This Just In: Analysts Are Boosting Their Six Flags Entertainment Corporation (NYSE:SIX) Outlook for This Year

Celebrations may be in order for Six Flags Entertainment Corporation (NYSE:SIX) shareholders, with the analysts delivering a significant upgrade to their statutory estimates for the company. The analysts greatly increased their revenue estimates, suggesting a stark improvement in business fundamentals.

After this upgrade, Six Flags Entertainment’s 13 analysts are now forecasting revenues of US$1.1b in 2021. This would be a huge 221% improvement in sales compared to the last 12 months. The loss per share is anticipated to greatly reduce in the near future, narrowing 85% to US$0.77. However, before this estimates update, the consensus had been expecting revenues of US$935m and US$1.25 per share in losses. We can see there’s definitely been a change in sentiment in this update, with the analysts administering a sizeable upgrade to this year’s revenue estimates, while at the same time reducing their loss estimates.

Despite these upgrades, the analysts have not made any major changes to their price target of US$51.73, implying that their latest estimates don’t have a long term impact on what they think the stock is worth. There’s another way to think about price targets though, and that’s to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. The most optimistic Six Flags Entertainment analyst has a price target of US$73.00 per share, while the most pessimistic values it at US$32.00. This is a fairly broad spread of estimates, suggesting that the analysts are forecasting a wide range of possible outcomes for the business.

Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. One thing stands out from these estimates, which is that Six Flags Entertainment is forecast to grow faster in the future than it has in the past, with revenues expected to display 4x annualised growth until the end of 2021. If achieved, this would be a much better result than the 10% annual decline over the past five years. Compare this against analyst estimates for the broader industry, which suggest that (in aggregate) industry revenues are expected to grow 22% annually. So it looks like Six Flags Entertainment is expected to grow faster than its competitors, at least for a while.

The Bottom Line

The highlight for us was that the consensus reduced its estimated losses this year, perhaps suggesting Six Flags Entertainment is moving incrementally towards profitability. Fortunately, analysts also upgraded their revenue estimates, and our data indicates sales are expected to perform better than the wider market. The lack of change in the price target is puzzling, but with a serious upgrade to this year’s earnings expectations, it might be time to take another look at Six Flags Entertainment.

Analysts are definitely bullish on Six Flags Entertainment, but no company is perfect. Indeed, you should know that there are several potential concerns to be aware of, including recent substantial insider selling. You can learn more, and discover the 2 other flags we’ve identified, for free on our platform here.

Of course, seeing company management invest large sums of money in a stock can be just as useful as knowing whether analysts are upgrading their estimates

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