Carnival (CCL -1.07%) (CUK -1.26%) has completed most of its recovery from the COVID-19 pandemic, which had decimated its business. Sales hit a second-quarter record this year, and bookings and deposits were at all-time highs. However, shares of the cruise line are still 75% lower than they were five years ago -- before the pandemic hit. That means the stock has a ways to go even as it has risen some 90% this year.

Let's see why it's still down, where you can expect it to be a year from now, and whether you should buy the stock.

There's still half a year of recovery left

Carnival stock is actually down 15% over the past month. That's likely because it achieved much of the recovery by the second quarter, and some of the continuation is already baked into the price. It may not rise more until there's further progress.

Since progress is charted quarterly, there's still a lot more to expect in the back half of this year. In 2022's third quarter, adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) was $300 million. Management is guiding for over $2 billion in the 2023 third quarter -- a huge jump. 

Carnival ended the latest quarter with $7.2 billion in deposits and record bookings -- and at higher prices than last year. This should be reflected in continued strong comparisons. Operating income was still negative last year, and the adjusted net loss was $688 million. Fourth-quarter 2022 results were pretty disappointing as well, producing an adjusted net loss of $1.1 billion and negative adjusted EBITDA.

However, management is guiding for positive cash from operations and adjusted free cash flow in the back half of this year compared to negative numbers from last year. It's also expecting about $1 billion in adjusted net income in the third quarter.

Since Carnival's upcoming third and fourth quarters are likely to be much better than last year, expect the stock to reflect any improvement. There are never guarantees, but there's a strong likelihood that that stock will jump on good results.

Sales will start to moderate

In the first half of 2024, the changes will start to narrow. Sales growth should begin to moderate since it's already at record highs. Even if revenue increases, it isn't likely to be an astonishing number. Carnival is still posting net losses and adjusted net losses, and those could turn positive in the third quarter and into 2024.

The cruise line should also continue to generate positive cash from operations and use that cash to pay down the enormous debt it took on to stay afloat during the pandemic when it wasn't operating cruises. It's making progress there but still has years of debt to pay off -- to the tune of $32 billion. As long as that keeps decreasing, investors should give it a thumbs up.

Management has also been buying back shares at a fast pace, demonstrating its commitment to delivering value for shareholders.

In a year, it should keep getting better

Since the stock has taken a dip after soaring this year, there's a good chance that buying it now could result in gains if the third-quarter report shows the expected progress.

The road to long-term gains could be choppy over the next year as the stock could rise at times in response to strong updates -- and fall at other times as a result of moderating progress.

However, over the longer term Carnival should be a winner as operations return to normal. The company has strong management, a popular product, and a commitment to shareholders. There's some risk, but Carnival was a market-beating stock prior to the pandemic and could be again.