Cruise operator Royal Caribbean’s (RCL) shares surged in price last week after Pfizer The company shared encouraging results with its COVID-19 oral antiviral therapy candidate. It was shown to decrease the likelihood of hospitalization and death by 89%. Over the past five trading days, however, RCL stock dropped 8.2%. RCL currently trades at an expensive valuation. Is it worth placing bets on the stock? Keep reading. Royal Caribbean Cruises Ltd. is based out of Miami, Fla. and owns three cruise brand global brands: Silversea Cruises, Celebrity Cruises and Royal Caribbean International. There are approximately 58 ships under its brands, and 15 additional vessels on order. Its stock has gained 20.4% in price over the past year and 18.8% year-to-date to close yesterday’s trading session at $86.30. The shares currently trade below their 50-day moving mean. RCL’s share price has fallen 8.2% over the last five days.

Last year, the company suffered massive losses due to restrictions on travel related to pandemics. But recently announced positive data from Pfizer Inc. (NYSE:) for its COVID-19 oral antiviral treatment candidate, which was found to reduce the risk of hospitalization or death by 89%, buoyed investors’ optimism about the recovery of the cruise industry. RCL shares gained after the announcement. If the drug works, it will reduce the number of deaths. This should help RCL and other cruise lines to rebound.

Company expects to be able generate positive cash flow in spring, and will continue to make profits for 2022. There are still operational problems and there is a possibility that new viruses could emerge. Commercialization of Pfizer’s drug will take some time. RCL is also overvalued, given its fundamentals. RCL has a 2.62 beta which makes it highly volatile.

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