FUN
Six Flags Entertainment Corporation
$19.83
Distressed or Transitioning
75%
Current EPS × Depressed Multiple
Mild
·
Conviction
Fair Value
Trading 12.4% below fair value
You pay
$19.83
Bear
$15.10
Fair
$22.65
Bull
$30.20
Bear
$15.10
-23.8%
EPS continues to decline, 5x multiple
Fair
$22.65
+14.2%
Current EPS stabilizes, 8x multiple
Bull
$30.20
+52.3%
Credible recovery, multiple re-rates to 10x
Key Value Driver
Whether the core business model is intact or structurally impaired
Implied Market Multiple
6.5x
Summary
Our base-case estimate uses Current EPS × Depressed Multiple. We then blend that result with the average analyst price target of $22.43 from 29 analysts, using a 25% weight on analyst consensus. That produces an estimated intrinsic value of $22.65 per share.
Warnings
Don't assume past cash flow levels will return — the company's troubles may have permanently reduced its ability to generate profits.
A stock can look cheap on paper and still lose half its value if the underlying business is permanently damaged.
The wide range between our best and worst cases is intentional — pretending to know a precise value for a troubled company would be misleading.
Debt per share ($52.21) is more than half the stock price. With this much debt on a struggling business, the paths to recovery for shareholders are narrow.
Key Risks
- Bullish DCF projections are fundamentally unknowable for distressed companies
- M&A speculation can floor the stock above intrinsic value temporarily
- Management credibility is a key input — new CEO expands the bull case