Norwegian Cruise Line Holdings Ltd. (NCLH): Among the Worst Performing Stocks in S&P 500 So Far in 2025

Yahoo

02-05-2025

We recently published a list of the 11 Worst Performing Stocks in S&P 500 So Far in 2025. In this article, we will take a look at where Norwegian Cruise Line Holdings Ltd. (NYSE:NCLH) stands against other worst performing stocks this year.
After a two-year surge of 53%, marking the best performance for the broad market index since the 1997-98 rally, stocks have been taken for a wild ride in 2025 due to uncertainties around recent tariffs, resulting in a year-to-date decline of nearly 6%.
READ ALSO: 11 Most Promising Stocks According to Analysts and 15 Best Dividend Stocks to Buy for Long-Term Passive Income.
Trends over the past century have shown that sustained high returns are uncommon. Following the strong back-to-back performance in the 1920s, markets fell sharply in 1929, which marked the beginning of the Great Depression. Then, after recovering in 1935 and 1936, it took a giant step back again a year later.
A recent report by a leading investment banking company also pointed out how, historically, bull markets produce mediocre returns in the third year. Although they are usually not negative. The New York-based firm has projected positive but muted returns for 2025, while also noting that the continued adoption of artificial intelligence has the potential to lead to a productivity boom and a stronger market rally.
The broad market index ended 0.74% higher on April 24, gaining 4.6% for the week, driven by a rebound in tech shares. The US Dollar also had its first weekly rise since March, as investors looked for signs that the ongoing trade war may be easing.
Washington also appears to have softened its stance on trade relations with Beijing. In an interview with Time magazine on April 22, Trump stated his administration was engaged with China on striking a tariff deal. The US president also expects announcements on many other trade deals to be made over the next three to four weeks.
While talking to CNBC, Jay Hatfield, founder and chief investment officer of InfraCap, expressed optimism that the worst of the uncertainty around tariffs is over:
'The confusion about whether there's really talks going on with China or not took some steam out of the market. Our view is that we've reached peak tariff tantrum and so it's likely to be more positive than negative.'
Chip Rewey, CIO of Rewey Asset Management, said the following on the situation by Reuters:
'This week you've seen kind of relief that maybe some of the worst case of the Trump tariff actions won't come true. While we've recovered from some of the lows, we haven't pushed back to highs. And I think somewhere in that range is where we'll stay for a while.'
With that said, let's now head over to discuss the worst performing stocks this year.
A luxurious cruise ship overlooking a stunning horizon, highlighting the variety of its itineraries.
For this article, we went through screeners to identify stocks listed on the S&P index. From there, we picked the top 11 stocks with the worst year-to-date negative returns in share price, as of the close of business on Friday, April 25, 2025.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter's strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
YTD Decline in Share Price: -33.53%
Norwegian Cruise Line Holdings Ltd. (NYSE:NCLH) is a global cruise company, offering itineraries to over 700 destinations. It operates Norwegian Cruise Line, Oceania Cruises, and Regent Seven Seas Cruises. The company has a combined fleet of 32 ships and over 66,500 berths.
On February 27, Norwegian Cruise Line Holdings Ltd. (NYSE:NCLH) announced results for the fiscal year 2024. The company generated a record revenue of $9.5 billion, growing 11% year-over-year. GAAP net income was posted at $910.3 million, surging 448% compared to 2023. Earnings per share increased 386% from the prior year to $1.89.
Despite impressive financial results, Norwegian Cruise Line Holdings Ltd. (NYSE:NCLH)'s share price has been on a steady decline since the earnings call, during which the company stated that it expects net cruise costs in Q1 FY25 to grow by nearly 4% due to increased dry dock capacity days. The company also noted that it could face headwinds in foreign exchange from a strong US dollar.
Investor sentiment has also been dented by the Trump administration's recent statements about raising taxes on foreign-flagged cruise ships. Ariel Appreciation Fund stated the following regarding Norwegian Cruise Line Holdings Ltd. (NYSE:NCLH) in its Q1 2025 investor letter:
'Lastly, new holding, Norwegian Cruise Line Holdings Ltd. (NYSE:NCLH) declined alongside the sector during the period, following investor concerns about a potential new tax on cruise lines. Although, we believe the risk of any potential exposure is currently priced in, we note cruise lines operate globally and determining taxable income on a jurisdiction basis can be extremely complex. Generally, operators benefit from exemptions under Section 883 of the IRS code and bilateral tax treaties that relieve them from paying corporate income tax on profits beyond the taxes already paid in their operating regions. The elimination of the carve-out would require a Congressional vote. Meanwhile, NCLH continues to deliver robust quarterly earnings, highlighted by strong consumer demand, healthy onboard spending, attractive pricing, solid cost containment and sustained progress on leverage reduction. Looking ahead, NCLH remains focused on right sizing its cost base and improving margins to further strengthen its foundation for sustainable and profitable growth.'
With year-to-date declines of 33.53%, Norwegian Cruise Line Holdings Ltd. (NYSE:NCLH) is among the worst performing stocks this year.
Overall, NCLH ranks 11th among the 11 Worst Performing Stocks in S&P 500 So Far in 2025. While we acknowledge the potential of NCLH, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter time frame. There is an AI stock that went up since the beginning of 2025, while popular AI stocks lost around 25%. If you are looking for an AI stock that is more promising than NCLH but that trades at less than 5 times its earnings, check out our report about this cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.