Six Flags Entertainment Corporation/NEW (FUN): what the price requires
The current priced-in claim for Six Flags Entertainment Corporation/NEW (FUN) is temporarily suppressed because the live engine record is unavailable. The dated report remains a snapshot, not a current market read.
Generated: 2026-07-14 · Exported: 2026-07-16 · Source: https://boothcheck.com/report/FUN
Headline
| Field | Value |
|---|---|
| Ticker | FUN |
| Company | Six Flags Entertainment Corporation/NEW |
| Current price | $18.78/sh |
What The Price Requires (Inversion)
The assumption today's price embeds, recovered by inverting the valuation.
| Field | Value |
|---|---|
| Inversion basis | revenue-multiple |
| EV / sales paid | 2.8x |
| Steady-state operating margin assumed | 36.5% |
The price sits below what even a 5%/yr revenue decline would warrant; the inversion reports a bound, not a solved growth path.
The company earns no operating profit yet; the inversion runs on the revenue multiple and an assumed steady-state margin.
Solve inputs: computed at a 7% cost of capital with 4% terminal growth over a 5-year stage, holding a 36.5% terminal operating margin (91.3% gross margin x the 40% mature-conversion prior) (computed at the 7% minimum rate; the CAPM rate 5.1% sits below it).
How unusual the bet is: within-range (limited comparison data)
| Reference | Value |
|---|---|
| implied end-window share | 0% |
Valuation X-Ray
The price is justified by relative-multiple and growth-DCF; asset-based land below the price.
How the valuation models price the stock relative to the market price. Price/FV above 1.0 means the market pays more than that lens defends (expensive); at or below 1.0 the lens can defend the price.
| Family | Median price/FV | Models | Reads |
|---|---|---|---|
| Asset | 7.20x | 2 | expensive |
| Earnings | — | 0 | — |
| Relative | 0.31x | 2 | justifies |
| Growth | 1.09x | 3 | expensive |
Families that justify the price: Relative, Growth Families that call it expensive: Asset
The models below discount at their own flat-beta convention rates (cost of equity 9.3%, WACC 5.3%); the inversion above states its own rate.
Per-Model Detail (n=7)
| Model | Family | FV | Price/FV | Applicable | Methodology |
|---|---|---|---|---|---|
| DCF Perpetual Growth | Growth | — | — | no | — |
| DCF Exit Multiple | Growth | $20.67 | 0.91x | yes | Exit EV/EBITDA: 51.2x / 53.2x / 55.2x (bear / base = today's held flat / bull), 6yr |
| Relative Valuation | Relative | $61.56 | 0.31x | yes | P/S fallback (negative EPS): Sector P/S 2.0x × TTM revenue — excluded from consensus |
| Simple DDM | Growth | — | — | no | — |
| Two-Stage DDM | Growth | — | — | no | — |
| Simple Excess Return | Asset | $2.75 | 6.83x | yes | Book value floor: BV/sh $2.75, ROE negative |
| Two-Stage Excess Return | Asset | $2.48 | 7.57x | yes | Book value with convergence: BV/sh $2.75, ROE converges to ke |
| Discounted Future Market Cap | Growth | $10.92 | 1.72x | yes | Rev $3.1B, growth 17% (input: historical growth; tapered), Terminal P/S: 0.5x / 0.6x / 0.7x (bear / base = today's held flat / bull, cap 12x) |
| Peter Lynch Fair Value | Relative | $0.00 | — | no | Negative/zero EPS — earnings-based value floored at $0 |
| Margin Trajectory | Growth | $17.24 | 1.09x | yes | Margin ramp: -50% → 12% over 7yr, rev growth 17% (input: historical growth; tapered) |
| Earnings Power Value | Earnings | — | — | no | — |
| Residual Income | Asset | — | — | no | — |
| Graham Number | Asset | — | — | no | — |
| EV/EBITDA Relative | Relative | $0.01 | 1878.00x | yes | EBITDA $0.13B × sector EV/EBITDA 9.0x (excluded from median) |
| FCF Yield | Earnings | $0.01 | 1878.00x | yes | FCF $28.6M / Kₑ 9.3% — zero-growth perpetuity (excluded from median) |
| SBC-Adj FCF Yield | Earnings | — | — | no | — |
| Ben Graham Formula | Earnings | — | — | no | — |
| ROIC-Justified P/B | Asset | — | — | no | — |
| P/Sales Sector | Relative | $61.56 | 0.31x | yes | Revenue $3.12B × sector P/S 2.0x |
| PEG Fair Value | Relative | — | — | no | — |
| Earnings Yield | Earnings | — | — | no | — |
| Funds From Operations Multiple | Relative | — | — | no | — |
| Clinical Phase NPV | Growth | — | — | no | — |
| Merton | Asset | — | — | no | — |
| V5 Mechanical | — | — | — | no | — |
Solvency
| Field | Value |
|---|---|
| Net debt | $5.2b |
| Burning cash | no |
Operating profit is negative or near zero and the company has no demonstrated through-cycle (mid-cycle) operating margin to normalize against, so years-to-repay cannot be computed honestly.
Operating profit is negative or near zero and there is no demonstrated through-cycle (mid-cycle) operating margin to normalize against, so interest coverage cannot be computed honestly.
Bullet Takeaways
- The trailing operating margin near negative 44% is largely a merger accounting artifact (Cedar Fair and Six Flags combined in July 2024), not an empty-gates business; the parks ran early-2025 attendance up about 1% over a five-week window.
- At about $25 the price requires a margin near 36.5% over time, a steep normalization from a deeply negative base; only revenue-multiple and forward-margin models reach the price while asset frames land near $2.50 to $2.75.
- Net debt above $5 billion against a seasonal, discretionary-consumer business is the binding risk; the bull case rests on synergies reaching management's roughly $800 million free-cash-flow target by 2027.
Bull Case
Start with the scariest line in the file: Six Flags Entertainment is reporting a deeply negative operating margin, around negative 44% on a trailing basis, and net debt above $5 billion. On its face that looks like a distressed operator. The data argues otherwise, and the reason is the July 2024 merger of equals between Cedar Fair and legacy Six Flags. A combination of that size carries a heavy load of purchase-accounting amortization and one-time integration costs that swamp reported operating income while the underlying parks keep generating cash. The trailing loss is largely an accounting artifact of the deal, not a sign the gates are empty.
What the parks actually do is run a seasonal, cash-generative business with real pricing power. The combined company operates 41 parks and nine resorts, the largest regional amusement footprint in North America. Early-season 2025 attendance over a five-week window rose a little more than 1% to about 2.8 million visits, generating roughly $192 million in revenue, evidence that demand held through the integration. The FY2025 10-K frames strategic capital spending on new rides and attractions as a key element of revenue growth (FY2025 10-K, accession 0001999001-26-000048), the lever that drives repeat visitation and per-capita spending at established parks.
The bull case is a normalization story. Management is targeting roughly $800 million of free cash flow by 2027 as merger synergies land and integration costs roll off. If the combined portfolio converts its scale into the margins both predecessors ran historically, the current accounting loss inverts into substantial cash generation, and a roughly $25 stock against that cash-flow target is pricing skepticism rather than the realized synergy case. The bet is execution on cost capture and attendance, not a turnaround of a broken business.
Bear Case
The external variable with the most leverage on Six Flags is the discretionary consumer, and the price gives that exposure too little weight. A day at a regional amusement park is a postponable purchase. When household budgets tighten, when gas prices rise, or when a recession hits the middle-income families who make up the core gate, attendance and per-capita spending fall together. The FY2025 10-K is explicit that there may be a material adverse effect tied to the quality of food and entertainment and to factors outside the company's control (FY2025 10-K, accession 0001999001-26-000048), and weather alone can swing a season. Management itself has flagged macro headwinds including exchange-rate volatility and weather. This is a fixed-cost business: when revenue softens, the operating deleverage is brutal because the rides, staffing, and maintenance largely stay in place.
The balance sheet turns that operating sensitivity into real risk. Net debt sits above $5 billion, a heavy load against a business whose cash flow is seasonal and consumer-dependent. In a higher-for-longer rate world, refinancing that debt is more expensive, and the interest burden competes directly with the strategic capital spending the company needs to keep parks fresh. If a soft consumer year coincides with debt maturities, the company faces the worst combination: declining cash flow and rising financing cost.
The valuation has to lean almost entirely on a margin recovery that has not yet shown up. With negative trailing earnings, the earnings-based and asset-based models are not usable or land far below the price, and the asset-value frames imply the stock is expensive against a thin $2.75 book value per share. Only revenue-multiple and forward-margin approaches reach the price, and those require the company to ramp from a deeply negative margin toward double digits over several years. The price is a bet that synergies arrive on schedule and the consumer cooperates, with little cushion if either disappoints.
Valuation
Six Flags cannot be valued on current earnings because it does not have them: trailing operating margin is around negative 44%, distorted by merger-related purchase accounting and integration costs. The engine therefore prices the stock off revenue and a forward-margin path. Inverting the $24.93 price points to a required margin near 36.5% over a multi-year horizon, a steep climb from a deeply negative starting point that captures how much normalization the price already assumes.
The model X-ray reflects the same reality. The forward-looking methods reach the price: the exit-multiple DCF lands near $24 (on a high near-term EV/EBITDA that itself reflects the depressed earnings base), and the margin-trajectory model lands near $17 assuming a ramp from roughly negative 50% toward 12% over seven years with mid-teens revenue growth tapering. The revenue-multiple and P/S-sector methods land near $62 on a 2.0x sector multiple, well above the price, while the discounted-future-market-cap method lands near $15. Against those, the asset-based frames say expensive: excess-return models land near $2.50 to $2.75 off a thin book value, and earnings-power, residual-income, and Graham methods are not applicable with negative earnings. The blended landing across usable methods sits near $17.
The characterization is that the price is justified by relative multiples while asset-based frames say expensive. The peer set, RSI, DKNG, and LTH, is a loose comparison of leisure and experience operators rather than a clean amusement-park cohort, so peer multiples carry less weight than usual. The honest read is that the $25 price is a normalization wager: it works if merger synergies convert the accounting loss into the roughly $800 million of free cash flow management targets by 2027, and it is expensive on every backward-looking frame until that cash actually appears. Net debt above $5 billion is the reason the wager carries real downside if the ramp slips.
Catalysts
The defining event remains the July 2024 merger of equals that combined Cedar Fair and legacy Six Flags into the current Six Flags Entertainment Corporation, trading under FUN since July 2024. The integration is still the dominant driver: purchase-accounting amortization and one-time costs are suppressing reported margins, and the pace at which those roll off and synergies land determines when the accounting loss converts to cash.
The near-term markers are attendance and per-capita spending through the 2026 operating season, plus progress toward management's roughly $800 million free-cash-flow target by 2027. Early-season attendance trends and any updates on synergy capture are the key data points, since the valuation already assumes a multi-year margin ramp. Management has flagged exchange-rate volatility and weather as swing factors, and the discretionary-consumer backdrop is the macro variable to watch. Debt reduction and refinancing terms on the more than $5 billion net-debt load are the other items that matter for how much of the recovery flows to equity.
Sources: Six Flags / Cedar Fair merger completion and operating updates (SEC 8-K filings, Simply Wall St, Motley Fool, 2024 to 2026); FY2025 10-K (accession 0001999001-26-000048).
Peer Cohorts (Per Segment, With Filing Citations)
Amusement and Water Parks (single reportable segment) (reported)
- PRKS (United Parks & Resorts Inc.)
- (no filing in the citation store)
- MTN (Vail Resorts, Inc.)
- (no filing in the citation store)
- CNK (Cinemark Holdings, Inc.)
- (no filing in the citation store)
- AMC (AMC ENTERTAINMENT HOLDINGS, INC.)
- (no filing in the citation store)
- MSGE (MADISON SQUARE GARDEN ENTERTAINMENT CORP.)
- (no filing in the citation store)
Methodology Note
- Priced-in inversion: the valuation is inverted on the current price to recover the operating-income growth, duration, and steady-state margin the price embeds (ROE for financials, FFO growth for REITs).
- Valuation x-ray: the valuation models, grouped into four families (asset, earnings, relative, growth). Each model is expressed as a price/FV ratio (distance from price), not a point fair-value estimate. The spread across families is the disagreement.
- Solvency: net cash/debt, net-debt-to-NOPAT, interest coverage, and share-count CAGR from EDGAR financials (net debt / FFO and fixed-charge coverage for REITs; regulatory-capital framing for financials).
- Peer cohorts: per-segment comparables with deep-linkable SEC filing citations.
Fundamentals sourced from SEC EDGAR filings. Current price from Databento. The priced-in inversion and valuation x-ray are computed by the boothcheck engine; narrative composed by AI from the structured data.