ROYAL CARIBBEAN CRUISES LTD

Where It Passes

Where It Falls Short

• Efficiency0% pass✓ 1✗ 10▾

  No clean pass — all 8 investors flag at least one efficiency criterion

  Current Ratio0.22

  ✗Graham>= 2.0

  ROIC (3-5 yr avg)3.6%

  ✗Buffett> 10%

  ROIC - WACC-6.4%

  ✗BuffettPositive (WACC = 10%)

  EBIT / (NWC + Net Fixed Assets)19.6%

  ✗Greenblatt> 25%

  Current Ratio Change YoY0.17 -> 0.18

  ✓PiotroskiIncreased YoY

  Revenue / Total Assets Change YoY0.44x -> 0.43x

  ✗PiotroskiImproved YoY

  Current Assets / Current Liabilities0.22

  ✗Dreman> 1.5

  Return on Invested Capital12.2%

  ✗Munger> 15%

  ROIC (high and growing)FY2023: ROIC=8.7%; FY2024: ROIC=11.7%; FY2025: ROIC=12.4%

  ✗AkreLatest 3 consecutive FYs: ROIC > 15% in each

  Reinvestment Rate x ROIC8.6% (RR=70% x ROIC=12.2%)

  ✗AkreReinvestment Rate * ROIC > 10%

  ROIC (5-year)1/5 years above 12% (latest 12.4%)

  ✗SleepROIC > 12% in a majority of years
• Valuation models0% pass✗ 11▾

  RCL overvalued: all 11 models price fair value below $323.27 (median $120.44)

  Graham fair value$114.16

  ✗Graham-183.2% margin vs $323.27

  Buffett fair value$289.90

  ✗Buffett-11.5% margin vs $323.27

  Lynch fair value$177.23

  ✗Lynch-82.4% margin vs $323.27

  Greenblatt fair value$115.80

  ✗Greenblatt-179.2% margin vs $323.27

  Dreman fair value$164.30

  ✗Dreman-96.8% margin vs $323.27

  Munger fair value$120.44

  ✗Munger-168.4% margin vs $323.27

  Pabrai fair value$194.59

  ✗Pabrai-66.1% margin vs $323.27

  Akre fair value$49.96

  ✗Akre-547.1% margin vs $323.27

  Marks fair value$11.16

  ✗Marks-2796.7% margin vs $323.27

  Ackman fair value$163.71

  ✗Ackman-97.5% margin vs $323.27

  Templeton fair value$10.56

  ✗Templeton-2961.3% margin vs $323.27
• Verdicts7% pass✓ 1✗ 14▾

  Split decision: 13 FAIL · 2 NEUTRAL · 1 PASS

  Overall verdict

  ✗GrahamFAIL (1/9)✗BuffettFAIL (1/9)✗LynchFAIL (1/7)✗GreenblattRank #1276•PiotroskiNEUTRAL (F-Score 7)✗DremanFAIL (3/11)✓MungerPASS (2/4)✗PabraiFAIL (0/3)✗AkreFAIL (1/6)✗MarksFAIL (3/5)•AckmanNEUTRAL (6/9)✗TempletonFAIL (2/8)✗SleepFAIL (2/6)✗AsnessFAIL (Rank #1311/2370 (Top 55.3%))✗NeffFAIL (3/6)✗SchlossFAIL (2/7)✗OshaughnessyFAIL (Rank #661/963 (Top 68.6%))
• Valuation8% pass✓ 3✗ 25▾

  12 of 13 flag RCL's valuation — Graham, Lynch, Greenblatt +9 more

  Net income / market capitalization+5.26%; #1600/6340 (top 25.2%)

  ✓AsnessTop 30% of eligible cross-section✗OshaughnessyTop 10% of eligible cross-section

  Price / 3-yr avg EPS29.5x

  ✗Graham<= 15x

  Price-to-Book Ratio8.7x

  ✗Graham<= 1.5x

  P/E x P/B257.10

  ✗Graham<= 22.5

  Basic earnings-growth PEG (dividends excluded)

  ✗Lynch< 1.0 (ideally < 0.5)

  EBIT / Enterprise Value4.6%

  ✗Greenblatt> 10%

  Earnings Yield + ROC AssessmentEY=4.6%, ROC=19.6%

  ✗GreenblattBoth EY > 10% and ROC > 25%

  Price / EPS20.7x

  ✗Dreman< 12x✗Templeton< 12x (fixed ceiling; proxy for the market's cheapest 40%)

  Price / (CFO / Shares)13.5x

  ✗Dreman< 8x

  Price / Book Value per Share8.7x

  ✗Dreman< 1.2x✗Templeton< 1.5x✗SchlossP/B <= 0.80x (app cutoff)

  Valuation ReasonablenessP/E=20.7x, OE Yield=0.9%

  ✓MungerP/E < 25 or Owner Earnings Yield > 5%

  P/E or FCF YieldP/E=20.7x, FCF Yield=1.4%

  ✗PabraiP/E < 15 or FCF Yield > 10%

  P/B or P/E vs. Historical AverageP/E=20.7x, P/B=8.7x

  ✗MarksP/E < 15 or P/B < 2.0

  Discount to Intrinsic Value-96.8% (IV=$164.30 vs Price=$323.27)

  ✗Marks>= 20% below intrinsic value

  Price / FCF per Share70.7x

  ✗Ackman<= 25

  Price vs. Trailing Low157% of trailing low ($205.44)

  ✗Templeton<= 120% of trailing low (certified split-adjusted live window)

  Positive book equity / market capitalization+0.1355; #4555/6449 (top 70.6%)

  ✗AsnessTop 30% of eligible cross-section

  Price / Diluted EPS20.7x

  ✗NeffP/E <= 15x (app proxy for a P/E 40%-60% below the market)

  (EPS CAGR % + Dividend Yield %) / P/E0.24

  ✗Neff> 0.7 (Neff's published traditional edge)

  Price / Tangible Book Value per Share9.89x

  ✗SchlossP/TBV <= 1.00x (app cutoff)

  Book Value per Share Change+0.6%

  ✓SchlossLatest BVPS >= earliest BVPS over >= 3 years (app rule)

  Revenue / market capitalization+0.2213; #3679/5247 (top 70.1%)

  ✗OshaughnessyTop 10% of eligible cross-section

  (Operating cash flow - capex) / market capitalization+1.75%; #2297/4519 (top 50.8%)

  ✗OshaughnessyTop 10% of eligible cross-section

  Trailing six-month price return through the evaluation date+22.56%; #1241/6202 (top 20.0%)

  ✗OshaughnessyTop 10% of eligible cross-section
• Debt & Leverage17% pass✓ 2✗ 13▾

  10 of 12 flag RCL's debt & leverage — Graham, Buffett, Lynch +7 more

  LT Debt vs Net Current Assets

  ✗GrahamLT Debt <= Net Current Assets

  Debt/Equity & Interest CoverageD/E: 1.91, IC: 4.9x

  ✗BuffettD/E < 0.5 AND Interest Coverage > 5x

  Total Debt / Equity1.91

  ✗Lynch< 0.33

  Cash - Long-term Debt

  ✗LynchPositive preferred

  LT Debt / Total Assets Change0.00% -> 0.00%

  ✓PiotroskiDecreased YoY

  Current Assets / Current Liabilities0.22

  ✗Dreman> 1.5✗SchlossCurrent ratio >= 1.50x (app cutoff)

  Total Debt / Shareholders' Equity1.91

  ✗Dreman< 0.8✗Templeton< 1.0 (fixed cap; proxy for below-sector-median leverage)✗SchlossD/E < 1.00x

  Debt Levels1.91

  ✗MungerDebt/Equity < 0.5✗AkreDebt/Equity < 0.3

  Interest Coverage & Debt/EBITDAIC=4.9x, D/EBITDA=3.1x

  ✓MarksInterest Coverage > 3x; Debt/EBITDA < 4x

  Total Debt / Shareholders Equity1.91

  ✗Ackman<= 1.0

  Negative debt-to-equity (higher means less debt)-1.9086; #3751/4210 (top 89.1%)

  ✗AsnessTop 30% of eligible cross-section
• Growth25% pass✓ 4✗ 9▾

  6 of 8 flag RCL's growth — Graham, Lynch, Dreman +3 more

  EPS Growth (3-yr avg, 10-yr window)

  ✗Graham>= 33% growth

  Basic earnings-growth PEG (dividends excluded)

  ✗Lynch< 1.0 (ideally < 0.5)

  3-5 Year EPS CAGR

  ✗Lynch15-30% (Fast Grower); > 0% to pass

  Inventory Growth vs Revenue GrowthInv: 13.0% vs Rev: 9.7%

  ✗LynchInventory growth < Revenue growth

  EPS Growth Direction

  ✗DremanPositive over recent years

  EPS CAGR

  ✗Dreman> 5% annualized

  Positive Net Income Frequency23/26 years positive

  ✓MarksPositive net income in >= 7 of last 10 years

  3yr Median Revenue Growth18.6%

  ✓Ackman>= 5%

  Positive EPS Growth Frequency5/5 years with positive EPS growth

  ✓AckmanPositive EPS growth in >= 3 of last 5 years

  5-Year EPS CAGR

  ✗Templeton> 0% (5-year EPS CAGR)

  Revenue growth vs. gross and operating margin trendgross margin 44.1% -> 49.4%, operating margin 20.7% -> 27.4%

  ✗SleepRevenue rising; gross margin flat or falling; operating margin holding

  5-year Revenue CAGR52.0%

  ✓SleepCAGR > 7%

  3-5 Year Diluted EPS CAGR4.1% over 5 years

  ✗Neff7%-20% annualized
• Profitability31% pass✓ 16✗ 19▾

  11 of 16 flag RCL's profitability — Graham, Buffett, Lynch +8 more

  Net income / market capitalization+5.26%; #1600/6340 (top 25.2%)

  ✓AsnessTop 30% of eligible cross-section✗OshaughnessyTop 10% of eligible cross-section

  Positive EPS (10 years)21/26 years positive

  ✗GrahamPositive EPS every year for 10 years

  EPS Growth (3-yr avg, 10-yr window)

  ✗Graham>= 33% growth

  Net Income Positive (10+ years)23/26 years positive

  ✗BuffettPositive every year for 10+ years

  ROE (up to 5-year arithmetic mean)-12.4%

  ✗Buffett> 15% arithmetic mean (app rule)

  Operating Margin (10-yr trend)27.4% (latest)

  ✗BuffettStable or rising over 10 years

  Free Cash Flow Proxy$3.6B

  ✓BuffettPositive and growing

  Earnings Variance (10-yr CoV)

  ✗BuffettCoV < 0.3

  Retained Earnings Effectiveness

  ✗Buffett$1 retained -> > $1 market value created

  Basic earnings-growth PEG (dividends excluded)

  ✗Lynch< 1.0 (ideally < 0.5)

  3-5 Year EPS CAGR

  ✗Lynch15-30% (Fast Grower); > 0% to pass

  ROE38.9%

  ✓Lynch> 15%

  EBIT / Enterprise Value4.6%

  ✗Greenblatt> 10%

  Earnings Yield + ROC AssessmentEY=4.6%, ROC=19.6%

  ✗GreenblattBoth EY > 10% and ROC > 25%

  Net Income / Total Assets10.25%

  ✓PiotroskiROA > 0

  ROA Change YoY7.76% -> 10.25% (delta: +2.49%)

  ✓PiotroskiCurrent ROA > Prior ROA

  (CFO / Total Assets) vs ROACFO/Assets=15.53%, ROA=10.25%

  ✓PiotroskiCFO/Assets > ROA

  Gross Margin Change YoY47.5% -> 49.4%

  ✓PiotroskiImproved YoY

  Pre-Tax Income / Revenue24.4%

  ✓Dreman>= 8%

  Net Income / Shareholders' Equity38.9%

  ✓Dreman> 12%

  Margin of SafetyP/E=20.7x, P/B=8.7x

  ✗PabraiP/B < 1.5 or P/E < 15

  Return on Equity38.8% (3-yr avg)

  ✓AkreROE > 20% (3-year avg)

  Discount to Intrinsic Value-96.8% (IV=$164.30 vs Price=$323.27)

  ✗Marks>= 20% below intrinsic value

  Positive Net Income Frequency23/26 years positive

  ✓MarksPositive net income in >= 7 of last 10 years

  Operating Income / Revenue27.6%

  ✓Ackman>= 15%

  Net Income / Shareholders Equity38.9%

  ✓Ackman>= 15%

  5-Year EPS CAGR

  ✗Templeton> 0% (5-year EPS CAGR)

  Operating Margin Trend20.7% (2023) -> 27.4% (2025)

  ✓TempletonNon-negative operating-margin trend over 3 years

  Revenue growth vs. gross and operating margin trendgross margin 44.1% -> 49.4%, operating margin 20.7% -> 27.4%

  ✗SleepRevenue rising; gross margin flat or falling; operating margin holding

  Gross profit / total assets+21.27%; #1976/3702 (top 53.4%)

  ✗AsnessTop 30% of eligible cross-section

  Net income / positive book equity+38.85%; #308/5226 (top 5.9%)

  ✓AsnessTop 30% of eligible cross-section

  Negative 5-year standard deviation of ROA-0.0995; #3474/5884 (top 59.0%)

  ✗AsnessTop 30% of eligible cross-section

  3-5 Year Diluted EPS CAGR4.1% over 5 years

  ✗Neff7%-20% annualized

  Positive Diluted-EPS Years7/10 years positive

  ✓Schloss>= 70% positive over 5-10 observed years (app rule)
• Cash Flow50% pass✓ 6✗ 6▾

  5 of 10 pass — Lynch, Dreman, Pabrai +2 more object

  Free Cash Flow Proxy$3.6B

  ✓BuffettPositive and growing

  FCF Positive and Growing$1.5B

  ✗LynchPositive and growing

  Operating Cash Flow$6.5B

  ✓PiotroskiCFO > 0

  (CFO / Total Assets) vs ROACFO/Assets=15.53%, ROA=10.25%

  ✓PiotroskiCFO/Assets > ROA

  Price / (CFO / Shares)13.5x

  ✗Dreman< 8x

  P/E or FCF YieldP/E=20.7x, FCF Yield=1.4%

  ✗PabraiP/E < 15 or FCF Yield > 10%

  FCF Positive13/24 years FCF positive

  ✓MarksPositive FCF in majority of recent years

  (OCF - CapEx) / Market Cap1.7%

  ✗Ackman>= 4%

  Price / FCF per Share70.7x

  ✗Ackman<= 25

  Positive Operating Cash Flow frequency22/24 years positive

  ✓SleepPositive OCF in >= 70% of available years

  Operating Cash Flow - Capital Expenditures$1.5B

  ✓Neff> $0 (app proxy for a strong fundamental case)

  (Operating cash flow - capex) / market capitalization+1.75%; #2297/4519 (top 50.8%)

  ✗OshaughnessyTop 10% of eligible cross-section