NORWEGIAN CRUISE LINE HOLDINGS LTD. (NCLH) valuation
Share price $18.51 · Close 2026-04-24
Expectations investing: what does the price imply?
Rappaport-style reverse-DCF. We start from the current market price ($18.51 × 455.3M shares = $8.43B market cap, $22.88B enterprise value) and solve for the operating path that would justify it.
To reconcile today's price with a plausible scenario, the model lands on:
- Year-1 revenue growth: 13.6%Source is analyst consensus of 7.6%; the scenario bumped Y1 by +6.0pp to reconcile.
- Target EBIT margin (Y10): 18.7%Scenario lands above the 3-yr max of 15.9% (starting 15.9%, ending 18.7%).
- High-growth plateau: 3 yearsTier default for Y2 at 6.8%.
at or below the reference above the reference outside the historical band
Share of the total PV the model has assigned to each window. The further out a cash flow sits, the harder it is to estimate — so readers can weigh how much of the scenario rests on the near, plateau, and post-horizon periods.
Facts · FY2025 (2025-12-31)
Constants
- Horizon
- 10 years
- WACC
- 9.0%
- Terminal growth
- 2.5%
- Terminal ROIC
- 11.0%
Yearly projection
| Year | Revenue | Growth | EBIT | Margin | NOPAT | ROIC | Reinvestment | FCF | Discount | PV of FCF |
|---|---|---|---|---|---|---|---|---|---|---|
| 1 | $11.17B | 13.6% | $1.81B | 16.2% | $1.78B | 9.4% | $2.56B | -$779.2M | 0.917 | -$714.8M |
| 2 | $12.60B | 12.8% | $2.07B | 16.4% | $2.05B | 9.6% | $2.74B | -$694.0M | 0.842 | -$584.1M |
| 3 | $14.21B | 12.8% | $2.38B | 16.7% | $2.35B | 9.8% | $3.08B | -$733.7M | 0.772 | -$566.5M |
| 4 | $15.81B | 11.3% | $2.69B | 17.0% | $2.66B | 9.9% | $3.11B | -$455.4M | 0.708 | -$322.6M |
| 5 | $17.37B | 9.8% | $3.00B | 17.3% | $2.97B | 10.1% | $3.06B | -$95.2M | 0.650 | -$61.9M |
| 6 | $18.82B | 8.4% | $3.31B | 17.6% | $3.27B | 10.3% | $2.92B | $345.1M | 0.596 | $205.7M |
| 7 | $20.12B | 6.9% | $3.59B | 17.9% | $3.55B | 10.5% | $2.69B | $858.4M | 0.547 | $469.6M |
| 8 | $21.22B | 5.4% | $3.85B | 18.1% | $3.80B | 10.6% | $2.37B | $1.43B | 0.502 | $719.1M |
| 9 | $22.06B | 4.0% | $4.07B | 18.4% | $4.01B | 10.8% | $1.96B | $2.05B | 0.460 | $944.2M |
| 10 | $22.61B | 2.5% | $4.23B | 18.7% | $4.18B | 11.0% | $1.49B | $2.69B | 0.422 | $1.14B |
| Sum of PV of FCF (years 1-10) | $1.23B | |||||||||
Terminal value
- NOPATN+1
- $4.28B
- ReinvestmentN+1
- $949.2M
- FCFN+1
- $3.33B
- Terminal value (undiscounted)
- $51.26B
- PV of terminal value
- $21.65B
Equity bridge
| PV of operating FCF | $1.23B |
| + PV of terminal value | $21.65B |
| = Enterprise value | $22.88B |
| − Total debt | $14.66B |
| + Cash & equivalents | $209.9M |
| = Equity value | $8.43B |
| ÷ Diluted shares | 455.3M |
| = DCF PV / share | $18.51 |
| Market price | $18.51 |
| Reconciliation delta | −0.0% (≈ 0 by construction) |
Full calculation trail Click to expand — every number on this page derived step by step.
1 · Enterprise-value target (what the DCF must match)
Market cap = price × diluted shares
= $18.51 × 455.3M
= $8.43B
EV target = market cap + total debt − cash & equivalents
= $8.43B + $14.66B − $209.9M
= $22.88B
2 · Starting NOPAT (base year 0)
GAAP EBIT = $1.56B (15.9% of revenue)
× (1 − tax rate) = × (1 − 1.3%) = × 0.9872
= NOPAT₀ = $1.54B
3 · Invested capital & starting ROIC
Invested capital = total debt + book equity − cash
= $14.66B + $2.21B − $209.9M
= $16.66B
Raw ROIC₀ = NOPAT₀ / Invested capital
= $1.54B / $16.66B
= 9.2%
(no cap applied; raw value is within the 40.0% ceiling)
4 · Growth path construction
Source = analyst consensus: Y1 = 7.6%, Y2 = 6.8%
Clamp = [2.5%, 60%] (no sub-terminal or 60%+ starts)
Plateau rate = 6.8% (Y2 — held from year 2 through end of plateau)
Tier = 3 years (rule: plateau rate < 15% → 3y, < 25% → 5y, else 7y)
Plateau = 3 years
Fade = linear from effective Y2 to terminal 2.5% across the remaining 7 years
Effective Y1 growth after solver bumps = 13.6%
Effective Y2 growth after solver bumps = 12.8%
Growth by year:
Y1 = 13.6%
Y2 = 12.8%
Y3 = 12.8%
Y4 = 11.3%
Y5 = 9.8%
Y6 = 8.4%
Y7 = 6.9%
Y8 = 5.4%
Y9 = 4.0%
Y10 = 2.5%
5 · Margin path construction
Starting margin (Y0) = 15.9% (source: latest FY EBIT margin (GAAP))
Target margin (Y10) = 18.7% (solver output, normal band)
Year-t margin = starting + (target − starting) × (t / 10)
Margin by year:
Y1 = 16.2%
Y2 = 16.4%
Y3 = 16.7%
Y4 = 17.0%
Y5 = 17.3%
Y6 = 17.6%
Y7 = 17.9%
Y8 = 18.1%
Y9 = 18.4%
Y10 = 18.7%
6 · ROIC path construction
The capex heuristic compares latest-period CapEx ($3.26B) against the Normalized CapEx (3-yr mean) of $2.41B — mean of the last three annual CapEx values. When the latest is above 1.4× that mean and CapEx is at least 5% of revenue, we treat the filer as capital-intensive and mid-investment, hold ROIC flat for a 5-year harvest phase, and only then fade to terminal ROIC. The 3-yr mean does not feed the DCF directly — it only gates this flag.
Capex-heuristic inactive (latest CapEx 1.35× the 3-yr mean of $2.41B — below the 1.4× / 5%-of-revenue gates).
Fade from Y1: ROIC_t = ROIC₀ + (ROIC_terminal − ROIC₀) × (t / 10)
ROIC₀ = 9.2%; ROIC_terminal = 11.0%
ROIC by year:
Y1 = 9.4%
Y2 = 9.6%
Y3 = 9.8%
Y4 = 9.9%
Y5 = 10.1%
Y6 = 10.3%
Y7 = 10.5%
Y8 = 10.6%
Y9 = 10.8%
Y10 = 11.0%
7 · Solver iterations
Each row is one bisection attempt. The solver sweeps Y1 growth bumps 0pp → +20pp across the plateau ladder inside the normal margin bracket, then — if nothing reconciles — repeats the same sweep in a widened margin band ([-10%, 80%]). The first feasible attempt is the one the page uses. If no combination reconciles, the page shows the attempt whose PV sits closest to the target EV so both levers are balanced.
| # | Phase | Plateau | Y1 bump | Solved margin | PV(EV) | vs target | Feasible? |
|---|---|---|---|---|---|---|---|
| 1 | normal | 3y | +0pp | 19.1% | $20.74B | −9.4% | no |
| 2 | normal | 3y | +2pp | 19.1% | $21.43B | −6.3% | no |
| 3 | normal | 3y | +4pp | 19.1% | $22.19B | −3.0% | no |
| 4 | normal | 3y | +6pp | 18.7% | $22.88B | −0.0% | yes ✓ |
8 · Terminal value derivation
NOPAT_{N+1} = NOPAT_{10} × (1 + g_terminal)
= $4.18B × (1 + 2.5%)
= $4.28B
ΔNOPAT = NOPAT_{N+1} − NOPAT_{10}
= $104.4M
Reinvestment_{N+1} = ΔNOPAT / ROIC_terminal
= $104.4M / 11.0%
= $949.2M
FCF_{N+1} = NOPAT_{N+1} − Reinvestment_{N+1}
= $4.28B − $949.2M
= $3.33B
Terminal value (TV) = FCF_{N+1} / (WACC − g_terminal)
= $3.33B / (9.0% − 2.5%)
= $51.26B
PV(TV) = TV / (1 + WACC)^10
= $51.26B / 2.367
= $21.65B
9 · Reconciliation check (DCF PV vs. the market)
This isn't a fair value — it's the inverse check. The solver built the scenario so that DCF PV reproduces the current enterprise value; if the normal bracket worked the delta below is ~0 by construction. A non-zero delta only appears when the solver fell through to the widened margin band.
Σ PV(FCF_1..10) = $1.23B
+ PV(TV) = $21.65B
= Enterprise value = $22.88B (≈ EV target $22.88B by construction)
− Total debt = $14.66B
+ Cash = $209.9M
= Equity value = $8.43B
÷ Diluted shares = 455.3M
= DCF PV / share = $18.51
Market price = $18.51
Reconciliation Δ = −0.0% (≈ 0 by construction — the solver anchored on this price)
Every rule above — growth-source priority, plateau tiers, compound cap, solver ladder, flag colours — is documented on the expectations scenario methodology.