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Norwegian Cruise Line Holdings Ltd. (NCLH) Intrinsic Value

DCF-based fair value calculation with Bear, Base, and Bull scenarios

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Norwegian Cruise Line Holdings Ltd. (NCLH)

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Intrinsic Value (DCF)

Current$22.87
→
Intrinsic$21.03
-8%
$5.84$21.03$49.87
Market implies 21% growth for 5 years
NCLH appears fairly valued — current price aligns with our DCF estimate.
At $23, the market prices in continued strong cash flow growth (21%) — likely reflecting buybacks, margin stability, and ecosystem strength.
Range: Bear $6 → Bull $50. Current price implies expectations above the base case, closer to bull expectations.
Discount ↓Growth →16%18%20%22%
8%$31$36$41$47
10%$14$17$21$25
12%$5$7$10$13
14%$0$1$3$5

Bull Case

  • Bull case ($50) offers 118% upside at 24% growth, 9% discount

Bear Case

  • Bear case ($6) implies 74% downside at 16% growth, 12% discount
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5-Year Free Cash Flow Projection

Year 1$1.01B
Year 2$1.21B
Year 3$1.45B
Year 4$1.74B
Year 5$2.09B
Terminal$30.71B

📐 Model Inputs

Growth Rate20.0%5Y CAGR (cascade: 5Y→3Y→TTM)
Discount Rate10.0%WACC estimate
Terminal Growth3.0%Perpetuity rate
Base Free Cash Flow$838.87MTTM actual
Bear g×0.8, r+2%
Base Historical CAGR
Bull g×1.2, r−1.5%
ℹ️

DCF estimates based on historical growth rates extrapolated forward. See FAQ below for full methodology.

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Frequently Asked Questions

Is NCLH stock undervalued or overvalued?
🟡 FAIRLY VALUED

NCLH trades at $22.87, within 10% of our $21.03 intrinsic value estimate. At 10.0% WACC and 20.0% FCF growth, the market is pricing in assumptions roughly aligned with the 5-year historical CAGR. The valuation range spans $4.62 (bear) to $45.19 (bull).

What is NCLH's intrinsic value?

Using a 5-year DCF model: Base FCF of $839M, projected at 20.0% 5Y CAGR (best of revenue, EPS, or FCF growth), discounted at 10.0% WACC, with 3.0% terminal growth. Terminal value calculated via Gordon Growth Model: TV = FCF₅ × (1+g) / (WACC−g). After deducting $13.73B net debt and dividing by 0.52B shares: Bear $4.62 | Base $21.03 | Bull $45.19. Current price $22.87 implies -12% to base case.

How is NCLH's fair value calculated?

DCF Methodology:

① Project FCF years 1-5 using 20.0% growth derived from 5-year historical CAGR (best of revenue, EPS, or FCF growth, with 8% floor and 25% cap).

② Calculate terminal value at year 5 using perpetuity growth model with g=3.0%.

③ Discount all cash flows to PV using WACC=10.0%.

④ Sum PV of explicit period + PV of terminal value = Enterprise Value ($24.56B).

⑤ Subtract net debt, divide by shares outstanding.

Sensitivity analysis available above—adjust WACC ±2% or growth ±3% to stress-test the valuation. Implied EV/FCF multiple: 29.3x.