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Category: Stock Market and Six Flags
Date: 15 October 2019 Stock Price: $49.71 We take a look at the 2nd quarter earnings report of their 2019 fiscal year of Six Flags, the worlds largest regional theme park company that runs and operates 26 parks across the United States, Mexico and Canada.
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About Six Flags
Six Flags Entertainment Corporation is the world’s largest regional theme park company with $1.5 billion in revenue and 26 parks across the United States, Mexico and Canada. For more than 58 years, Six Flags has entertained millions of families with world-class coasters, themed rides, thrilling water parks and unique attractions.
A Six Flags ride in one of their entertainment parks
Overview of Six Flags' latest earnings report
Data below refers to quarterly data unless specified otherwise:
- Total revenues: $477.210 million (up from $445.420 million for the same period of the previous year)
- Total revenues increased by 7.13% over the last 12 months
- Operating expenses: $178.348 million (up from $163.964 million for the same period of the previous year)
- Operating expenses increased by 8.7% over the last 12 months
- Net income: $99.896 million (up from $94.505 million for the same period of the previous year)
- Diluted earnings per share: $0.94 (up from $0.88 for the same period of the previous year)
- PE ratio of Six Flags: 13.8
- Diluted weighted-average shares outstanding: 84.868 million (down from 85.072 million for the same period of the previous year)
- Cash and cash equivalents: $113.798 million
- Cash and cash equivalents per share: $1.34
- Cash and cash equivalents makes up 2.69% of Six Flags' market capital
- Cash and cash equivalents makes up 3.87% of Six Flags' total assets
- Accounts receivable: $180.916 million
- Accounts receivable makes up 6.16% of Six Flag's total assets
- Goodwill: $659.618 million
- Goodwill per share: $7.72
- Goodwill makes up 22.44% of Six Flags' total assets
Six Flags' management commentary on the results
GRAND PRAIRIE, Texas--(BUSINESS WIRE)-- Six Flags Entertainment Corporation (NYSE: SIX), the world’s largest regional theme park company and the largest operator of waterparks in North America, today announced that revenue for the second quarter of 2019 increased $32 million or 7 percent from the second quarter of 2018 to $477 million.
“I am very pleased with our continued strong momentum, especially with the execution of our premium-priced membership program,” said Jim Reid-Anderson, Chairman, President and CEO. “I am confident 2019 will be the tenth consecutive record year for our shareholders as we continue to innovate and deliver on our five-pillar strategy to drive our business toward achieving our aspirational goal of $750 million of Modified EBITDA3 by 2021.”
Total guest spending per capita for the second quarter of 2019 was $42.27, a decrease of $0.36 or 1 percent compared to the second quarter of 2018. Admissions per capita decreased 2 percent to $24.03, and in-park spending per capita increased 1 percent to $18.24. The increase in per capita spending that would have resulted from ticket price gains and premium-priced membership sales was offset by lower per capita spending of the five domestic parks the company began operating on June 1, 2018, which had more operating days and attendance in the second quarter of 2019 than the prior year period; lower guest spending per capita at a sixth domestic park in Rockford, Illinois, which the company began operating in April 2019; and the dilutive impact of a higher mix of season pass and member attendance.
The company’s success in upgrading guests from single day tickets and season passes to premium-priced memberships resulted in the number of memberships in the Active Pass Base increasing more than 25 percent as of June 30, 2019, versus the comparable prior year period. Members are the company’s most loyal and valuable guests, with improved retention rates and higher revenue, especially from the premium tiers, compared to traditional season passes.
“I am very pleased with our continued strong momentum, especially with the execution of our premium-priced membership program,” said Jim Reid-Anderson, Chairman, President and CEO. “I am confident 2019 will be the tenth consecutive record year for our shareholders as we continue to innovate and deliver on our five-pillar strategy to drive our business toward achieving our aspirational goal of $750 million of Modified EBITDA3 by 2021.”
Total guest spending per capita for the second quarter of 2019 was $42.27, a decrease of $0.36 or 1 percent compared to the second quarter of 2018. Admissions per capita decreased 2 percent to $24.03, and in-park spending per capita increased 1 percent to $18.24. The increase in per capita spending that would have resulted from ticket price gains and premium-priced membership sales was offset by lower per capita spending of the five domestic parks the company began operating on June 1, 2018, which had more operating days and attendance in the second quarter of 2019 than the prior year period; lower guest spending per capita at a sixth domestic park in Rockford, Illinois, which the company began operating in April 2019; and the dilutive impact of a higher mix of season pass and member attendance.
The company’s success in upgrading guests from single day tickets and season passes to premium-priced memberships resulted in the number of memberships in the Active Pass Base increasing more than 25 percent as of June 30, 2019, versus the comparable prior year period. Members are the company’s most loyal and valuable guests, with improved retention rates and higher revenue, especially from the premium tiers, compared to traditional season passes.
Six Flags (NYSE: SIX) stock price history
The image below, obtained from Google, shows the stock price history of Six Flags over the last 5 years. And it's been a good time for Six Flags stockholders. 5 years ago the stock was trading at around $33.90 a stock and its currently trading at $49.71 a stock. That's a return of 46.6% returned to Six Flags stockholders over the last 5 years.
The stock of Six Flags is trading at a lot closer to its 52 week low of $46.68 than it is to its 52 week high of $69.45 which to us is an indication that the momentum and sentiment of Six Flags stock is negative at this point in time.
The stock of Six Flags is trading at a lot closer to its 52 week low of $46.68 than it is to its 52 week high of $69.45 which to us is an indication that the momentum and sentiment of Six Flags stock is negative at this point in time.
Six Flags (NYSE: SIX) stock price history over the last 5 years
Recent coverage of Six Flags
The extract below discusses the latest regarding Six Flag's potential takeover of Cedar Fair as obtained from TheStreet.com
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Cedar Fair (FUN - Get Report) shares jumped as much as 11% Wednesday after Reuters reported the company has received an acquisition proposal from fellow theme-park operator Six Flags Entertainment. (SIX - Get Report) .Citing people familiar with the matter, Reuters reported that Cedar Fair is considering a cash-and-stock offer from Six Flags.
The sources told Reuters that there's no certainty that a deal will be reached. Six Flags declined comment. Cedar Fair couldn't immediately be reached for comment. Cedar Fair shares climbed to an intraday high of $64.86, before pulling back. At last check the shares were up 2.4% to $59.60.
Read the full article here
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Cedar Fair (FUN - Get Report) shares jumped as much as 11% Wednesday after Reuters reported the company has received an acquisition proposal from fellow theme-park operator Six Flags Entertainment. (SIX - Get Report) .Citing people familiar with the matter, Reuters reported that Cedar Fair is considering a cash-and-stock offer from Six Flags.
The sources told Reuters that there's no certainty that a deal will be reached. Six Flags declined comment. Cedar Fair couldn't immediately be reached for comment. Cedar Fair shares climbed to an intraday high of $64.86, before pulling back. At last check the shares were up 2.4% to $59.60.
Read the full article here
Rides at one of Six Flags' entertainment venues
Six Flags (NYSE: SIX) latest stock valuation
So what is Six Flags stock worth based on the release of their latest earnings report? Based on Six Flags latest earnings report our valuation models provide a target (full value) price for Six Flags stock at $60.20 a stock. We therefore believe that the stock of Six Flags is undervalued.
We usually suggest that long term and fundamental investors get in at least 10% below our target (full value) price which in this case is $60.20 Therefore we believe a good entry point into Six Flags stock is at $54.80 or below. And since Six Flags is trading at below our suggested entry point into the stock we rate Six Flags as a buy.
The release of Six Flags 3rd quarter 2019 earnings report on the 22 October 2019 will in all likelihood be the driver of the Six Flags stock price movement in coming weeks and months, together with the potential news that Six Flags might be acquiring Cedar Fair (FUN)
We usually suggest that long term and fundamental investors get in at least 10% below our target (full value) price which in this case is $60.20 Therefore we believe a good entry point into Six Flags stock is at $54.80 or below. And since Six Flags is trading at below our suggested entry point into the stock we rate Six Flags as a buy.
The release of Six Flags 3rd quarter 2019 earnings report on the 22 October 2019 will in all likelihood be the driver of the Six Flags stock price movement in coming weeks and months, together with the potential news that Six Flags might be acquiring Cedar Fair (FUN)
Next earnings release date for Six Flags
It is expected that Six Flags (NYSE: SIX) 3rd quarter 2019 earnings report will be released on 22 October 2019.