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The Zacks Consensus Estimate for RCL’s first-quarter earnings per share (EPS) is pegged at $2.52, suggesting 42.4% growth from the $1.77 reported in the prior-year quarter. The consensus mark has increased 1.2% in the past 60 days. (Find the latest EPS estimates and surprises on Zacks Earnings Calendar.)
RCL's Earnings Estimate Trend
Image Source: Zacks Investment Research
The consensus mark for third-quarter revenues is pegged at $4 billion, indicating growth of 7.4% from the year-ago quarter’s reported figure.
Royal Caribbean has an impressive earnings surprise history. RCL’s earnings outpaced the Zacks Consensus Estimate in all the trailing four quarters, the average surprise being 15.7%.
RCL's Earnings Surprise History
Image Source: Zacks Investment Research
Q1 Earnings Whispers for RCL Stock
Our proven model predicts a likely earnings beat for Royal Caribbean this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat, which is the case here. You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.
Royal Caribbean’s first-quarter top line is likely to have increased year over year, buoyed by continued strength in cruising demand, robust booking trends, premium pricing and strong onboard spending. Elevated consumer interest in travel experiences — especially to the Caribbean — combined with the ramp-up of new ships such as Icon of the Seas, Utopia of the Seas, and Silver Ray, is expected to have driven top-line growth in the to-be-reported quarter.
The company anticipates net yields to rise 3.9-4.4% (on a reported basis) from 2024 levels, driven by strong pricing on both new and existing ships. Our model predicts first-quarter net yields at $256.8 million (on a reported basis).
Strong Caribbean demand — accounting for more than 70% of first-quarter capacity — combined with private destination visits and exclusive experiences, is likely to have provided a tailwind for onboard revenue growth. This and the focus on digital tools and AI-powered features that enhance the booking and onboard journey are likely to have contributed to revenue acceleration in the first quarter.
Higher spend per passenger on ticket and onboard categories, as well as increased pre-cruise purchases, are likely to have supported the company’s first-quarter revenue expansion. Our model predicts third-quarter passenger ticket revenues to rise 7.8% year over year to $2.74 billion. We expect onboard and other revenues to increase 2.9% year over year to $1.2 billion.
Margins
Royal Caribbean’s bottom-line performance for the first quarter is expected to have shown solid year-over-year improvement, fueled by strategic pricing, strong load factors, and disciplined cost management.
However, the quarter is likely to have faced cost pressures, particularly from increased dry dock activity, which is expected to have added 130 basis points to cruise operating costs in the first quarter. Our model predicts total cruise operating costs to increase 4.1% year over year to $2.14 billion.
The company expects first-quarter net cruise costs (excluding fuel per APCD) to increase 1.3-1.8% (on a reported basis) year over year. Per our model, first-quarter net cruise costs (excluding fuel per APCD) are estimated at $131.71 million (on a reported basis).
Nevertheless, efficiencies from the scale of operations, reduced time to book via digital enhancements, and higher onboard adoption of services (such as the in-app chat tool) are expected to have cushioned some of the cost pressures in the first quarter. Our model predicts first quarter operating margins to expand 260 basis points year over year to 22.7%. The company expects adjusted EPS in the first quarter to range between $2.43 and $2.53.
RCL Stock's Price Performance & Valuation
Royal Caribbean shares have lost 10.7% in the past three months, outperforming the Zacks Leisure and Recreation Services industry’s decline of 17.2%. The cruise stock has underperformed the S&P 500’s decline of 9.1%. The company’s peers, Carnival Corporation & plc (CCL - Free Report) , Norwegian Cruise Line Holdings Ltd. (NCLH - Free Report) and OneSpaWorld Holdings Limited (OSW - Free Report) have lost 27.2%, 35% and 18.5%, respectively, in the same period.
RCL's 3-Month Price Performance
Image Source: Zacks Investment Research
From a valuation perspective, Royal Caribbean stock is currently trading at a discount. RCL is currently trading at a forward 12-month price-to-earnings (P/E) multiple of 13.57X, below the industry average of 16.16X, reflecting an attractive investment opportunity. Other industry players, such as Carnival, Norwegian Cruise and OneSpaWorld, have P/E ratios of 9.59X, 7.82X and 17X, respectively.
Image Source: Zacks Investment Research
Investment Considerations for RCL Stock
Royal Caribbean is focused on capitalizing on robust consumer demand and evolving travel preferences to drive long-term growth while maintaining a strong balance sheet. The company continues to invest in fleet innovation, destination development, and digital capabilities to enhance guest experiences and improve operational efficiency. RCL’s differentiated offerings — such as exclusive private destinations and next-generation ships like Icon of the Seas — support premium pricing and strong guest satisfaction. The launch of Celebrity River Cruises further expands its vacation ecosystem and diversifies its revenue streams. With a resilient direct-to-consumer channel and accelerating demand across key markets, RCL is well-positioned to increase earnings and generate higher cash flows in 2025 and beyond.
However, the company faces challenges from elevated capital expenditures tied to new ship deliveries and private destination investments. While cost discipline remains a core focus, inflationary pressures, particularly from fuel and dry dock activity, may affect margins in the near term. Additionally, any slowdown in consumer discretionary spending or macroeconomic headwinds could impact future booking trends and onboard revenue.
How to Play Royal Caribbean Stock Now?
As Royal Caribbean Cruises prepares to release its first-quarter 2025 results, investors may be contemplating whether now is the right time to position themselves in the stock. The company’s strong cruising demand, innovative fleet additions, elevated onboard spending, and strategic pricing are expected to support both revenue and earnings growth. Additionally, RCL’s consistent earnings beat history and attractive valuation enhances its appeal.
However, near-term challenges tied to dry dock costs, inflationary pressures, and macroeconomic uncertainties could pose risks to margin expansion and consumer spending trends. While the company’s long-term fundamentals remain solid, the recent stock decline and limited estimate revisions may call for a measured stance.
Given this backdrop, investors may be better off adopting a wait-and-watch approach ahead of the earnings release. For prospective investors, it may be prudent to wait for the earnings report and assess management’s forward guidance, particularly around cost inflation and consumer spending, before initiating a position.
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How Should You Play Royal Caribbean Stock Pre-Q1 Earnings Release?
Royal Caribbean Cruises Ltd. (RCL - Free Report) is scheduled to release first-quarter 2025 results on April 29, 2025.
The Zacks Consensus Estimate for RCL’s first-quarter earnings per share (EPS) is pegged at $2.52, suggesting 42.4% growth from the $1.77 reported in the prior-year quarter. The consensus mark has increased 1.2% in the past 60 days. (Find the latest EPS estimates and surprises on Zacks Earnings Calendar.)
RCL's Earnings Estimate Trend
Image Source: Zacks Investment Research
The consensus mark for third-quarter revenues is pegged at $4 billion, indicating growth of 7.4% from the year-ago quarter’s reported figure.
Royal Caribbean has an impressive earnings surprise history. RCL’s earnings outpaced the Zacks Consensus Estimate in all the trailing four quarters, the average surprise being 15.7%.
RCL's Earnings Surprise History
Image Source: Zacks Investment Research
Q1 Earnings Whispers for RCL Stock
Our proven model predicts a likely earnings beat for Royal Caribbean this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat, which is the case here. You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.
Royal Caribbean has an Earnings ESP of +0.70% and a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.
Factors Shaping RCL’s Upcoming Results
Revenues
Royal Caribbean’s first-quarter top line is likely to have increased year over year, buoyed by continued strength in cruising demand, robust booking trends, premium pricing and strong onboard spending. Elevated consumer interest in travel experiences — especially to the Caribbean — combined with the ramp-up of new ships such as Icon of the Seas, Utopia of the Seas, and Silver Ray, is expected to have driven top-line growth in the to-be-reported quarter.
The company anticipates net yields to rise 3.9-4.4% (on a reported basis) from 2024 levels, driven by strong pricing on both new and existing ships. Our model predicts first-quarter net yields at $256.8 million (on a reported basis).
Strong Caribbean demand — accounting for more than 70% of first-quarter capacity — combined with private destination visits and exclusive experiences, is likely to have provided a tailwind for onboard revenue growth. This and the focus on digital tools and AI-powered features that enhance the booking and onboard journey are likely to have contributed to revenue acceleration in the first quarter.
Higher spend per passenger on ticket and onboard categories, as well as increased pre-cruise purchases, are likely to have supported the company’s first-quarter revenue expansion. Our model predicts third-quarter passenger ticket revenues to rise 7.8% year over year to $2.74 billion. We expect onboard and other revenues to increase 2.9% year over year to $1.2 billion.
Margins
Royal Caribbean’s bottom-line performance for the first quarter is expected to have shown solid year-over-year improvement, fueled by strategic pricing, strong load factors, and disciplined cost management.
However, the quarter is likely to have faced cost pressures, particularly from increased dry dock activity, which is expected to have added 130 basis points to cruise operating costs in the first quarter. Our model predicts total cruise operating costs to increase 4.1% year over year to $2.14 billion.
The company expects first-quarter net cruise costs (excluding fuel per APCD) to increase 1.3-1.8% (on a reported basis) year over year. Per our model, first-quarter net cruise costs (excluding fuel per APCD) are estimated at $131.71 million (on a reported basis).
Nevertheless, efficiencies from the scale of operations, reduced time to book via digital enhancements, and higher onboard adoption of services (such as the in-app chat tool) are expected to have cushioned some of the cost pressures in the first quarter. Our model predicts first quarter operating margins to expand 260 basis points year over year to 22.7%. The company expects adjusted EPS in the first quarter to range between $2.43 and $2.53.
RCL Stock's Price Performance & Valuation
Royal Caribbean shares have lost 10.7% in the past three months, outperforming the Zacks Leisure and Recreation Services industry’s decline of 17.2%. The cruise stock has underperformed the S&P 500’s decline of 9.1%. The company’s peers, Carnival Corporation & plc (CCL - Free Report) , Norwegian Cruise Line Holdings Ltd. (NCLH - Free Report) and OneSpaWorld Holdings Limited (OSW - Free Report) have lost 27.2%, 35% and 18.5%, respectively, in the same period.
RCL's 3-Month Price Performance
Image Source: Zacks Investment Research
From a valuation perspective, Royal Caribbean stock is currently trading at a discount. RCL is currently trading at a forward 12-month price-to-earnings (P/E) multiple of 13.57X, below the industry average of 16.16X, reflecting an attractive investment opportunity. Other industry players, such as Carnival, Norwegian Cruise and OneSpaWorld, have P/E ratios of 9.59X, 7.82X and 17X, respectively.
Image Source: Zacks Investment Research
Investment Considerations for RCL Stock
Royal Caribbean is focused on capitalizing on robust consumer demand and evolving travel preferences to drive long-term growth while maintaining a strong balance sheet. The company continues to invest in fleet innovation, destination development, and digital capabilities to enhance guest experiences and improve operational efficiency. RCL’s differentiated offerings — such as exclusive private destinations and next-generation ships like Icon of the Seas — support premium pricing and strong guest satisfaction. The launch of Celebrity River Cruises further expands its vacation ecosystem and diversifies its revenue streams. With a resilient direct-to-consumer channel and accelerating demand across key markets, RCL is well-positioned to increase earnings and generate higher cash flows in 2025 and beyond.
However, the company faces challenges from elevated capital expenditures tied to new ship deliveries and private destination investments. While cost discipline remains a core focus, inflationary pressures, particularly from fuel and dry dock activity, may affect margins in the near term. Additionally, any slowdown in consumer discretionary spending or macroeconomic headwinds could impact future booking trends and onboard revenue.
How to Play Royal Caribbean Stock Now?
As Royal Caribbean Cruises prepares to release its first-quarter 2025 results, investors may be contemplating whether now is the right time to position themselves in the stock. The company’s strong cruising demand, innovative fleet additions, elevated onboard spending, and strategic pricing are expected to support both revenue and earnings growth. Additionally, RCL’s consistent earnings beat history and attractive valuation enhances its appeal.
However, near-term challenges tied to dry dock costs, inflationary pressures, and macroeconomic uncertainties could pose risks to margin expansion and consumer spending trends. While the company’s long-term fundamentals remain solid, the recent stock decline and limited estimate revisions may call for a measured stance.
Given this backdrop, investors may be better off adopting a wait-and-watch approach ahead of the earnings release. For prospective investors, it may be prudent to wait for the earnings report and assess management’s forward guidance, particularly around cost inflation and consumer spending, before initiating a position.