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TheStreet Open House

Why Six Flags Entertainment (SIX) Stock Is Up Today

Stocks in this article: SIX

NEW YORK (TheStreet) -- Shares of Six Flags Entertainment Corp. (SIX) are up 1.05% to $42.16 in early trading on Monday morning after analysts at Credit Suisse (CS) raised their price target on the stock to $49 from $47.

In addition, the world's largest regional theme park company announced today that it has entered into a strategic partnership with Riverside Investment Group Co., a real estate developer in China, to build multiple park locations in the region over the next decade.

Six Flags did not disclose terms of the deal.

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Separately, TheStreet Ratings team rates SIX FLAGS ENTERTAINMENT CORP as a Buy with a ratings score of B-. TheStreet Ratings Team has this to say about their recommendation:

"We rate SIX FLAGS ENTERTAINMENT CORP (SIX) a BUY. This is driven by several positive factors, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its increase in stock price during the past year, increase in net income and notable return on equity. We feel these strengths outweigh the fact that the company has had generally high debt management risk by most measures that we evaluated."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • Compared to where it was 12 months ago, the stock is up, but it has so far lagged the appreciation in the S&P 500. Turning our attention to the future direction of the stock, it goes without saying that even the best stocks can fall in an overall down market. However, in any other environment, this stock still has good upside potential despite the fact that it has already risen in the past year.
  • The net income growth from the same quarter one year ago has exceeded that of the Hotels, Restaurants & Leisure industry average, but is less than that of the S&P 500. The net income increased by 2.1% when compared to the same quarter one year prior, going from -$62.53 million to -$61.20 million.
  • SIX FLAGS ENTERTAINMENT CORP' earnings per share from the most recent quarter came in slightly below the year earlier quarter. The company has suffered a declining pattern of earnings per share over the past year. However, we anticipate this trend reversing over the coming year. During the past fiscal year, SIX FLAGS ENTERTAINMENT CORP reported lower earnings of $1.20 versus $3.04 in the prior year. This year, the market expects an improvement in earnings ($1.43 versus $1.20).
  • SIX, with its decline in revenue, slightly underperformed the industry average of 6.0%. Since the same quarter one year prior, revenues fell by 15.8%. The declining revenue appears to have seeped down to the company's bottom line, decreasing earnings per share.
  • Return on equity has greatly decreased when compared to its ROE from the same quarter one year prior. This is a signal of major weakness within the corporation. Compared to other companies in the Hotels, Restaurants & Leisure industry and the overall market, SIX FLAGS ENTERTAINMENT CORP's return on equity significantly exceeds that of both the industry average and the S&P 500.
  • You can view the full analysis from the report here: SIX Ratings Report
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