Norwegian Cruise Line Holdings (NCLH 15.40%) stock tumbled 12.5% through 11:35 a.m. ET Tuesday after reporting mixed earnings this morning.
Heading into the report, analysts forecast the cruise line would earn $1.16 per share (adjusted for one-time items) on $3 billion in quarterly sales. Norwegian beat the earnings forecast with a $1.20 (also non-GAAP) profit, but its sales were only $2.9 billion.
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Norwegian Cruise Q3 earnings
Missing the forecast, Norwegian Cruise's sales did climb 5% year over year to a new quarterly record. Earnings were another story.
Here, Norwegian beat earnings, but when calculated according to generally accepted accounting principles (GAAP), earned only $0.86 -- much less than the non-GAAP number. Worse, the $0.86 profit represented a near-10% year over year decline.
Despite the decline, Norwegian boasted of delivering "another record-breaking quarter, with strong performance across all brands," and said it met or exceeded "all guidance metrics." Management went on to note it "continues to experience healthy consumer demand across its portfolio of three brands for the balance of 2025 and into 2026, with record bookings made in the third quarter."
NYSE: NCLH
Key Data Points
Is Norwegian stock a buy?
All of which sounds pretty good. So why aren't investors impressed?
The answer isn't the usual "beat on earnings, missed on guidance." In fact, Norwegian raised guidance through the end of this year, saying it expects to earn $2.10 per share (adjusted), $0.02 more than Wall Street has been predicting.
Instead, I wonder if the reason might be valuation? While apparently valued below 17 times earnings, Norwegian stock costs more than twice as much when market cap is adjusted for net debt (about 37 times earnings).
That may simply seem too much to pay for a cruise line growing sales at 5%... and shrinking earnings 10%.
