It’s now been six years since the current Six Flags Entertainment Corp SIX 0.02% management took over following the company’s 2009 bankruptcy. According to Macquarie analyst Matthew Brooks, the new regime has completely changed the focus of the company, but that doesn’t necessarily make the stock a buy.
Brooks notes that Six Flags focused on debt-driven acquisitions in the 2000s, which resulted in a “lost decade” for shareholders. Eventually, poor attendance and a widening price gap with rival Cedar Fair, L.P. FUN 0.08% resulted in a bankruptcy filing for Six Flags.
Since new management took over six years ago, Six Flags has increased attendance 3.3 percent annually, boosted pass attendance from 32 percent to 56 percent, and raised ticket prices and in-park pricing 2.7 percent and 1.2 percent per year, respectively.
Today, Brooks believes Six Flags is still a growth story and argues that the company’s strategies have some legs.
“We still think there is growth in the pass strategy – adding more members and selling more in-park passes for dining, drinks, flash pass, retail,” he explains.
He also believes…
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