Norwegian Cruise Line Holdings (NCLH 1.08%) stock collapsed in afternoon trading Wednesday, falling 15% through 1:35 p.m. ET despite beating Wall Street analyst earnings targets earlier in the morning.

Heading into its first-quarter 2024 report, analysts had forecast Norwegian would earn $0.11 per share (adjusted for one-time items) on sales of just over $2.2 billion. Norwegian came close to the revenue target but didn't quite hit it, although its adjusted profit was $0.16 per share. Furthermore, management raised its guidance for the full year.

But apparently, it didn't raise it enough.

Norwegian Cruise Q1 earnings

Norwegian boasted 20% sales growth in Q1, on "strong demand" for cruise ship services, with "105.7%" of its available berths occupied in the quarter. (Like airlines, cruise companies routinely overbook, anticipating that some customers will cancel).

Earnings, as calculated according to generally accepted accounting principles (GAAP), weren't quite as strong as the company's adjusted number -- only $0.04 per share. Still, this was a big improvement over last year's Q1 loss of $0.38 per share.

Is Norwegian Cruise stock a sell?

Management predicts even more improvements going forward as bookings set new records, and the company controls its operating costs. Management didn't give a GAAP number for guidance but said "adjusted" earnings for the full year will be $1.32 per share, up $0.09 from past predictions and about $0.02 more than Wall Street expected.

Nearer term, Norwegian noted its Q2 earnings will be about $0.32 versus Wall Street's $0.31 prediction. That's a much smaller differential than the full-year projection, however, and implies that Norwegian hopes the back half of this year will provide most of its outperformance. Investors -- never a patient bunch -- may have hoped for a bigger "earnings beat" sooner and are punishing the stock for this reason.

Is that fair? Perhaps not. Still, at a valuation of 48.5 times earnings, the stock was priced for perfection before the news. The fact that Norwegian's report was great but not perfectly great is why it's going down today.