Six Flags Reports Worse-Than-Feared Quarterly Loss On Weak Attendance

Six Flags Entertainment Corp posted a wider-than-expected loss in the fourth quarter, as the world’s largest regional theme park company’s revenues plunged 58% year-over-year on restrictions due to the pandemic. Shares surged 4.6% to close at $45.50 on Feb. 24.

Six Flags (SIX) incurred a loss of $1.00 per share in 4Q, compared to the $0.89 loss per share estimated by analysts. Total sales generated in the quarter amounted to $109 million, topping analysts’ expectations of $86.59 million.

The total attendance in 4Q was 2.2 million guests, down 65.5% year-over-year. The company’s adjusted EBITDA was a loss of $39 million, compared to income of $72 million in the prior-year period.

Six Flags CEO Mike Spanos said, “Our focus is to open all of our parks for the 2021 season and be prepared to satisfy the pent-up demand we anticipate for outdoor entertainment close to home.”

“We continue to make progress on our transformation plan to modernize the guest experience and operate as a more efficient company, enabled by technology,” Spanos added. (See Six Flags stock analysis on TipRanks)

Following the 4Q results, Berenberg Bank analyst Alex Maroccia reiterated a Hold rating and a price target of $25 (45.1% downside potential) on the stock. “Regardless of the company’s disrupted operations throughout 2020,” the analyst believes “the scheduled park openings, current COVID-19 vaccine rollout, and business transformation plan could all result in more stable and efficient operations during the 2021 operating season.”

The rest of the Street is cautiously optimistic about the stock with a Moderate Buy consensus rating. That’s based on 3 Buys and 3 Holds. The average analyst price target of $38.40 implies 15.6% downside potential to current levels. Shares have increased almost 40% over the past three months.

TipRanks’ Hedge Fund Trading Activity tool shows that confidence in Six Flags is currently Positive as hedge funds increased their cumulative holdings of the stock by 279,000 shares in the last quarter.

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