SIX - Embedded Expectations Analysis - 2021 04 23
Six Flags Entertainment Corporation (SIX:USA) currently trades near historical highs relative to UAFRS-based (Uniform) assets, with a 3.8x Uniform P/B. At these levels, the market is pricing in expectations for profitability to inflect positively, but management may have concerns about Active Pass Base sales and memberships, the execution of their transformation initiatives, and the sustainability of Drive-Thru Safari demandSpecifically, management may lack confidence in their ability to improve Active Pass Base season sales and memberships, execute their transformation initiatives, and sustain per capita revenue and admissions growth from core park memberships. Moreover, they may be exaggerating the uniqueness of their offerings and the loyalty of their customer following, and they may have concerns about the sustainability of Drive-Thru Safari demand and attendance improvements across open parks. Furthermore, management may lack confidence in their ability to improve their core services and tailor offerings and experiences based on customer preferences
Six Flags Entertainment is a theme park operator and also an operator of waterparks. The company's parks provide a selection of thrill rides, water attractions, themed areas, concerts and shows, restaurants, game venues and retail outlets. The company holds licenses for theme park usage of certain Warner Bros. and DC Comics characters throughout the U.S. (except the Las Vegas metropolitan area), Canada, Mexico and other countries. The company's licenses include the right to sell merchandise featuring the characters at the parks, and to use the characters in its advertising, as walk-around characters and in theming for rides, attractions and retail outlets.
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