SIX - Embedded Expectations Analysis - 2021 07 07
Six Flags Entertainment Corporation (SIX:USA) currently trades above corporate averages relative to UAFRS-based (Uniform) earnings, with a 23.9x Uniform P/E. At these levels, the market is pricing in expectations for profitability to inflect positively, but management may have concerns about labor shortages, park capacity constraints, and their Active Pass BaseSpecifically, management may have concerns about labor shortages due to immigration restrictions, park capacity constraints, and the sustainability of amusement park demand. Also, they may lack confidence in their ability to enforce the mask requirement for customers, control membership attrition rates, and sustain Active Pass Base growth through the upcoming operating season. In addition, they may be exaggerating the potential of their new ride and infrastructure investments as well as their other transformation initiatives with new food and beverage assortments and offerings. Furthermore, they may also have concerns about underpenetrated single-day ticket sales and the pace of the recovery of attendance to pre-pandemic levels. Finally, they may lack confidence in their ability to address wage rate pressures and achieve their EBITDA target
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.
In 2009, just as the dust was settling from the last major equity and credit market crises, we launched a boutique research firm with the intention of breaking Wall Street’s biases and broken incentives:
- GAAP and IFRS have failed to provide rules for reliable financial statement reporting
- Stock analyst recommendations are not grounded in disciplined financial analysis
- Credit agencies have been set up to grossly fail in their responsibilities to investors and the public markets
- Utter lack of willingness of major research firms to employ the the most advanced forensic analysis available
We sought to provide investors and company analysts with a source of information that changed all that.
Many years later, our business model remains because little has changed on Wall Street.
- Corporate credit ratings remain years behind the fundamental underpinnings of company performance
- Stock analysts continue to make recommendations with deeply inherent biases
- Research firms have failed to break down the walls between credit, equity, and macroeconomic research
- The governing accounting bodies have created more leeway for mis-estimates and mis-classifications as financials have become unwieldy and overwhelming
The integrity of Valens Research is founded in our disciplined processes and analytics. No “star” analysts. No corporate advisory relationships. No-nonsense opinions and recommendations.
Unfortunately, this report is not available for the investor type or country you selected.
Browse all ResearchPool reportsReport is subscription only.
Thank you, your report is ready.
Thank you, your report is ready.