United Parks & Resorts Inc. (PRKS): A Bull Case Theory

Core Thesis - United Parks & Resorts Inc. (PRKS) presents a bullish investment opportunity due to its resilient cash flows and significant real estate holdings despite facing challenges in park attendance and stock performance [1][5]. Company Overview - United Parks & Resorts Inc. operates theme parks and entertainment venues in the U.S., including SeaWorld parks in Orlando and San Antonio [2]. - The company has experienced a 40% decline in stock price year-to-date, primarily due to a softer summer season rather than fundamental business issues [2]. Financial Performance - Park attendance has slightly declined, but visitors who attended spent more, partially offsetting revenue losses [3]. - Adjusted EBITDA decreased by 10.2% over the trailing twelve months, from $700 million to $630 million, due to management's discounting of tickets [3]. - Free cash flow has remained stable at around $400 million, supported by reduced capital expenditures [3]. Real Estate Holdings - The company owns over 2,000 acres of prime land, including 400 acres adjacent to existing parks, which presents a significant upside potential [4]. - Activist investor Hill Path, owning approximately 49% of the company, may advocate for monetizing these assets, potentially leading to a buyout [4]. Investment Opportunity - Current valuations suggest PRKS offers a compelling opportunity for investors to access resilient cash flows and substantial embedded real estate value [5]. - Multiple catalysts, including potential strategic outcomes driven by Hill Path, could lead to a material re-rating of the stock [5].