Voss Capital, LLC, an investment management company, released its third-quarter 2025 investor letter. A copy of the letter can be downloaded here. Voss Capital’s funds, Voss Value Fund, LP, and the Voss Value Offshore Fund, Ltd returned +5.0% and +4.9% to investors net of fees and expenses respectively, in the third quarter compared to a +12.4% return for the Russell 2000 Index, +12.6% return for the Russell 2000 Value Index, and +8.3% return for the S&P 500 Index. The Voss Value Master Fund’s total gross e ...

Core Viewpoint - Six Flags Entertainment Corporation (NYSE:FUN) is facing financial challenges and legal issues, but UBS has set a price target of $27, indicating a potential increase of approximately 89.56% from its current price of $12.83 [1][5]. Financial Performance - The current stock price of FUN is $12.83, reflecting a decrease of 5.17% with a change of $0.70. The stock has fluctuated between a low of $12.79 and a high of $13.98 today. Over the past year, the stock reached a high of $49.77 and a low of $12.79, indicating significant volatility [3][5]. - FUN has a market capitalization of approximately $1.3 billion, with a trading volume of 4,346,345 shares on the NYSE, showing active investor interest despite current challenges [4]. Legal Issues - A securities fraud class action lawsuit has been filed against Six Flags, claiming the company failed to disclose important information during its merger with Cedar Fair, L.P. on July 1, 2024. The lawsuit alleges that Six Flags has been underinvesting in its parks and operations for several years [2][5].

Financial Performance - United Parks & Resorts reported a revenue decline of 6.2% year over year, totaling $511.9 million, which fell short of the consensus estimate of $539.8 million [2] - Earnings per share were $1.61, which is 28.8% below the anticipated $2.26, indicating significant profitability issues [2] - The company experienced a drop in attendance, with 240,000 fewer visitors compared to the same period last year, contributing to the revenue shortfall [2] - Operating margin contracted to 29.6% from 36.8% in the prior year's quarter, reflecting worsening profitability [2] - Adjusted EBITDA also came in well below expectations, further highlighting financial challenges [2] Market Reaction - Shares of United Parks & Resorts fell 22.9% in the morning session following the earnings report, indicating a significant market reaction to the disappointing results [1] - The stock has shown volatility, with 10 moves greater than 5% over the last year, suggesting that this news has notably impacted market perception [4] - The stock is down 37.6% since the beginning of the year and is trading 40.4% below its 52-week high of $60.29 from December 2024 [6] Industry Context - The theme park sector, including United Parks & Resorts, is sensitive to international trade relations, particularly with China, which affects both manufacturing and consumer markets [5] - A favorable trade agreement could potentially lower tariffs and boost sales, impacting revenues and profitability positively for companies in this sector [5]

Core Insights - United Parks & Resorts reported quarterly earnings of $1.61 per share, missing the Zacks Consensus Estimate of $2.24 per share, and down from $2.08 per share a year ago, representing an earnings surprise of -28.13% [1] - The company posted revenues of $511.85 million for the quarter ended September 2025, missing the Zacks Consensus Estimate by 5.11% and down from $545.9 million year-over-year [2] - The stock has underperformed the market, losing about 17.7% since the beginning of the year compared to the S&P 500's gain of 15.6% [3] Earnings Outlook - The current consensus EPS estimate for the upcoming quarter is $0.71 on revenues of $387.2 million, and for the current fiscal year, it is $4.04 on revenues of $1.7 billion [7] - The estimate revisions trend for United Parks & Resorts was mixed ahead of the earnings release, resulting in a Zacks Rank 3 (Hold) for the stock, indicating expected performance in line with the market [6] Industry Context - The Leisure and Recreation Services industry, to which United Parks & Resorts belongs, is currently in the top 28% of over 250 Zacks industries, suggesting a favorable outlook compared to the bottom 50% [8] - Empirical research indicates a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can impact investor decisions [5]

Core Insights - JANA Partners has partnered with NFL star Travis Kelce and other executives to invest in Six Flags Entertainment Corporation, aiming to enhance the theme park experience and potentially increase shareholder value [1][6][7] Investment Details - The investment group will collectively hold an economic interest of approximately 9%, valued at around $200 million, making them significant shareholders in a company estimated to be worth $2.2 billion [2] Leadership and Experience - Glenn Murphy, with a 30-year background in strategic leadership at major brands like Gap, Inc., and Dave Habiger, former President and CEO of J.D. Power, are part of the investment team, bringing extensive experience to the initiative [9] Strategic Goals - JANA Partners intends to implement substantial changes at Six Flags, focusing on improved marketing and customer experience, as well as exploring potential sale options to enhance share price, which has suffered due to adverse weather and declining park visits [6][7] Personal Connection - Travis Kelce expressed a personal connection to Six Flags, highlighting his lifelong enjoyment of the parks and his desire to contribute to their future [5][10]

Industry Overview - The Zacks Leisure and Recreation Services industry is experiencing growth due to optimized business processes, partnerships, and digital initiatives, with strong demand for concerts and cruise bookings supporting the sector [1][3] - The industry includes various recreation providers such as cruise operators, theme parks, and entertainment venues, thriving on economic growth and consumer demand driven by a healthy labor market and rising disposable income [2] Key Trends - The cruise industry is seeing robust demand, with strong booking volumes particularly in North America and Europe, leading to solid pricing and onboard spending [3] - Theme parks are benefiting from increased visitation and consumer spending, enhanced by technology integration like augmented and virtual reality, while live entertainment is experiencing a surge in ticket sales due to pent-up demand [4] - Easing trade tensions between the U.S. and China have improved investor sentiment, contributing to optimism about the economy and potential trade agreements [5] Industry Performance - The Zacks Leisure and Recreation Services industry ranks 87, placing it in the top 36% of 245 Zacks industries, indicating positive near-term prospects [6][7] - Despite this, the industry has underperformed the S&P 500, gaining 10.7% over the past year compared to the S&P 500's 12% and the broader sector's 18.4% [9][10] Valuation Metrics - The industry trades at a forward 12-month EV/EBITDA ratio of 60.75X, significantly higher than the S&P 500's 24.69X and the sector's 16.38X, with historical trading ranges between 18.33X and 66.92X [13] Company Highlights - Carnival Corporation is benefiting from strong demand, increased booking volumes, and higher onboard revenues, with a projected sales growth of 4.2% and earnings growth of 30.3% for fiscal 2025 [16][17] - Pursuit Attractions and Hospitality has shown a 9% year-over-year growth in ticket prices and lodging revenue, supported by healthy advance bookings [21] - The Marcus Corporation is optimistic about its film lineup and hotel segment resilience, with expected sales growth of 5.2% and a remarkable 264% increase in earnings for 2025 [23]

Group 1: Earnings Performance - United Parks & Resorts reported a quarterly loss of $0.29 per share, which was worse than the Zacks Consensus Estimate of a loss of $0.23, and compared to a loss of $0.17 per share a year ago, indicating a significant earnings surprise of -26.09% [1] - The company posted revenues of $286.95 million for the quarter ended March 2025, missing the Zacks Consensus Estimate by 2.37%, and down from $297.42 million in the same quarter last year [2] - Over the last four quarters, the company has not surpassed consensus EPS estimates and has topped revenue estimates only once [2] Group 2: Stock Performance and Outlook - United Parks & Resorts shares have declined approximately 16% since the beginning of the year, contrasting with the S&P 500's decline of -3.8% [3] - The current consensus EPS estimate for the upcoming quarter is $1.69 on revenues of $500.75 million, and for the current fiscal year, it is $4.36 on revenues of $1.73 billion [7] - The estimate revisions trend for United Parks & Resorts is currently unfavorable, resulting in a Zacks Rank 4 (Sell), indicating expected underperformance in the near future [6] Group 3: Industry Context - The Leisure and Recreation Services industry, to which United Parks & Resorts belongs, is currently ranked in the bottom 35% of over 250 Zacks industries, suggesting a challenging environment for stock performance [8] - Empirical research indicates a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can impact investor sentiment and stock performance [5]