| 2018 | 2019 | 2020 | 2021 (projected) | Current Assets | 2.06 B | 10.56 B | 12.15 B | 13.11 B | Total Assets | 45.06 B | 53.59 B | 61.63 B | 56.37 B |
Should you drop Carnival Corp (NYSE:CCL) after the new volatility hike?
 | By Rifka Kats | Macroaxis Story |
28% of stocks are less volatile than Carnival, and above 99% of all equities are expected to generate higher returns over the next 90 days. Although many risk-takers are getting more into consumer cyclical space, some of us are not very happy with Carnival Corp's current volatility. We will summarize why it could be a different year for Carnival Corp shareholders. Carnival Corp's seemingly stabilizing volatility may still impact the value of the stock as we estimate Carnival Corp as currently undervalued. The real value, based on our calculations, is getting close to 25.83 per share.
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Reviewed by Raphi Shpitalnik
Carnival Corp has 32.24 B in debt with debt to equity (D/E) ratio of 1.8, which is OK given its current industry classification. The entity has a current ratio of 1.14, demonstrating that it is in a questionable position to pay out its financial commitments when the payables are due. Volatility is a rate at which the price of Carnival or any other equity instrument increases or decreases for a given set of returns. It is measured by calculating the standard deviation of the annualized returns over a given period of time and shows the range to which the price of Carnival may increase or decrease. In other words, similar to Carnival's beta indicator, it measures the risk of Carnival and helps estimate the fluctuations that may happen in a short period of time. So if prices of Carnival fluctuate rapidly in a short time span, it is termed to have high volatility, and if it swings slowly in a more extended period, it is understood to have low volatility. Please read more on our technical analysis page.
How important is Carnival's Liquidity
Carnival financial leverage refers to using borrowed capital as a funding source to finance Carnival ongoing operations. It is usually used to expand the firm's asset base and generate returns on borrowed capital. Carnival financial leverage is typically calculated by taking the company's all interest-bearing debt and dividing it by total capital. So the higher the debt-to-capital ratio (i.e., financial leverage), the riskier the company. Financial leverage can amplify the potential profits to Carnival's owners, but it also increases the potential losses and risk of financial distress, including bankruptcy, if the firm cannot cover its debt costs. The degree of Carnival's financial leverage can be measured in several ways, including by ratios such as the debt-to-equity ratio (total debt / total equity), equity multiplier (total assets / total equity), or the debt ratio (total debt / total assets). Please check the breakdown between Carnival's total debt and its cash.
Carnival Gross Profit
Carnival Gross Profit growth is one of the most critical measures in evaluating the company. The Gross Profit growth rate is calculated simply by comparing Carnival previous period's values with its current period's values. Each time period you're measuring should be of equal lengths the increase or decrease, in a company's Gross Profit between two periods. Here we show Carnival Gross Profit growth over the last 10 years. Please check Carnival's gross profit and other fundamental indicators for more details.
Carnival Volatility Drivers
Carnival unsystematic risk is unique to Carnival and usually not directly affected by the market or economic environment. An example of unsystematic risk is the possibility of poor earnings or a layoff due to coronavirus. One may mitigate nonsystematic risk by buying different securities in the same industry or by buying in different sectors. For example, if you have a position in Carnival you can also buy Yatra Online. You can also mitigate this risk by investing in the consumer discretionary sector as well as in companies having nothing to do with it. This type of risk is also called diversifiable risk and can be understood from analyzing Carnival important indicators over time. Here we run a correlation analysis between relevant fundamental ratios over at least ten year period to find a relationship in the way they react to changes in Carnival income statement and balance sheet. Here are more details about Carnival volatility.Click cells to compare fundamentals
Is Carnival valued adequately by the market?
The firm reported the last year's revenue of 141 M. Reported Net Loss for the year was (9.13 B) with profit before taxes, overhead, and interest of 834 M.
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This story should be regarded as informational only and should not be considered a solicitation to sell or buy any financial products. Macroaxis does not express any opinion as to the present or future value of any investments referred to in this post. This post may not be reproduced without the consent of Macroaxis LLC. Macroaxis LLC and Rifka Kats do not own shares of Carnival. Please refer to our Terms of Use for any information regarding our disclosure principles.