On Monday, Carnival Corp (NYSE:CCL) shares gained more than 2% after announcing its most recent quarterly results. The company reported its fiscal fourth-quarter revenue and earnings before markets opened, missing the consensus for analyst expectations.
Carnival posted FQ4 GAAP earnings per share of -$2.31, missing the consensus for analyst expectations of -$1.27. On the other hand, its quarterly revenue of $1.29 billion came short of the average for analyst estimates by $250 million.
Although Carnival shares rallied more than 53% at the beginning of the year, through the 2nd of June, the stock has since plunged nearly 40%, swinging to a net year-to-date decline of 8.40%.
Carnival stock looks overvalued
From an investment perspective, Carnival shares trade at a steep price-sales ratio of 29.94. Therefore, the stock may not be an ideal option for bargain hunters.
In addition, analysts expect its earnings to remain volatile in the foreseeable future, with a forecast decline of more than 405% this year and a spike of 105% next year.
Therefore, it may be best to monitor the performance before buying the stock.
Source – TradingView
Technically, Carnival shares seem to be trading within a gently ascending channel formation after establishing solid support at around $17.60. As a result, the stock has recovered from oversold conditions, creating an opportunity for significant upward movement.
However, given the current valuation of Carnival shares, investors may wait to see if the uptrend continues above the immediate resistance at $19.83. Therefore, they could target extended gains at about $21.06, or anticipate a potential crash at about $16.35.
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