Best Stock to Buy Right Now: Carnival vs. Roblox

Carnival (CCL) has completed a significant post-pandemic recovery, with 2024 revenue surpassing pre-pandemic levels at $25 billion and the company returning to profitability with a $1.9 billion net profit, while actively reducing its substantial debt; analysts forecast a 24% EPS CAGR through 2027, valuing the stock at 11x next year's earnings. Conversely, Roblox (RBLX), despite strong pandemic-era growth and a recent resurgence in bookings (up 24% in 2024) and daily active users (85.3 million), is projected to remain unprofitable due to high expansion costs, with its stock trading at 9x next year's bookings.

Analysis

Carnival (CCL) has achieved a robust post-pandemic recovery, with fiscal 2024 revenue reaching $25 billion, exceeding 2019 levels, and returning to profitability with a $1.9 billion net profit. The company significantly reduced its year-end debt from $33.2 billion in 2021 to $27.5 billion in 2024, supported by refinancing. Analysts project a 24% EPS compound annual growth rate (CAGR) from 2024 to 2027, driven by strategic expansions and fleet additions.

Roblox (RBLX) saw strong pandemic-era growth, with 2021 bookings up 45% and DAUs increasing 40%, followed by a 2022 slowdown. It has since regained momentum, reporting a 24% bookings surge in 2024 and DAUs reaching 85.3 million, with analysts forecasting a 31% bookings CAGR through 2027.

Despite this growth, Roblox is expected to remain unprofitable due to high infrastructure and operational costs, trading at 9 times next year's bookings. In contrast, Carnival's established profitability and lower valuation of 11 times next year's earnings, despite slower growth, present a more stable investment profile. The overall market sentiment is mildly positive with a cautious tone, reflecting these differing risk-reward profiles.

Key Decisions for Investors

• Investors should consider Carnival (CCL) for its established profitability, successful debt reduction, and attractive valuation at 11 times next year's earnings, despite potential macro headwinds.
• For Roblox (RBLX), investors should weigh its strong bookings growth and increasing user base against its persistent unprofitability and higher valuation at 9 times next year's bookings, monitoring its path to sustainable earnings.
• Given the current market's frothy conditions, a focus on profitable companies with reasonable valuations, such as Carnival, may offer a more prudent investment approach.