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1. Company Snapshot

1.a. Company Description

Six Flags Entertainment Corporation owns and operates regional theme and waterparks under the Six Flags name.Its parks offer various thrill rides, water attractions, themed areas, concerts and shows, restaurants, game venues, and retail outlets.The company also sells food, beverages, merchandise, and other products and services within its parks.


As of February 28, 2022, the company operated 27 parks in the United States, Mexico, and Canada.The company was formerly known as Six Flags, Inc.and changed its name to Six Flags Entertainment Corporation in April 2010.


Six Flags Entertainment Corporation was founded in 1961 and is based in Arlington, Texas.

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1.b. Last Insights on SIX

Positive drivers behind Six Flags Entertainment Corporation's recent momentum include the successful merger with Cedar Fair, creating a combined entity trading under the ticker "FUN". The merger is expected to bring cost synergies and management expertise to aid the legacy Six Flags' weakness. Additionally, the company unveiled an exciting lineup of park investments for 2025, which should drive growth and profitability. The merger also implies a yield of over 5% with the payment of a special dividend, making the stock more attractive to income investors.

1.c. Company Highlights

2. Six Flags Q1 2025 Earnings: Resilient Demand Amid Integration Progress

Six Flags Entertainment Corporation reported its Q1 2025 earnings, revealing a mixed picture of financial performance. The company generated $1.1 billion in revenue, marking a 6% year-over-year increase, driven by strong demand for new rides and improving guest satisfaction. However, the earnings per share (EPS) came in at $0.25, significantly below the consensus estimate of $0.64, reflecting higher operational costs and integration expenses. The adjusted EBITDA for the quarter was $280 million, up 4% from the prior year, supported by cost synergies from the merger. Management maintained its full-year adjusted EBITDA guidance of $1.08-1.12 billion, underscoring confidence in their strategic initiatives.

Publication Date: May -08

📋 Highlights
  • Merger Integration Synergies: - $120 million in synergies expected by year-end, with an additional $60 million in savings anticipated in 2026.
  • Attendance and Revenue Trends: - April attendance up 1%, with normalized attendance up 8%; first-quarter revenue tracking at 6% of full-year totals.
  • Full-Year EBITDA Guidance: - Maintained adjusted EBITDA guidance of $1.08-1.12 billion despite weather and event shift impacts.
  • Cost Reduction and Pricing: - On track to reduce costs by over 3%, with pricing discipline maintained and dynamic pricing strategies avoiding discounts.
  • Capital Expenditures: - $140 million spent on CapEx in Q1, part of a $1 billion allocation for 2025 and 2026, with 30% of expenditures discretionary.

Operational Highlights and Cost Management

The company highlighted progress in its merger integration, with $120 million in cost synergies realized and an additional $60 million expected by the end of 2026. CEO Richard Zimmerman emphasized the strategic closure of underperforming parks, such as Six Flags Maryland, to focus on high-margin locations. Despite weather-related challenges in April, which impacted attendance, the company saw encouraging trends, with April attendance rising 1% and season pass sales narrowing the gap to prior-year levels. Brian Witherow, CFO, noted, "Normalized attendance would have been up 8%, reflecting strong underlying demand." The company remains on track to reduce costs by over 3% this year, with a focus on organizational restructuring and vendor negotiations.

Valuation and Financial Position

From a valuation perspective, Six Flags trades at a forward P/E ratio of -14.95, reflecting the current earnings challenges, while the EV/EBITDA ratio of 14.58 indicates a premium for its growth prospects. The company’s balance sheet remains strong, with $62 million in cash and $179 million of revolver capacity, providing flexibility for its capital allocation strategy. The dividend yield of 0.87% offers some income appeal, though the focus remains on debt reduction and operational efficiency.

Strategic Initiatives and Outlook

The company is making strides in portfolio optimization, with plans to sell excess land near King's Dominion and other properties to enhance shareholder value. Capital expenditures were $140 million in Q1, part of a disciplined $1 billion allocation for 2025 and 2026. About 30% of these expenditures are discretionary, allowing the company to adjust spending based on macroeconomic conditions. Management expressed optimism about operating all 42 parks in 2025, with a focus on high-margin days during the second and third quarters. The Boysenberry Festival and improved food and beverage sales, particularly in adult beverages, are expected to drive further growth.

Long-Term Strategy and Investor Confidence

Richard Zimmerman highlighted the company’s ability to reset its cost base and improve margins through integration efforts. The unification of the season pass strategy and enhanced pricing discipline are key focus areas, with pass sales showing mid-single-digit growth in April. Despite economic uncertainty, the company noted stable consumer behavior, with e-commerce volumes up 1% and pricing up mid-single-digits. Management is confident in its ability to achieve full-year targets, supported by strong demand and operational efficiency. Further details on the long-term strategy and deleveraging plans will be shared at the upcoming Investor Day.

3. NewsRoom

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Deadline Alert: Six Flags Entertainment Corporation (FUN) Shareholders Who Lost Money Urged To Contact Glancy Prongay & Murray LLP About Securities Fraud Lawsuit

Dec -03

Source: globenewswire.com

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Robbins Geller Rudman & Dowd LLP Announces that Six Flags Entertainment Corporation f/k/a CopperSteel HoldCo, Inc. (FUN) Investors with Substantial Losses Have Opportunity to Lead Investor Class Action Lawsuit

Dec -03

Source: prnewswire.com

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FUN Investors Have Opportunity to Lead Six Flags Entertainment Corporation Securities Fraud Lawsuit with the Schall Law Firm

Dec -02

Source: globenewswire.com

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FUN Investors Have Opportunity to Lead Six Flags Entertainment Corporation Securities Fraud Lawsuit with the Schall Law Firm

Nov -28

Source: globenewswire.com

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Six Flags Entertainment Corporation f/k/a CopperSteel HoldCo, Inc. (FUN) Investors with Substantial Losses Have Opportunity to Lead Class Action Lawsuit

Nov -25

Source: newsfilecorp.com

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Accesso Technology Group: Broker reassured as Six Flags' new boss turns to a known quantity

Nov -25

Source: proactiveinvestors.co.uk

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FUN Investors Have Opportunity to Lead Six Flags Entertainment Corporation Securities Fraud Lawsuit with the Schall Law Firm

Nov -25

Source: globenewswire.com

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JANA PARTNERS APPLAUDS SIX FLAGS' CEO HIRE AND PROVIDES UPDATE ON INVESTOR GROUP

Nov -24

Source: prnewswire.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (3.66%)

6. Segments

Park Admissions

Expected Growth: 3.5%

The 3.5% growth in Park Admissions from Six Flags Entertainment Corporation is driven by increasing consumer spending on experiential activities, successful execution of pricing strategies, and investments in new attractions and technologies. Additionally, effective marketing campaigns and loyalty programs have contributed to higher attendance rates and per capita spending.

Park Food, Merchandise and Other

Expected Growth: 3.8%

Park Food growth driven by increased in-park spending, enhanced menu offerings, and strategic pricing. Merchandise growth fueled by new product lines, improved retail operations, and higher per-capita spending. Other revenue growth attributed to increased sponsorship and advertising sales, as well as growth in our events business.

Sponsorship, International Agreements and Accommodations

Expected Growth: 4.2%

Six Flags Entertainment Corporation's 4.2% growth is driven by increased sponsorship deals with prominent brands, strategic international agreements expanding its global footprint, and upgraded accommodations enhancing the overall customer experience, resulting in higher revenue and attendance.

7. Detailed Products

Theme Park Admissions

General admission tickets to access Six Flags theme parks, including access to rides, shows, and attractions.

Season Passes

Annual passes granting unlimited access to Six Flags theme parks for a year, with options for add-ons like parking and dining plans.

Membership Program

A monthly subscription-based program offering perks like unlimited visits, free parking, and discounts on food and merchandise.

Catered Events and Group Outings

Customizable event packages for groups, including catering, private areas, and activities.

Cabana Rentals

Luxury cabanas offering VIP amenities like food and beverage service, private seating, and personalized concierge.

Dining and Merchandise

Food, beverages, and souvenirs available throughout Six Flags theme parks.

8. Six Flags Entertainment Corporation's Porter Forces

Forces Ranking

Threat Of Substitutes

The threat of substitutes for Six Flags Entertainment Corporation is medium. While there are some substitutes for theme parks, such as beaches, museums, and other recreational activities, they are not perfect substitutes. The unique experiences and attractions offered by Six Flags theme parks make them difficult to replace.

Bargaining Power Of Customers

The bargaining power of customers for Six Flags Entertainment Corporation is low. Individual customers have limited bargaining power, and the company has a large customer base, which reduces the impact of individual customer decisions.

Bargaining Power Of Suppliers

The bargaining power of suppliers for Six Flags Entertainment Corporation is low. The company has a diverse supplier base, and no single supplier has significant bargaining power. Additionally, the company's large scale of operations gives it negotiating power over its suppliers.

Threat Of New Entrants

The threat of new entrants for Six Flags Entertainment Corporation is low. The theme park industry has high barriers to entry, including significant capital requirements, regulatory hurdles, and the need for specialized expertise. These barriers make it difficult for new entrants to join the market.

Intensity Of Rivalry

The intensity of rivalry for Six Flags Entertainment Corporation is high. The theme park industry is highly competitive, with several large players competing for market share. The company faces intense competition from other theme park operators, such as Disney, Universal, and Cedar Fair.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 0.00%
Debt Cost 7.70%
Equity Weight 100.00%
Equity Cost 14.95%
WACC 14.95%
Leverage 0.00%

11. Quality Control: Six Flags Entertainment Corporation passed 2 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

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Hasbro

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Value: 5.7

Growth: 3.0

Quality: 4.1

Yield: 8.0

Momentum: 6.0

Volatility: 7.0

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A-Score: 5.3/10

Value: 7.6

Growth: 6.9

Quality: 6.3

Yield: 0.0

Momentum: 6.0

Volatility: 5.3

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A-Score: 5.1/10

Value: 3.3

Growth: 6.7

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YETI

A-Score: 4.6/10

Value: 5.1

Growth: 8.1

Quality: 7.6

Yield: 0.0

Momentum: 2.5

Volatility: 4.0

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A-Score: 4.4/10

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Growth: 5.1

Quality: 6.3

Yield: 0.0

Momentum: 3.5

Volatility: 5.3

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Six Flags

A-Score: 3.6/10

Value: 7.5

Growth: 2.2

Quality: 3.4

Yield: 1.0

Momentum: 5.0

Volatility: 2.3

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

32.0$

Current Price

32$

Potential

-0.00%

Expected Cash-Flows