Six Flags Entertainment (FUN) Valuation After US$1b Debt Refinancing And Prolonged Maturities

Six Flags Entertainment (FUN) just lately accomplished a non-public providing of US$1b in 8.625% senior notes due 2032, utilizing the proceeds to redeem its current 2027 notes and to increase its debt maturity profile.

See our newest evaluation for Six Flags Entertainment.

The refinancing information comes after a pointy 30 day share value return of 16.25% that partly offsets a 90 day share value return decline of 33.35%. However, the 1 yr complete shareholder return decline of 61.75% reveals that long run traders have nonetheless confronted important losses, so latest momentum seems extra like a brief time period rebound than a sustained upswing.

If this refinancing has you excited about how different leisure associated names are positioned, it could possibly be second to widen your search with auto producers and examine completely different client dealing with cycles.

With Six Flags shares down 61.75% over the previous yr, but buying and selling at a forty five.76% low cost to analyst targets and a 70.41% hole to 1 intrinsic worth estimate, you must ask: is that this a reset shopping for alternative, or is the market already pricing in any future development?

Most Popular Narrative: 31.4% Undervalued

Six Flags Entertainment’s most adopted narrative locations truthful worth at $25.23 a share versus the latest $17.31 shut, framing a sizeable valuation hole that rests on particular earnings and margin expectations.

Consolidation synergies from the Cedar Fair merger, ongoing portfolio optimization, and aggressive price self-discipline (concentrating on $120M in everlasting annual financial savings) are anticipated to structurally decrease the fee base, elevating web margins and accelerating deleveraging by way of extra sturdy free money movement.

Read the whole narrative.

Want to see what sort of income path and margin rebuild sits behind that truthful worth, and the way earnings are projected to flip from loss to revenue, whereas the long run valuation a number of stays beneath many friends? The full narrative lays out the numbers and the commerce offs that get to $25.23.

Result: Fair Value of $25.23 (UNDERVALUED)

Have a learn of the narrative in full and perceive what’s behind the forecasts.

However, you continue to must weigh excessive leverage, with web debt at about US$5.3b, together with climate associated attendance swings that would hit income and margins.

Find out about the important thing dangers to this Six Flags Entertainment narrative.

Build Your Own Six Flags Entertainment Narrative

If you see the numbers in another way or just choose to check your personal assumptions in opposition to the info, you possibly can construct a customized thesis in minutes with Do it your means

A terrific start line on your Six Flags Entertainment analysis is our evaluation highlighting 3 key rewards and a pair of necessary warning indicators that would impression your funding determination.

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If you cease with one inventory, you miss the larger image. Let the info do the heavy lifting so you possibly can rapidly spot what really stands out.

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