy in today's market.