Amusement-parks operator Six Flags Entertainment Corporation (NYSE: SIX) recently posted better-than-expected results for the first quarter ended April 3, 2022. The robust results were on the back of both revenue and earnings surpassing estimates.
However, following the earnings, shares of the company declined 4.7% in yesterday’s trading session. Nonetheless, it has recovered most of those losses today, so far, as the stock is up 5%.
Revenue & Earnings
Six Flags reported quarterly revenues of $138.1 million, up 68% from the previous year. Further, the figure outpaced the consensus estimate of $122.3 million. Year-over-year growth of 64.6% and 73.8% witnessed in key revenue segments of Park Admissions and Park Food, Merchandise and Other to $73 million and $54.3 million drove the overall growth in revenues for the company.
The company reported a loss per share of $0.76, narrower than the previous year’s figure of a loss of $1.12 per share and the consensus estimate of a loss per share of $1.04.
Other Operating Metrics
Attendance improved 25% from the previous year to 1.7 million. Further, total guest spending per capita rose 34% from the prior year to $75.46.
Notably, the adjusted EBITDA loss also narrowed from $46 million in the previous year to $16 million.
Management Commentary
The CEO of Six Flags, Selim Bassoul, stated, “Six Flags has been quickly executing to improve the guest experience, improving ride throughput by increasing ride uptime and implementing single rider lanes on busy days; improving staffing and training of our team members; upgrading our park appearance, including our front gates, restrooms, and restaurants; providing better food quality; and offering more guest amenities such as benches, shade structures, and children’s areas.”
Wall Street’s Take
Turning to Wall Street, Six Flags Entertainment earns a Strong Buy consensus rating based on eight Buys and one Hold. The average Six Flags price target of $48.67 implies upside potential of 64.3% from current levels. Shares have declined 31.3% over the past year.
Hedge Funds Confidence
Overall, the TipRanks’ Hedge Fund Trading Activity tool shows that hedge fund confidence in Six Flags is currently Very Positive. Moreover, the cumulative change in holdings across the eight hedge funds that were active in the last quarter was an increase of 616,300 shares.
Conclusion
Six Flags’ robust quarterly results give it a strong base to grow its operations in a sustainable manner. Further, the reopening of the economy also bodes well for the company, which can be gauged by the rise in footfall witnessed.
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