Assessing Six Flags' Q3 Earnings Miss: A Strategic Entry Point for Long-Term Investors?

The recent Q3 2024 earnings report from Six Flags Entertainment Corporation (NYSE: FUN) has sparked intense debate among investors. While the company posted a staggering $1.2 billion net loss driven by a $1.5 billion non-cash impairment charge, as reported by StreetInsider, its reaffirmed 2025 EBITDA guidance and mixed analyst ratings suggest a complex valuation story. This article examines whether the earnings miss and operational challenges present a compelling opportunity for long-term investors willing to navigate short-term turbulence.

A Q3 Performance Marked by Contradictions

Six Flags reported $1.32 billion in net revenues for Q3 2024, a 2% decline year-over-year, according to StreetInsider. The impairment charge-linked to goodwill and intangible assets-overshadowed a 1% rise in attendance to 21.1 million guests and a 6% increase in out-of-park revenues, as reported by StreetInsider. However, in-park per capita spending fell 4%, with admissions revenue dropping 8% due to aggressive promotional activity and a shift toward lower-spending season pass holders, as reported by StreetInsider. Adjusted EBITDA of $555 million, though slightly below 2024 levels, remains within the company's 2025 guidance range of $860–910 million, as reported by StreetInsider.

The earnings miss has been attributed to broader structural issues. A class-action lawsuit alleges that the July 2024 merger with Cedar Fair was executed without disclosing deferred maintenance and underinvestment in Legacy Six Flags' parks, as reported by Marketscreener. These operational gaps, according to plaintiffs, created unmet capital needs that dented revenue and earnings projections, as reported by Marketscreener. The stock price plummeted nearly 64% from its $55 peak to a low of $20, reflecting investor skepticism, as reported by Marketscreener.

Forward Guidance and Analyst Optimism

Despite the Q3 setbacks, Six Flags has maintained its 2025 adjusted EBITDA guidance of $860–910 million, as reported by Marketscreener. This resilience stems from a summer rebound in season pass sales and attendance growth of 2% through Labor Day, as reported by Marketscreener. While in-park spending remains pressured-partly due to a shift in guest mix-management highlights that its flagship parks account for 70% of Modified EBITDA and are on track for record performance, as reported by Marketscreener.

Analyst sentiment, though mixed, leans cautiously optimistic. As of Q4 2025, 14 Wall Street analysts rate the stock as a "Moderate Buy," with an average 12-month price target of $34.07-implying an 85.98% upside from the current $18.32 level, as reported by MarketBeat. However, recent downward revisions to EPS estimates (a 0.9% drop over 30 days, as reported by Nasdaq) and reduced revenue forecasts for admissions and food/merchandise segments, as reported by Nasdaq, underscore lingering uncertainties.

Strategic Moves and Valuation Potential

Six Flags' partnership with NFL star Travis Kelce to revitalize branding and guest experiences, as reported by Marketscreener, adds a layer of intrigue. Such initiatives could address the "attendance mix" challenges highlighted in Q3, where promotional-driven visitors diluted in-park spending. Additionally, the company's engagement with activist investors suggests a willingness to explore operational overhauls.

From a valuation perspective, the stock's current price appears disconnected from its underlying EBITDA guidance. At $18.32, FUN trades at a price-to-EBITDA multiple of roughly 1.5x (assuming $900 million EBITDA), a steep discount to historical averages. While the impairment charge clouds near-term profitability, long-term investors may find value in the company's durable asset base and recurring revenue streams from season passes.

Conclusion: A Calculated Bet

Six Flags' Q3 performance reflects a company in transition. The impairment charge and operational headwinds are undeniably painful, but the reaffirmed EBITDA guidance, attendance growth, and analyst price targets suggest a path to recovery. For long-term investors, the key question is whether the current discount adequately reflects the risks while leaving room for upside from strategic pivots and park revitalization. Given the "Moderate Buy" consensus, as reported by MarketBeat, and the stock's potential to rebound toward $34, the earnings miss may indeed represent a strategic entry point-for those prepared to weather volatility.