Core Viewpoint - Six Flags Entertainment may undergo significant changes driven by activist investor Land & Buildings Investment Management, which has proposed monetizing the company's extensive land portfolio, potentially through a real estate investment trust (REIT) spin-out or outright sales [1][2][4]. Group 1: Activist Investor Influence - Land & Buildings has previously urged Six Flags to leverage its property value, indicating that the company's stock could increase by 50% following such actions [4]. - The activist investor claims that with Six Flags' current valuation near all-time lows, there is a compelling opportunity for a rerating, suggesting an immediate upside of over 75% based on 2026 consensus estimates [5]. - The potential upside could reach as high as 130% if 2026 EBITDA recovers to $1.1 billion, which aligns with the company's original 2025 guidance [5]. Group 2: Stakeholder Dynamics - Land & Buildings holds a small stake of approximately 2% in Six Flags, which may limit its ability to effect change independently; however, effective activism often involves rallying other shareholders to support proposed changes [6]. - The ideas presented by the activist investor regarding unlocking real estate value appear to resonate with shareholders, indicating potential for real change within the company [6].

Company Overview - Six Flags Entertainment has experienced a significant decline in share price, falling over 50% in 2025, with a notable drop of about 46% in the last year, particularly in the last six months [1][3][4] - The company operates a combined unit with Cedar Fair, managing approximately 42 parks, including theme parks, amusement parks, and water parks, primarily in the United States [3] Financial Performance - Six Flags reported a loss of approximately $470 million last year, with around $340 million attributed to interest on its debt [8] - The company's market capitalization is around $2.1 billion, while it carries about $5.5 billion in debt, indicating significant financial strain [7][8] Activist Investor Involvement - Activist investor Land and Buildings has urged Six Flags to spin off or sell its real estate assets, suggesting that this could unlock value and help mitigate debt concerns [6][9] - The proposal involves creating a real estate investment trust (REIT) for the property assets, allowing Six Flags to lease back the properties and focus on core business operations [7][9] Market Expectations - Analysts have set a median target price of $31 for Six Flags, with a high target of $43 and a low target of $23, indicating that the stock is currently trading below the low target [14] - Consensus estimates suggest that the company is expected to lose 91 cents per share this year but is projected to earn a profit of 78 cents per share next year, indicating potential for a turnaround [15]

Core Viewpoint - Land & Buildings Investment Management believes that monetizing Six Flags' real estate while simultaneously driving an operational turnaround could significantly increase the company's share price, potentially unlocking up to $6 billion in real estate value [1][3]. Group 1: Current Financial Situation - Six Flags' stock has dropped over 50% year-to-date, trading at a low EBITDA multiple of 7x due to merger challenges and poor weather conditions [2]. - The company is currently experiencing record short interest, indicating negative market sentiment [2]. Group 2: Strategic Recommendations - The company sees a generational opportunity to invest in Six Flags before a potential re-rating, emphasizing the importance of monetizing real estate to deliver immediate shareholder gains while allowing for operational recovery [3]. - A separation of the real estate and operating business (OpCo/PropCo) could unlock substantial value, with estimates suggesting a potential 75% upside based on 2026 consensus estimates [6]. Group 3: Historical Engagement and Performance - Previous engagement by Land & Buildings in December 2022 highlighted a potential 50% upside through real estate monetization, which led to a 45% increase in shares shortly after [4]. - Following the August 2023 engagement, the company noted that shares were trading at a 12.5% EBITDA yield, while real estate could trade at a 7.5-8% yield, indicating a significant valuation gap [5]. Group 4: Valuation Insights - The estimated net asset value per share is $39.26, compared to the current share price of $22.11, indicating a potential 78% upside [9]. - The real estate value is estimated at approximately $5.67 billion, with a significant portion of the real estate being REIT-able [9]. Group 5: Future Outlook - The company believes that the issues affecting earnings are mostly self-inflicted and transitory, suggesting a clear path for improved performance in the coming year [8]. - There is potential for multiple bidders interested in acquiring Six Flags' real estate, which could further enhance shareholder value [10].

Group 1 - Land & Buildings Investment Management holds approximately a 2% stake in the theme-park operator [1]

Core Insights - Six Flags Over Texas is set to unveil the Tormenta Rampaging Run roller coaster in 2026, which will break six world records, enhancing the park's appeal and changing the city's skyline [1][2][5]. Group 1: Roller Coaster Features - The Tormenta Rampaging Run will be the tallest dive coaster in the world, reaching a height of 309 feet [6]. - It will also be the fastest dive coaster, achieving speeds of 87 mph [6]. - The ride will span 4,199 feet, making it the longest dive coaster [6]. - It will feature the highest vertical loop at 179 feet [6]. - The coaster will include the highest Immelmann inversion at 218 feet [6]. - Riders will experience a record-breaking 95-degree beyond vertical drop of 285 feet [6]. Group 2: Themed Area and Dining Experience - The new attraction will be themed around the Spanish tradition of the running of the bulls, located in a new area called Rancho de la Tormenta [2][5]. - A new restaurant, Cocina Abuela, will offer a menu inspired by Spanish and Latin American culinary traditions, featuring dishes like Spanish rice and fresh guacamole [7]. Group 3: Company Milestones - The opening of the Tormenta Rampaging Run will coincide with the 65th anniversary of Six Flags Over Texas, marking a significant milestone for the park [8]. - The anniversary celebration will include exclusive previews, special events, and giveaways [8]. Group 4: Company Background - Six Flags Entertainment Corporation is the largest regional amusement-resort operator in North America, with 27 amusement parks and 15 water parks across 17 states [10]. - The company focuses on providing immersive and memorable experiences to millions of guests each year [10]. - Bolliger & Mabillard, the coaster's designers, are known for their innovation and quality in roller coaster design [10].

Core Insights - Six Flags Entertainment Corporation (NYSE:FUN) is recognized as one of the 11 Best Retirement Stocks to Buy According to Analysts, indicating strong investment potential [1] - UBS has reaffirmed a 'Buy' rating on Six Flags with a price target of $34, suggesting a potential upside of approximately 58.88% from the current trading price of about $21.40 [2] - Attendance at Six Flags parks increased by 3% year-over-year in August, exceeding both the company's own third-quarter estimate of 0.5% growth and Wall Street's consensus of 0.6% [3] Company Performance - Six Flags operates amusement parks, water parks, and resorts across the U.S., Mexico, and Canada, contributing to its recognition in the Best Retirement Portfolio [3] - The company reported a 2% increase in attendance over a nine-week period, marking an improvement from the 1% growth reported for the five-week period ending August 3 [3]

Core Thesis - Six Flags Entertainment Corporation (FUN) is viewed as a structurally weak business but presents an attractive risk/reward profile due to its current valuation [2][4] Valuation Metrics - As of September 12th, FUN's share price was $23.45, with trailing and forward P/E ratios of 17.57 and 51.81 respectively [1] - The company trades at an EV/Total Capital multiple of just 1x, compared to a historical range of 3-4x, indicating significant upside potential if sentiment or operations improve [3] Debt and Financial Structure - Despite daunting debt metrics, the company's maturities are well-structured, with the first significant maturity deferred until 2027 and a $1.4 billion bank loan not due until 2031 [3][4] Activist Involvement - Sachem Head, an activist hedge fund, has acquired a 4.8% stake in Six Flags, which historically signals potential operational or strategic changes that could unlock value [3][4] Market Sentiment - The current market discount reflects overly pessimistic expectations rather than structural insolvency, suggesting that the stock has limited downside and meaningful upside potential [4]

Company Overview - Six Flags Entertainment Corporation (NYSE: FUN) has reported concerning attendance trends in recent quarters, which have negatively impacted earnings despite post-merger synergies [1] - The company is significantly behind its 2028 targets, indicating a need for a shift in attendance trends, especially given its high debt levels [1] Investment Insights - The investment philosophy focuses on identifying mispriced securities by understanding the financial drivers of a company, often revealed through a DCF model valuation [1] - This approach allows for a comprehensive assessment of a stock's prospects, considering various investment styles beyond traditional value, dividend, or growth investing [1]

Core Insights - Six Flags Entertainment Corporation's shares increased following an update on improving summer traffic and strong demand for upcoming seasonal events [1][5] - The company reported welcoming 17.8 million guests over the nine weeks ending August 31, marking a 2% increase compared to the same period in 2024 [1][4] Attendance and Revenue - August attendance rose by 3%, equating to approximately 172,000 additional visits, with management maintaining full-year adjusted EBITDA guidance of $860 million to $910 million [2][3] - Preliminary revenue for the nine-week period was around $1.1 billion, reflecting a 2% year-over-year decline, primarily due to a 7% drop in admissions per capita [4] Strategic Initiatives - The company emphasized that the rebound in attendance aligns with 2025 expectations, driven by investments in new rides, food and beverage upgrades, and enhanced guest experiences [3] - Early sales of 2026 season passes are outpacing last year, with average pricing up about 3%, indicating strong interest in the all-park add-on [3] Financial Position - Reducing leverage remains a top priority for the company, which noted no near-term debt maturities or covenant pressures, allowing flexibility for strategic investments [5]

Core Insights - Six Flags Entertainment Corporation reported an increase in summer traffic and strong demand for upcoming Halloween and winter holiday periods, with shares climbing 7.79% to $23.46 [5] - The company welcomed 17.8 million guests over the nine weeks ending August 31, marking a 2% increase compared to the same period in 2024 [1][4] - August attendance rose by 3%, equating to approximately 172,000 additional visits, and the company reaffirmed its full-year adjusted EBITDA guidance of $860 million to $910 million [2] Attendance and Revenue - Preliminary revenue for the nine-week period was approximately $1.1 billion, reflecting a 2% year-over-year decline, primarily due to a 7% drop in admissions per capita [4] - The decline in admissions was attributed to promotional initiatives aimed at increasing volume, which was partially offset by a modest increase in in-park spending on food, merchandise, and games [4] Future Outlook and Strategic Initiatives - The company anticipates a rebound in traffic and per-capita spending due to high-margin fall events, with early sales of 2026 season passes exceeding last year's pace and average pricing up about 3% [3] - Management emphasized targeted investments in new rides, upgrades to food and beverage offerings, and improved guest experience as key drivers for future growth [3] - Reducing leverage remains a top priority, with no near-term debt maturities or covenant pressures, allowing the company to fund strategic investments while pursuing cost-saving targets [5]