Core Insights - The cruise industry is experiencing a slowdown in its recovery, with Norwegian Cruise Lines (NCLH) shares dropping 17.7% in November, indicating challenges despite a post-pandemic resurgence in travel [1][2]. Financial Performance - In Q3, Norwegian reported a revenue increase of 4.7% to $2.94 billion, but earnings per share fell by 9.5% to $0.86, both missing analyst expectations [4]. - Adjusted (non-GAAP) earnings per share grew by 17.6% to $1.20 when excluding a non-cash loss from debt extinguishment, suggesting underlying profitability [5]. - For the current quarter, management projected adjusted EBITDA of $555 million and adjusted earnings of $0.27 per share, both below analyst forecasts [6]. Market Position - Norwegian's stock trades at a low P/E ratio of nine times this year's adjusted earnings estimates, indicating potential undervaluation [7]. - The company has a significant debt burden, with a net-debt-to-EBITDA ratio of 5.4, which poses risks for investors [8]. Industry Outlook - The cruising environment, previously characterized by strong growth, appears to be normalizing, which may affect future performance [2]. - Despite recent challenges, there is a belief that the cruising industry will remain profitable, presenting potential long-term investment opportunities following the recent sell-off [8].