Compared to pre-pandemic prices, Norwegian Cruise Line stock still has a lot of catching up to do.
Oh, what a difference a few months can make. Five years ago, Norwegian Cruise Line (NCLH 2.31%) stock sailed along and the travel market seemed entirely secure.
Then, the COVID-19 pandemic struck and cruise activity came to a standstill. Now, in mid-2024, investors can see Norwegian Cruise Line’s recent progress — yet, for various reasons, the share price is nowhere near a full recovery.
What happened to $1,000 invested in Norwegian Cruise Line stock?
So, let’s say you were unfortunate enough to invest $1,000 in Norwegian Cruise Line stock five years ago, when it traded at around $49. If the share price is roughly $19 now, this represents a 61% decline.
Thus, your $1,000 investment would currently be worth around $390. Clearly, it’s been rough sailing amid the choppy waters of the post-pandemic cruise-line market.
This isn’t to suggest that Norwegian Cruise Line is hopeless. That’s far from the case as the company posted encouraging first-quarter 2024 financial results. Specifically, Norwegian Cruise Line’s revenue grew 20% year over year to $2.2 billion, and the company flipped from an adjusted net loss of $127.7 million in the year-earlier quarter to adjusted net income of $69.5 million in Q1 of 2024.
The market’s still not convinced
The lockdowns are old news and Norwegian Cruise Line’s ships are sailing. So, in light of Norwegian Cruise Line’s poor post-recovery performance, why hasn’t the market bid the share price back up yet?
The most obvious culprit is consumer price inflation, the pinch of which is still felt by middle-class America, even if the headline numbers seem to be gradually improving. Moreover, as Bank of America analysts observed, cruise-line operators like Norwegian Cruise Line don’t have the pricing power they once had.
Additionally, many investors have rotated into mega-cap technology stocks, so Norwegian Cruise Line stock may have been left behind in the rush to the “Magnificent Seven.” Rotation can work both ways, however, and the next five years could reward patient Norwegian Cruise Line stockholders.
Bank of America is an advertising partner of The Ascent, a Motley Fool company. David Moadel has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Bank of America. The Motley Fool has a disclosure policy.