Royal Caribbean Cruises Ltd (RCL) stock analysis
Royal Caribbean Cruises Ltd (RCL) clears 8 of this site's 8 mechanical value filters, 3 of 8 Buffett-style checks and 3 of 5 Lynch-style checks. At $286.13 it trades 90.2% above this site's neutral DCF value (a margin of safety of -90.2%). Its earnings quality rates Strong and it returns +2.4% to shareholders net of dilution. Figures are as of October 23, 2026, from SEC filings and market data refreshed weekly; this is educational analysis, not investment advice.
Data as of October 23, 2026. Refreshed weekly from SEC filings and market data.
What does Royal Caribbean do?
Royal Caribbean Group runs cruise lines that sell ship-based vacations, including private beach destinations. It earns from ticket sales and on-board spending.
Brands and businesses it owns
- Royal Caribbean International
- Celebrity Cruises
- Silversea Cruises
What stands out about Royal Caribbean?
- The share price implies 24.5% yearly growth. At $286.13, RCL's free cash flow of $8.81 per share would have to grow 24.5% a year, fading to 2.5% by year 10, for this site's DCF (10% discount rate) to match the price. This site's baseline starts at 8%, so the price asks for more growth than the baseline. Change the assumptions.
- No filter fails. RCL passes 8 of the 8 value filters. See every filter.
- Strongest against peers: net margin. At 23.5% (peer median 11.7%) it ranks 4th of 18 among hotels, restaurants & leisure stocks this site tracks. See the ranking.
- Weakest against peers: free-cash-flow yield. At 3.1% (peer median 4.4%) it ranks 14th of 18 among hotels, restaurants & leisure stocks this site tracks. See the ranking.
- Balance sheet in the distress zone. Its Altman Z″-Score is 0.05; below 1.1 is the distress zone, 1.1 to 2.6 the grey zone. See the Altman Z″-Score list.
How has Royal Caribbean's share price moved?
The interactive price chart needs JavaScript.
Is Royal Caribbean undervalued? The value diligence check
Every value-investing signal this site computes for this stock, gathered in one place: the same real numbers from the tools below, not a new score.
- Margin of safety (DCF) -90.2%
- P/E vs. its own history 17.4x · at/below its cheapest point Real range: 17.9x–22.4x over 3 years (net income per diluted share from each fiscal year's 10-K, paired with the real closing price at that fiscal year-end).
- Wall St. analyst rating Buy · 4.03/5 34 analysts this month: 9 strong buy, 17 buy, 8 hold, 0 sell, 0 strong sell (Finnhub). Up from 3.94 last month.
- Altman Z″-Score (bankruptcy risk) 0.05 · Distress zone
- Earnings quality (is the profit real?) Strong · all 5 checks clean Beneish M-score −2.86 · accruals −5.6% of assets · 183% of profit arrived as cash · stock comp 1.0% of revenue · share count −1.6% a year. From the latest 10-K (year to Dec 2025) - see the Earnings Quality Screener for how each check is scored.
- Shareholder yield (cash back to owners) +2.4% net Latest fiscal year (2025): dividends 1.1% + buybacks 1.5% − stock comp 0.2%, as a share of today's market cap. Over 14 years its split-adjusted share count rose 25%. See Shareholder Yield Leaders.
- Capital needed to grow (See's test) $3.47 per $1 of new profit · Capital-hungry · but only 15% return on capital Operating profit $1.7B → $4.0B, capital needed $19B → $27B, 2016–2025 (3-year averages); return on capital now 15% before tax. Buffett's See's Candies needed $0.42 per $1 of new profit, FlightSafety $3.20, a typical grower about $5. See Capital-Light Compounders.
- PEG (growth at a reasonable price) 1.15 · Above fair P/E 17.4× ÷ 15.2% a year of growth behind it. 117th lowest of 447 stocks with a usable PEG. Lynch's fair value is a PEG of 1; a very high PEG usually means almost no growth, a very low one a profit spike. See PEG Ratio Ranking.
- Compounder lenses (4) 2 of 4 · misses capital-light, cash back Capital-light growth: not cleared (only 15% return on capital); Profit is real: cleared; Cash to owners: not cleared (+0.7% a year net); Fair price (PEG): cleared. See Compounders at a Fair Price, which also lets you move the PEG bar.
- Value trap check Clear
- Munger's Inversion Check 2 flags
- Standing vs. sector peers 4 of 7 measures above the median Compared with the 17 other hotels, restaurants & leisure stocks this site tracks: 2 in the top third, 1 in the bottom third.
- Dividend payout sustainability 0/6 · clean
How does Royal Caribbean compare with its peers?
4 of 7 measures sit above the median of the 17 other hotels, restaurants & leisure stocks tracked here, 2 in the top third and 1 in the bottom third.
- P/E ratiolower is cheaper · peer median 18.2× 17.4× –8th of 18
- Free-cash-flow yieldhigher is cheaper · peer median 4.4% 3.1% ✕14th of 18
- Return on equityhigher is better · peer median 55% 44% –11th of 18
- Net marginhigher is better · peer median 11.7% 23.5% ✓4th of 18
- Revenue growthhigher is better, year on year · peer median 7.7% 8.7% –8th of 18
- Debt / equitylower is safer · peer median 5.84 2.23 ✓6th of 17
- Dividend yieldamong dividend payers · peer median 1.93% 1.50% –9th of 13
Peers are the stocks this site tracks in the same sector group, not every listed competitor. The bar runs from the weakest peer (left) to the strongest (right); the tick is the middle. Measures that don't apply to a sector (cash-flow yield for banks, debt for financials) are left out.
What would Buffett & Lynch say?
Buffett's checklist is built around durable, profitable businesses bought at sensible prices, and RCL doesn't clear enough of it yet. In its favor: RCL is currently earning a strong return on shareholders' equity, converts sales into profit at healthy margins, and earns many times its interest expense, so debt service isn't a worry. Where it comes up short: RCL and its five-year average return on equity falls short too, so this isn't just a one-off dip, carries more debt relative to equity than he typically tolerates, hasn't grown earnings per share fast enough over five years to impress him, is trading above what a conservative discounted-cash-flow estimate says it's worth right now, and trades rich relative to owner earnings, the real cash the business could pay out.
- ROE (TTM) > 11% ✓
- ROE (5yr avg) > 11% ✕
- Debt/Equity < 0.5 ✕
- Pretax margin > 15% ✓
- EPS growth (5yr) > 7% ✕
- Interest coverage > 5x ✓
- Trading below intrinsic value (DCF) ✕
- Price vs. owner earnings < 25x ✕
- Bonus: returning capital via buybacks FY2025
Lynch looked for growth stories that weren't overpriced for that growth, and RCL falls short of his bar. In its favor: RCL is growing earnings 20-50% a year, his classic fast-grower zone, isn't asking too much even by a fast grower's usual richer multiple, and is generating real cash to back up a fast grower's higher price tag. Where it comes up short: RCL doesn't clear the tighter PEG bar a fast grower needs to justify its pace, and is leaning on more debt than he liked a growth story to carry.
- PEG < 1 (stricter for fast growers) ✕
- EPS growth 20%-50% ✓
- Debt/Equity < 0.5 ✕
- P/E < 40 ✓
- Price/FCF < 40 ✓
Quantitative approximations of each investor's documented approach, not endorsed by either investor or their estates - commentary, not this site's actual ranking criteria. Buffett never published a numeric checklist: only 2 of his 8 checks here trace to his own documented concepts ("owner earnings," from his 1986 shareholder letter, and "price is what you pay, value is what you get," his case against fixed P/E/P/B ceilings) - the other 6 (ROE, debt, margins, growth, interest coverage) use commonly-cited thresholds that are not numbers he himself published. The 8 hard filters below (plus the Munger check and Graham margin of safety) are this site's real, mechanical screen and are computed completely independently of the checklists above.
Berkshire Hathaway's own filing
Which of the 8 value filters does Royal Caribbean pass?
- Market Cap > $25B $76.7B
- Trailing P/E < 25 17.43
- PEG Ratio < 1.5 1.15
- Price/Book < 8 7.49
- Price/Sales < 7 4.10
- EPS Growth YoY > -5% -4.3%
- vs 50-day MA (±12%) +5.0%
- vs 200-day MA (±12%) -0.1%
What is Royal Caribbean's margin of safety?
-90% on 2026-10-07 → -90% on 2026-10-23 (5 weekly readings).
Where is Royal Caribbean in its 52-week range?
What is the short interest in Royal Caribbean?
11,338,621 shares short as of 2026-09-30 (FINRA settlement date). Reported twice a month, so this only changes roughly every two weeks, not daily.
What could go wrong with Royal Caribbean? Munger's inversion check
"Invert, always invert." Instead of reasons to buy, these are reasons to hesitate, not a verdict, and not everything worth knowing about a business.
- Margin of safety, even in the bull case -12%
- Short interest under 5% of float 4.5%
- Passes most of the 6 fundamental filters 6/6 passed
- Price run-up backed by value, not just momentum +24% off 52wk low
- Debt/equity stable since 2016 1.03 → 2.13
Doesn't cover circle of competence, management quality, or accounting concerns: those need judgment, not data.
How much have Royal Caribbean shareholders gained per year?
Not enough clean earnings history to compute this for RCL yet - a loss year in the window breaks the growth math rather than faking a number through it.
An earnings-based proxy, not a stock-price total return - it doesn't capture multiple expansion/contraction or reinvested dividends. EPS from RCL's own 10-K filings; dividend yield is the current trailing yield on today's price, from the same weekly fetch as the rest of this site.
What do Royal Caribbean's 10-year financials show?
From RCL's own 10-K filings (SEC EDGAR): up to the last 10 fiscal years. Press any year's bars for the exact figures.
Frequently asked questions about Royal Caribbean
What kind of company is Royal Caribbean?
Royal Caribbean Group runs cruise lines that sell ship-based vacations, including private beach destinations. It earns from ticket sales and on-board spending. Brands and businesses it owns include Royal Caribbean International, Celebrity Cruises and Silversea Cruises. This site groups it with Hotels, Restaurants & Leisure stocks.
Is Royal Caribbean trading above or below its DCF value?
At $286.13, RCL trades 90.2% above this site's neutral DCF value of $150.42 per share, a margin of safety of −90.2%. That DCF projects free cash flow for 10 years, with growth starting at 8% and fading to 2.5%, discounted at 10%; it is one set of assumptions, not a forecast. Test your own in the Intrinsic Value Calculator.
How many of this site's 8 value filters does Royal Caribbean pass?
RCL passes 8 of 8. It passes Market Cap > $25B ($76.7B), Trailing P/E < 25 (17.43), PEG Ratio < 1.5 (1.15), Price/Book < 8 (7.49), Price/Sales < 7 (4.10), EPS Growth YoY > -5% (-4.3%), vs 50-day MA (±12%) (+5.0%) and vs 200-day MA (±12%) (-0.1%). The 8-filter list shows every stock that passes all of them.
How risky is Royal Caribbean's balance sheet?
RCL's Altman Z″-Score is 0.05, which falls in the distress zone. Altman's own thresholds are above 2.6 for the safe zone, 1.1 to 2.6 for the grey zone and below 1.1 for the distress zone; the score blends working capital, retained earnings, operating profit and equity against liabilities. Its debt-to-equity ratio is 2.23, against a sector median of 5.84. See the Altman Z″-Score list.
Is Royal Caribbean's P/E ratio high or low compared with its own history?
RCL trades at 17.4× trailing earnings. At the end of each of its last 3 fiscal years its P/E was between 17.9× and 22.4× (average 20.6×), so today's multiple is at or below the lowest of those years. Each year's P/E pairs net income per diluted share from the 10-K with the closing price at that fiscal year-end.
When does Royal Caribbean report earnings next?
Royal Caribbean's next earnings report is expected on October 27, 2026 before the market opens, with analysts expecting earnings of $6.45 per share. Dates come from the Finnhub earnings calendar and can move. In its last 4 quarters it beat the estimate 3 times, by an average of +4.0%.
Where do these numbers come from?
- Financial statements: Royal Caribbean's 10-K annual report for the year ended Dec 31, 2025, filed Feb 11, 2026 (filing index). Every earlier year in the 10-year financials comes from the company's older 10-K filings, all listed on SEC EDGAR.
- Prices and market data: quotes, P/E and analyst ratings from Finnhub; daily price history and the 52-week range from Twelve Data, both refreshed weekly. Short interest comes from FINRA, reported twice a month.
- How to check a figure: click any number in the card above to see its exact source, and read the Editorial Standards for every rule behind the checks.
About this Royal Caribbean Cruises Ltd analysis
This page shows every value-investing check the site runs on Royal Caribbean Cruises Ltd (RCL) in one place: the 8 mechanical filters, the Buffett and Lynch checklists, a margin of safety from a disclosed DCF, earnings quality, shareholder yield and how it ranks against its sector peers. The numbers come from SEC filings and public market data, refreshed weekly, and the same rules apply to every stock on the stock list. See Editorial Standards for the sources and the rules, or run your own filters in the stock screener.