Earnings Miss: Six Flags Entertainment Corporation Missed EPS By 12% And Analysts Are Revising Their Forecasts - Yahoo Finance

Earnings Miss: Six Flags Entertainment Corporation Missed EPS By 12% And Analysts Are Revising Their Forecasts - Yahoo Finance

There's been a notable change in appetite for Six Flags Entertainment Corporation (NYSE:SIX) shares in the week since its annual report, with the stock down 17% to US$32.63. It was not a great result overall. While revenues of US$1.5b were in line with analyst predictions, earnings were less than expected, missing statutory estimates by 12% to hit US$2.11 per share. Analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. We've gathered the most recent statutory forecasts to see whether analysts have changed their earnings models, following these results.

Check out our latest analysis for Six Flags Entertainment

NYSE:SIX Past and Future Earnings, February 24th 2020

Taking into account the latest results, Six Flags Entertainment's eleven analysts currently expect revenues in 2020 to be US$1.47b, approximately in line with the last 12 months. Statutory earnings per share are forecast to sink 19% to US$1.71 in the same period. In the lead-up to this report, analysts had been modelling revenues of US$1.49b and earnings per share (EPS) of US$2.41 in 2020. So there's definitely been a decline in analyst sentiment after the latest results, noting the pretty serious reduction to new EPS forecasts.

The average analyst price target fell 10% to US$37.27, with reduced earnings forecasts clearly tied to a lower valuation estimate. The consensus price target just an average of individual analyst targets, so - considering that the price target changed, it would be handy to see how wide the range of underlying estimates is. Currently, the most bullish analyst values Six Flags Entertainment at US$63.00 per share, while the most bearish prices it at US$28.00. This is a fairly broad spread of estimates, suggesting that analysts are forecasting a wide range of possible outcomes for the business.

Zooming out to look at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up both against past performance, and against industry growth estimates. These estimates imply that sales are expected to slow, with a forecast revenue decline of 0.9% a significant reduction from annual growth of 4.9% over the last five years. Compare this with our data, which suggests that other companies in the same market are, in aggregate, expected to see their revenue grow 8.2% next year. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - analysts also expect Six Flags Entertainment to grow slower than the wider market.

The Bottom Line

The most important thing to take away is that analysts downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. Fortunately, analysts also reconfirmed their revenue estimates, suggesting sales are tracking in line with expectations - although our data does suggest that Six Flags Entertainment's revenues are expected to perform worse than the wider market. The consensus price target fell measurably, with analysts seemingly not reassured by the latest results, leading to a lower estimate of Six Flags Entertainment's future valuation.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have estimates - from multiple Six Flags Entertainment analysts - going out to 2022, and you can see them free on our platform here.

You can also view our analysis of Six Flags Entertainment's balance sheet, and whether we think Six Flags Entertainment is carrying too much debt, for free on our platform here.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Thank you for reading.

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2020-02-24 11:47:00Z
https://finance.yahoo.com/news/earnings-miss-six-flags-entertainment-114749789.html
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