Norwegian Cruise Line(US:NCLH) The Motley Fool·2025-12-23 21:31Core Insights - Brigade Capital Management has initiated a new position in Norwegian Cruise Line Holdings Ltd. (NCLH), acquiring 347,600 shares valued at approximately $8.56 million, representing a 1.05% allocation of the fund's $815.2 million in reportable U.S. equity assets [1][2]. Company Overview - Norwegian Cruise Line Holdings Ltd. is a leading global cruise operator, utilizing a multi-brand strategy to cater to diverse customer segments and travel preferences, emphasizing destination variety and premium onboard experiences [6][9]. - The company operates under the Norwegian Cruise Line, Oceania Cruises, and Regent Seven Seas Cruises brands, offering a range of itineraries from short voyages to 180-day global journeys [9]. Financial Performance - For the third quarter, Norwegian Cruise Line reported $2.9 billion in revenue, a 5% increase, and $1.02 billion in adjusted EBITDA, up 9%, both exceeding guidance [7]. - The company raised its full-year adjusted EPS expectations to $2.10, indicating strong earnings potential despite recent stock underperformance [7]. Stock Performance - As of the latest report, NCLH shares were priced at $23.11, reflecting a 12% decline over the past year, significantly underperforming the S&P 500, which increased by approximately 15% during the same period [3][4]. Balance Sheet and Leverage - The company's net leverage ended the quarter at 5.4 times adjusted EBITDA, which is elevated but improving due to refinancing efforts that eliminated secured debt and reduced the fully diluted share count by roughly 7.5% [10]. - The cruise operator is experiencing improving margins, strong forward bookings, and real cash flow momentum, aligning with the investment profile of funds focused on higher-risk, turnaround-style equities [10][11]. Market Position and Demand - Norwegian's multi-brand strategy is showing leverage with occupancy rates above 106% and sustained demand in the luxury segment through Oceania and Regent [11].