Intrinsic value of Norwegian Cruise Line Holdings Ltd. - NCLH

Previous Close

$54.28

  Intrinsic Value

$27.00

stock screener

  Rating & Target

str. sell

-50%

Previous close

$54.28

 
Intrinsic value

$27.00

 
Up/down potential

-50%

 
Rating

str. sell

We calculate the intrinsic value of NCLH stock by summing up the current values of future distributable cash flows generated by the company and dividing the sum by the number of outstanding shares. As such, the intrinsic value calculation depends entirely on projections. The more accurate your projections of the company's performance are - the more reliable is the intrinsic value calculation result. Please make sure to check the stock valuation input data below and adjust it if necessary. The quality of the output (intrinsic valuation result) is only as good as the quality of the input. See also DISCLAIMERS.

STOCK VALUATION INPUT DATA

Revenue (in 0001), $M
Initial revenue growth rate, %
Terminal revenue growth rate, %
Revenue decline factor
Initial discount rate, %
Discount rate multiplier
Variable cost ratio, %
Fixed operating expenses, $M
Interest rate on debt, %
Effective corporate tax rate, %
Production assets / Revenue, %
Life of production assets, yrs
Working capital / Revenue, %
Revenue / Adjusted assets
Adjusted equity ratio
Cash flow adjustment, % of Revenue
Book value of equity, $M
Shares outstanding, mln
Market capitalization, $bln 11.8

 

FINANCIAL STATEMENTS FORECAST and PRESENT VALUE CALCULATION

Fiscal year
   2
   3
   4
   5
   6
   7
   8
   9
   10
   11
   12
   13
   14
   15
   16
   17
   18
   19
   20
   21
   22
   23
   24
   25
   26
   27
   28
   29
   30
   31

INCOME STATEMENT

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenue growth rate, %
  10.50
  9.95
  9.45
  9.01
  8.61
  8.25
  7.92
  7.63
  7.37
  7.13
  6.92
  6.73
  6.55
  6.40
  6.26
  6.13
  6.02
  5.92
  5.83
  5.74
  5.67
  5.60
  5.54
  5.49
  5.44
  5.39
  5.36
  5.32
  5.29
  5.26
Revenue, $m
  6,691
  7,357
  8,052
  8,778
  9,533
  10,319
  11,137
  11,987
  12,870
  13,788
  14,741
  15,733
  16,764
  17,837
  18,953
  20,115
  21,326
  22,588
  23,904
  25,276
  26,709
  28,205
  29,768
  31,402
  33,110
  34,896
  36,765
  38,721
  40,768
  42,912
Variable operating expenses, $m
  4,941
  5,411
  5,902
  6,414
  6,947
  7,502
  8,078
  8,678
  9,301
  9,949
  10,401
  11,101
  11,828
  12,585
  13,373
  14,193
  15,047
  15,937
  16,866
  17,834
  18,845
  19,901
  21,004
  22,156
  23,361
  24,622
  25,940
  27,320
  28,765
  30,277
Fixed operating expenses, $m
  360
  368
  376
  384
  392
  401
  410
  419
  428
  438
  447
  457
  467
  477
  488
  499
  510
  521
  532
  544
  556
  568
  581
  593
  606
  620
  633
  647
  662
  676
Total operating expenses, $m
  5,301
  5,779
  6,278
  6,798
  7,339
  7,903
  8,488
  9,097
  9,729
  10,387
  10,848
  11,558
  12,295
  13,062
  13,861
  14,692
  15,557
  16,458
  17,398
  18,378
  19,401
  20,469
  21,585
  22,749
  23,967
  25,242
  26,573
  27,967
  29,427
  30,953
Operating income, $m
  1,390
  1,578
  1,774
  1,980
  2,194
  2,417
  2,649
  2,890
  3,141
  3,401
  3,893
  4,175
  4,469
  4,774
  5,092
  5,424
  5,769
  6,130
  6,506
  6,898
  7,308
  7,736
  8,184
  8,652
  9,142
  9,655
  10,191
  10,753
  11,342
  11,959
EBITDA, $m
  2,187
  2,433
  2,689
  2,957
  3,236
  3,527
  3,829
  4,144
  4,471
  4,811
  5,164
  5,532
  5,914
  6,312
  6,726
  7,158
  7,608
  8,077
  8,567
  9,077
  9,611
  10,168
  10,751
  11,360
  11,997
  12,663
  13,361
  14,092
  14,857
  15,658
Interest expense (income), $m
  303
  351
  403
  458
  516
  576
  638
  703
  770
  840
  913
  989
  1,068
  1,149
  1,234
  1,323
  1,415
  1,511
  1,611
  1,715
  1,823
  1,937
  2,055
  2,178
  2,307
  2,442
  2,583
  2,730
  2,884
  3,046
  3,215
Earnings before tax, $m
  1,039
  1,174
  1,316
  1,464
  1,618
  1,779
  1,946
  2,120
  2,300
  2,488
  2,904
  3,108
  3,319
  3,540
  3,770
  4,009
  4,259
  4,519
  4,791
  5,075
  5,372
  5,682
  6,006
  6,345
  6,700
  7,072
  7,461
  7,869
  8,296
  8,744
Tax expense, $m
  281
  317
  355
  395
  437
  480
  525
  572
  621
  672
  784
  839
  896
  956
  1,018
  1,082
  1,150
  1,220
  1,294
  1,370
  1,450
  1,534
  1,622
  1,713
  1,809
  1,909
  2,015
  2,125
  2,240
  2,361
Net income, $m
  759
  857
  961
  1,069
  1,181
  1,299
  1,420
  1,547
  1,679
  1,816
  2,120
  2,269
  2,423
  2,584
  2,752
  2,927
  3,109
  3,299
  3,497
  3,705
  3,921
  4,148
  4,384
  4,632
  4,891
  5,163
  5,447
  5,744
  6,056
  6,383

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Total assets, $m
  16,811
  18,484
  20,231
  22,054
  23,953
  25,928
  27,982
  30,118
  32,337
  34,642
  37,039
  39,530
  42,121
  44,816
  47,620
  50,540
  53,583
  56,753
  60,059
  63,509
  67,109
  70,868
  74,795
  78,900
  83,191
  87,679
  92,374
  97,288
  102,433
  107,820
Adjusted assets (=assets-cash), $m
  16,811
  18,484
  20,231
  22,054
  23,953
  25,928
  27,982
  30,118
  32,337
  34,642
  37,039
  39,530
  42,121
  44,816
  47,620
  50,540
  53,583
  56,753
  60,059
  63,509
  67,109
  70,868
  74,795
  78,900
  83,191
  87,679
  92,374
  97,288
  102,433
  107,820
Revenue / Adjusted assets
  0.398
  0.398
  0.398
  0.398
  0.398
  0.398
  0.398
  0.398
  0.398
  0.398
  0.398
  0.398
  0.398
  0.398
  0.398
  0.398
  0.398
  0.398
  0.398
  0.398
  0.398
  0.398
  0.398
  0.398
  0.398
  0.398
  0.398
  0.398
  0.398
  0.398
Average production assets, $m
  14,017
  15,412
  16,869
  18,389
  19,972
  21,619
  23,332
  25,112
  26,963
  28,885
  30,883
  32,961
  35,121
  37,368
  39,706
  42,141
  44,678
  47,321
  50,078
  52,954
  55,956
  59,090
  62,365
  65,787
  69,365
  73,107
  77,023
  81,120
  85,409
  89,901
Working capital, $m
  -2,302
  -2,531
  -2,770
  -3,019
  -3,279
  -3,550
  -3,831
  -4,123
  -4,427
  -4,743
  -5,071
  -5,412
  -5,767
  -6,136
  -6,520
  -6,920
  -7,336
  -7,770
  -8,223
  -8,695
  -9,188
  -9,703
  -10,240
  -10,802
  -11,390
  -12,004
  -12,647
  -13,320
  -14,024
  -14,762
Total debt, $m
  7,470
  8,487
  9,550
  10,658
  11,812
  13,013
  14,262
  15,561
  16,910
  18,312
  19,769
  21,283
  22,858
  24,497
  26,202
  27,978
  29,827
  31,755
  33,765
  35,862
  38,051
  40,337
  42,725
  45,220
  47,829
  50,558
  53,413
  56,400
  59,528
  62,804
Total liabilities, $m
  10,221
  11,238
  12,301
  13,409
  14,563
  15,764
  17,013
  18,312
  19,661
  21,063
  22,520
  24,034
  25,609
  27,248
  28,953
  30,729
  32,578
  34,506
  36,516
  38,613
  40,802
  43,088
  45,475
  47,971
  50,580
  53,309
  56,164
  59,151
  62,279
  65,554
Total equity, $m
  6,590
  7,246
  7,931
  8,645
  9,389
  10,164
  10,969
  11,806
  12,676
  13,580
  14,519
  15,496
  16,511
  17,568
  18,667
  19,812
  21,004
  22,247
  23,543
  24,895
  26,307
  27,780
  29,320
  30,929
  32,611
  34,370
  36,211
  38,137
  40,154
  42,265
Total liabilities and equity, $m
  16,811
  18,484
  20,232
  22,054
  23,952
  25,928
  27,982
  30,118
  32,337
  34,643
  37,039
  39,530
  42,120
  44,816
  47,620
  50,541
  53,582
  56,753
  60,059
  63,508
  67,109
  70,868
  74,795
  78,900
  83,191
  87,679
  92,375
  97,288
  102,433
  107,819
Debt-to-equity ratio
  1.130
  1.170
  1.200
  1.230
  1.260
  1.280
  1.300
  1.320
  1.330
  1.350
  1.360
  1.370
  1.380
  1.390
  1.400
  1.410
  1.420
  1.430
  1.430
  1.440
  1.450
  1.450
  1.460
  1.460
  1.470
  1.470
  1.480
  1.480
  1.480
  1.490
Adjusted equity ratio
  0.392
  0.392
  0.392
  0.392
  0.392
  0.392
  0.392
  0.392
  0.392
  0.392
  0.392
  0.392
  0.392
  0.392
  0.392
  0.392
  0.392
  0.392
  0.392
  0.392
  0.392
  0.392
  0.392
  0.392
  0.392
  0.392
  0.392
  0.392
  0.392
  0.392

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  759
  857
  961
  1,069
  1,181
  1,299
  1,420
  1,547
  1,679
  1,816
  2,120
  2,269
  2,423
  2,584
  2,752
  2,927
  3,109
  3,299
  3,497
  3,705
  3,921
  4,148
  4,384
  4,632
  4,891
  5,163
  5,447
  5,744
  6,056
  6,383
Depreciation, amort., depletion, $m
  797
  855
  915
  977
  1,042
  1,110
  1,181
  1,254
  1,330
  1,409
  1,271
  1,356
  1,445
  1,538
  1,634
  1,734
  1,839
  1,947
  2,061
  2,179
  2,303
  2,432
  2,566
  2,707
  2,855
  3,009
  3,170
  3,338
  3,515
  3,700
Funds from operations, $m
  1,556
  1,712
  1,876
  2,046
  2,224
  2,409
  2,601
  2,801
  3,009
  3,226
  3,391
  3,625
  3,869
  4,122
  4,386
  4,661
  4,947
  5,246
  5,558
  5,884
  6,224
  6,579
  6,951
  7,339
  7,746
  8,171
  8,616
  9,083
  9,571
  10,083
Change in working capital, $m
  -219
  -229
  -239
  -250
  -260
  -270
  -281
  -292
  -304
  -316
  -328
  -341
  -355
  -369
  -384
  -400
  -417
  -434
  -453
  -472
  -493
  -515
  -538
  -562
  -588
  -614
  -643
  -673
  -704
  -738
Cash from operations, $m
  1,775
  1,941
  2,115
  2,296
  2,484
  2,679
  2,882
  3,094
  3,313
  3,541
  3,719
  3,966
  4,223
  4,491
  4,770
  5,061
  5,364
  5,680
  6,011
  6,356
  6,717
  7,094
  7,489
  7,901
  8,333
  8,786
  9,259
  9,755
  10,275
  10,820
Maintenance CAPEX, $m
  -522
  -577
  -634
  -694
  -757
  -822
  -890
  -960
  -1,033
  -1,110
  -1,189
  -1,271
  -1,356
  -1,445
  -1,538
  -1,634
  -1,734
  -1,839
  -1,947
  -2,061
  -2,179
  -2,303
  -2,432
  -2,566
  -2,707
  -2,855
  -3,009
  -3,170
  -3,338
  -3,515
New CAPEX, $m
  -1,334
  -1,395
  -1,457
  -1,520
  -1,583
  -1,647
  -1,713
  -1,780
  -1,850
  -1,923
  -1,998
  -2,077
  -2,160
  -2,247
  -2,339
  -2,435
  -2,537
  -2,644
  -2,757
  -2,876
  -3,002
  -3,135
  -3,275
  -3,422
  -3,578
  -3,742
  -3,915
  -4,097
  -4,289
  -4,492
Cash from investing activities, $m
  -1,856
  -1,972
  -2,091
  -2,214
  -2,340
  -2,469
  -2,603
  -2,740
  -2,883
  -3,033
  -3,187
  -3,348
  -3,516
  -3,692
  -3,877
  -4,069
  -4,271
  -4,483
  -4,704
  -4,937
  -5,181
  -5,438
  -5,707
  -5,988
  -6,285
  -6,597
  -6,924
  -7,267
  -7,627
  -8,007
Free cash flow, $m
  -81
  -30
  23
  82
  144
  210
  280
  353
  430
  509
  532
  618
  707
  799
  894
  992
  1,093
  1,198
  1,307
  1,419
  1,536
  1,657
  1,782
  1,913
  2,048
  2,189
  2,336
  2,488
  2,648
  2,814
Issuance/(repayment) of debt, $m
  978
  1,017
  1,063
  1,108
  1,154
  1,201
  1,249
  1,298
  1,349
  1,402
  1,457
  1,515
  1,575
  1,638
  1,705
  1,776
  1,850
  1,928
  2,010
  2,097
  2,189
  2,286
  2,388
  2,495
  2,609
  2,729
  2,855
  2,988
  3,128
  3,275
Issuance/(repurchase) of shares, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash from financing (excl. dividends), $m  
  978
  1,017
  1,063
  1,108
  1,154
  1,201
  1,249
  1,298
  1,349
  1,402
  1,457
  1,515
  1,575
  1,638
  1,705
  1,776
  1,850
  1,928
  2,010
  2,097
  2,189
  2,286
  2,388
  2,495
  2,609
  2,729
  2,855
  2,988
  3,128
  3,275
Total cash flow (excl. dividends), $m
  897
  987
  1,086
  1,190
  1,298
  1,411
  1,529
  1,651
  1,779
  1,911
  1,989
  2,133
  2,282
  2,437
  2,599
  2,767
  2,943
  3,126
  3,317
  3,516
  3,725
  3,942
  4,170
  4,408
  4,657
  4,918
  5,190
  5,476
  5,775
  6,089
Retained Cash Flow (-), $m
  -627
  -656
  -685
  -715
  -744
  -774
  -805
  -837
  -870
  -904
  -939
  -977
  -1,015
  -1,056
  -1,099
  -1,145
  -1,193
  -1,243
  -1,296
  -1,352
  -1,411
  -1,474
  -1,539
  -1,609
  -1,682
  -1,759
  -1,841
  -1,926
  -2,017
  -2,112
Prev. year cash balance distribution, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash flow adjustment, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash available for distribution, $m
  270
  331
  401
  475
  554
  637
  724
  814
  909
  1,007
  1,050
  1,156
  1,266
  1,381
  1,499
  1,622
  1,750
  1,883
  2,021
  2,164
  2,314
  2,469
  2,631
  2,799
  2,975
  3,158
  3,350
  3,550
  3,759
  3,977
Discount rate, %
  6.80
  7.14
  7.50
  7.87
  8.27
  8.68
  9.11
  9.57
  10.05
  10.55
  11.08
  11.63
  12.21
  12.82
  13.46
  14.14
  14.84
  15.59
  16.37
  17.18
  18.04
  18.94
  19.89
  20.89
  21.93
  23.03
  24.18
  25.39
  26.66
  27.99
PV of cash for distribution, $m
  253
  288
  323
  351
  372
  387
  393
  392
  384
  369
  331
  309
  283
  255
  225
  196
  166
  139
  113
  91
  71
  54
  41
  30
  21
  14
  10
  6
  4
  2
Current shareholders' claim on cash, %
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0

Norwegian Cruise Line Holdings Ltd. (NCLH) is a global cruise company. The Company operates the Norwegian Cruise Line, Oceania Cruises and Regent Seven Seas Cruises brands. The Company had 25 ships with approximately 50,400 Berths, as of May 1, 2017. The Company's brands offer itineraries to various destinations around the world, including Europe, Asia, Australia, New Zealand, South America, Africa, Canada, Bermuda, Caribbean, Alaska and Hawaii. The Company's brands offer various features, amenities, and activities, including various accommodations, multiple dining venues, bars and lounges, spa, casino and retail shopping areas and various entertainment choices. All the brands offer a selection of shore excursions at each port of call, as well as hotel packages for stays before or after a voyage. As of December 31, 2016, its Norwegian offered 14 ships that were purpose-built to deliver the Freestyle Cruising product, which offered freedom, flexibility and choice to its guests.

FINANCIAL RATIOS  of  Norwegian Cruise Line Holdings Ltd. (NCLH)

Valuation Ratios
P/E Ratio 19.5
Price to Sales 2.5
Price to Book 2.7
Price to Tangible Book
Price to Cash Flow 9.9
Price to Free Cash Flow 83.3
Growth Rates
Sales Growth Rate 12.2%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate -2.7%
Cap. Spend. - 3 Yr. Gr. Rate 4.5%
Financial Strength
Quick Ratio 0
Current Ratio 0
LT Debt to Equity 128.7%
Total Debt to Equity 141%
Interest Coverage 3
Management Effectiveness
Return On Assets 7.4%
Ret/ On Assets - 3 Yr. Avg. 6.4%
Return On Total Capital 6%
Ret/ On T. Cap. - 3 Yr. Avg. 4.9%
Return On Equity 15.2%
Return On Equity - 3 Yr. Avg. 12.6%
Asset Turnover 0.4
Profitability Ratios
Gross Margin 41.5%
Gross Margin - 3 Yr. Avg. 39.4%
EBITDA Margin 28.5%
EBITDA Margin - 3 Yr. Avg. 27.3%
Operating Margin 19%
Oper. Margin - 3 Yr. Avg. 17.1%
Pre-Tax Margin 13.1%
Pre-Tax Margin - 3 Yr. Avg. 11.3%
Net Profit Margin 13%
Net Profit Margin - 3 Yr. Avg. 11.2%
Effective Tax Rate 1.1%
Eff/ Tax Rate - 3 Yr. Avg. 0.6%
Payout Ratio 0%

NCLH stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the NCLH stock intrinsic value calculation we used $6055 million for the last fiscal year's total revenue generated by Norwegian Cruise Line Holdings Ltd.. The default revenue input number comes from 0001 income statement of Norwegian Cruise Line Holdings Ltd.. You may change it if you feel that it should be adjusted for some unusual circumstances that are not expected to be repeated in the future or if you already know (from interim financial statements, for example) that this year's revenue is going to be quite different.

Revenue growth rate. Forecasted future revenue growth rate is the most important input parameter for the intrinsic value calculation. Unlike other input parameters that are reasonably expected to be in line with their historic averages or their historic trends, the revenue growth rate by and large is a wild card: nobody really knows what the company's revenue will be in the future. Of course, the level of unpredictability is different for different industries (utility companies being the most predictable and, thus, less risky).
    We use three input parameters to forecast the revenue growth rate in our NCLH stock valuation model: a) initial revenue growth rate of 10.5% whose default value is the revenue growth rate in the most recent quarter compared to the quarterly revenue a year ago; b) terminal revenue growth rate of 5% whose default value is chosen to be close to the average nominal (i.e. not adjusted for inflation) GDP growth rate; and c) revenue decline factor of 0.9, which stipulates that revenue growth rate in each forecasted year will be equal to the difference of the revenue growth rate in the preceding year and the terminal revenue growth rate multiplied by this revenue decline factor (with the passage of time the revenue growth rate will be approaching the terminal revenue growth rate, but not quite reaching it - though the difference could be infinitesimally small).
    At the revenue decline factor of 1, the future revenue growth rate is forecasted to be constant and equal to the initial revenue growth rate. The smaller the revenue decline factor, the faster the revenue growth rate will approach the terminal revenue growth.

Discount rate. The discount rate is used for determining the present value of future cash flows: future cash flows are "discounted" as at normal conditions (that translate into positive expected return on investment) one dollar today is worth more than the same dollar in the future. Unlike all other valuation models, we use variable discount rate, i.e. it increases for each consecutive year. This is done to account for higher risk of cash flows coming in further in the future.
    The initial discount rate of 6.8%, whose default value for NCLH is calculated based on our internal credit rating of Norwegian Cruise Line Holdings Ltd., is applied to the cash flow expected to be received a year from now (well, actually, to be precise, in the financial year following the base year - the last year for which we have financial statements). For each consecutive year the discount rate is multiplied by the discount rate multiplier of 1.05, e.i. each year it increases by 5%. Feel free to change this number to correspond to your level of risk assessment of Norwegian Cruise Line Holdings Ltd..
    By the way, it is easy to set the discount rate to be constant (this would make comparison with other valuation models easier): just set the discount rate multiplier equal to 1 and chose the magnitude of the initial discount rate to your liking.

Variable cost ratio is the ratio of variable costs (i.e. costs that fluctuate with fluctuation of the volume of production) to the revenue expressed as a percentage. In the calculation of intrinsic value of NCLH stock the variable cost ratio is equal to 74.2%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $352 million in the base year in the intrinsic value calculation for NCLH stock. These expenses increase with the level of inflation in subsequent years.

Interest rate on debt is the average all-in rate of interest paid by the company on its debt. It is set at 5.4% for Norwegian Cruise Line Holdings Ltd..

Corporate tax rate of 27% is the nominal tax rate for Norwegian Cruise Line Holdings Ltd.. In reality, companies find ways to pay much less taxes than that or not to pay them at all.

Cash flow adjustment could be used for any adjustment the investor deems necessary. Most commonly we use this field to account for stock options-related effects in excess of what is reported on the company's income statement. The cash flow adjustment is expressed as a percentage of the revenue, and in the current valuation of the NCLH stock is equal to 0%.

Production assets are the company's assets used for manufacturing products or provision of services. In the valuation model input table they are expressed as a percentage of revenue and for NCLH are equal to 209.5%.

Life of production assets of 24.3 years is the average useful life of capital assets used in Norwegian Cruise Line Holdings Ltd. operations. It is used to calculate yearly capital expenditures needed to keep these assets in good order - we call it the maintenance CAPEX.

Working capital is the difference between the company's current assets and liabilities. In the model we use the ratio of working capital to revenue, which for NCLH is equal to -34.4%. A negative number means that the company is apt at using financial resources of its suppliers and customers; a large positive number, on the other hand, means that it either provides in-kind financing to others or is not good at managing its inventories.

Book value of equity - $5963.001 million for Norwegian Cruise Line Holdings Ltd. - is used in calculation of the "floor" for intrinsic valuation based on the discounted cash flow (DCF) method. Even if the prospects are very bad for a company, its assets could always be sold now for their current fair market value.

Shares outstanding of 217.642 million for Norwegian Cruise Line Holdings Ltd. is needed to calculate the intrinsic value of one share.

Market capitalization is used here only for reference purposes and as a quick check that the share price and the number of shares outstanding numbers are correct - something especially to be cognizant about at stock splits. So, the market capitalization of Norwegian Cruise Line Holdings Ltd. at the current share price and the inputted number of shares is $11.8 billion.

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