Is Carnival Corporation Stock a Buy?

Core Insights - Carnival Corporation is experiencing a significant rebound in business, with stock prices increasing over 200% since mid-2020, driven by record revenues and net income in the third quarter [3][4] - Despite the positive performance, the company faces challenges related to its high levels of long-term debt, which currently stands at $25 billion, generating substantial interest expenses [6][8] Business Performance - Carnival's revenue for the third quarter reached a record $8.15 billion, reflecting a year-over-year growth of 3.3%, while net income increased by 6.7% to a record $1.85 billion [3] - The company has achieved 10 consecutive quarters of record revenue, with consumer deposits remaining high at $7.1 billion for the third quarter [4] Market Context - The cruise industry is showing strong demand, contrasting with challenges faced by other sectors of the U.S. tourism industry, such as Las Vegas, which is experiencing a decline in visitors [5] - Macroeconomic factors, including lower interest rates, may support consumer spending in the cruise sector [4] Debt Situation - Carnival has accumulated significant long-term debt due to the pandemic, which has led to equity dilution and cash outflows that could impact investor returns for years [6][7] - The company reported an interest expense of $317 million in the third quarter, highlighting the financial burden of its debt [8]