Theme Park and Amusement Company SeaWorld Entertainment (NYSE:SEAS) The stock has sank (-33%) for the year. Operators of SeaWorld and Busch Gardens theme parks have recovered since reopening after the COVID lockdown was lifted. Vaccination has been the key to a rebound in attendance, which jumped 53.7% in its fiscal Q1 2022 to reach 3.4 million guests as capacity limits and social distancing restrictions were relieved. The company believes further improvement due to strong momentum still not reflecting the general environment. International conglomerates are returning as the company adds new attractions and workforce. Double digit entry price hike has been implemented to reduce inflationary pressures as its per capita admission has increased by 2.5%. SeaWorld has improved the in-park experience with the revamp of its mobile app that boasts nearly 1.4 million downloads that enable double-digit in-park and e-commerce purchases. Prudent investors seeking exposure to the theme park entertainment space may see an opportunistic drawdown in SeaWorld Entertainment’s shares.
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Q1 Fiscal 2022 Earnings Release
On May 12, 2022, Six Flags released its fiscal first quarter 2022 results for the quarter ended March 2022. The company reported an adjusted earnings-per-share (EPS) loss of ($0.12) excluding non-recurring items versus consensus analyst estimates. For a loss of (-$0.14), outweighed estimates by $0.02. Revenue grew 57.5% year-over-year (YOY) to $270.70 million, beating analyst estimates of $263.23 million. Attendance increased 1.2 million year-on-year to 3.4 million, a 53.7% increase. Attendance grew 16.4% compared to Q1 2019 pre-pandemic. Adjusted EBITDA was a record $65.9 million, up 161.8% YoY. Total revenue per capita grew by 2.5% to a record $79.54 YoY. The company bought back 1.5 million shares of common stock for approximately $109.9 million. The company came to the aid of more than 300 animals in need in the wild. Mark Swanson, CEO of SeaWorld, commented, “While our first quarter performance was strong and our momentum continued through 2021, we have room for further improvement as it still does not reflect a normalized operating environment. Specifically , International and group visits are improving but have not yet returned to pre-COVID levels and we have staffing levels to meet the demand for in-park spending even more. There are opportunities to improve. We are also very fortunate to have an extremely strong balance sheet with $380.0 million in cash and cash equivalents, $745.3 million of total available liquidity and only 2.4x the LTM net total leverage ratio.”
Conference Call Takeaways
CEO Swanson noted strong momentum from 2021 to 2022 with record financial results. They feel that it has been further improved as it has not yet been reflected as a normal operating environment. International travelers are returning, and pricing power is enabling the company to offset inflationary cost pressures. The company has opened its first brand new theme park since 2013 Sesame Place San Diego Park. Addressing debt concerns, he noted that the LTM total leverage ratio has fallen below 2.5X as the company has $380 million in cash plus $380 million in total available liquidity. This enables SeaWorld to continue to make opportunistic investments to drive shareholder value. The labor market is still tight, but the company is finding better ways to attract, inspire and retain talent, including the use of international labor.
sea opportunistic pullback level
Using Rifle charts on the weekly and daily time frames provides an accurate view of the scenario for the SEAS stock. Weekly Rifle Chart $41.11 . fell into a floating floor near Fibonacci (Fib) Levels, The weekly downtrend is declining with resistance from the 5-period moving average (MA) at $51.72, followed by the 50-period MA at $60.14 and the 15-period MA at $62.16. The weekly lower Bollinger Bands (BB) sits at $41.98 as Stochastics declines above the 20-band. The weekly 200-period MA sits at $36.91. weekly Market Structure Less (MSL) Buy trigger on breakout back up through $49.47. The 5-period MA is falling in a downtrend on the Daily Rifle charts at $44.51, followed by the 15-period MA at $50.64. The daily low sits at $40.10 as the daily stochastic stalls on the BB10-band. The daily 50-period MA sits at $59.40 and the 200-period MA resistance sits at $62.10 which overlaps with the daily upper BB on the nose. Prudent investors can watch for opportunistic pullback levels at $41.31 Fib, $39.26 Fib, 33.11 Fib, $31.33 Fib, $29.78 Fib, and $27.44 Fib levels. There is an upward trajectory from the $55.21 Fib level to the $70.34 Fib level.
