Norwegian Cruise Line Holdings Ltd. (NCLH): A Bull Case Theory 

We came across a bullish thesis on Norwegian Cruise Line Holdings Ltd. on Guardian Research’s Substack. In this article, we will summarize the bulls’ thesis on NCLH. Norwegian Cruise Line Holdings Ltd.’s share was trading at $21.54 as of December 16th. NCLH’s trailing and forward P/E were 15.50 and 8.51 respectively according to Yahoo Finance.

Norwegian Cruise Line Holdings Ltd., together with its subsidiaries, operates as a cruise company in North America, Europe, the Asia-Pacific, and internationally. NCLH is trading around $20 per share, roughly 30% below its 52-week high, despite delivering record revenue, record EBITDA, and aggressively buying back stock. The market continues to anchor on a “pandemic debt” narrative, but the fundamentals now reflect a company generating roughly $2.7 billion in annual EBITDA with a clear path to mid-4x leverage by the end of 2026.

Q3 2025 results underscored this inflection, with adjusted EBITDA of $1.02 billion, EPS of $1.20 beating guidance, occupancy above 106%, and flat unit costs despite persistent inflation—an exceptional outcome for a capital-intensive business. Confidence is further reinforced by a notable cluster of insider buying immediately after earnings, including sizable purchases by the CEO, CFO, and a board director, signaling strong internal conviction that the stock is undervalued.

Structurally, the cruise industry is benefiting from powerful tailwinds as consumers increasingly prioritize experiences over goods, with cruising gaining share versus land-based vacations due to its superior value proposition amid elevated hotel and airfare costs. Demand remains robust, supply growth is disciplined, and the Caribbean—where NCLH is increasing deployment—continues to dominate passenger preferences. Within an oligopolistic industry, NCLH occupies a “Goldilocks” position, pairing scale efficiencies with operational agility, while its multi-brand portfolio spanning premium to ultra-luxury creates a powerful customer lifetime value ladder.

The company’s young, fuel-efficient fleet, disciplined cost program targeting $300 million in savings, expanding margins, and deleveraging trajectory all point to accelerating equity value creation. At roughly 8x forward earnings versus historical and peer multiples well into the double digits, the disconnect is stark. As leverage falls and execution continues, a meaningful rerating toward a $36 base case—and potentially far beyond—offers an unusually asymmetric risk-reward profile.

Previously, we covered a bullish thesis on Norwegian Cruise Line Holdings Ltd. (NCLH) by William Fleming-Daniels in April 2025, which highlighted post-COVID recovery, valuation upside, leverage risks, and scenario-based outcomes. The company’s stock price has appreciated by approximately 31% since our coverage. This is because operational recovery materialized. The thesis still stands as demand resilience supports deleveraging. Guardian Research shares a similar but emphasizes on insider buying and rerating potential.

Norwegian Cruise Line Holdings Ltd. is not on our list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 58 hedge fund portfolios held NCLH at the end of the third quarter which was 45 in the previous quarter. While we acknowledge the risk and potential of NCLH as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than NCLH and that has 10,000% upside potential, check out our report about this cheapest AI stock.

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Disclosure: None.