Six Flags (FUN) Plunges 7.6% on Attendance Declines, Debt Woes, Industry Headwinds

Six Flags Entertainment (FUN) fell to its lowest level since April 2020 on Friday, with an intraday drop of 5.25% and a two-day decline of 7.60%. The shares have been pressured by a combination of operational struggles, financial burdens, and competitive challenges in the theme park sector.

Declining attendance remains a critical factor. The company reported a 9% drop in park visits during Q2 2025 compared to its previous year’s combined portfolio, attributed to poor weather, underperforming attractions like Cedar Point’s Siren’s Curse, and recurring ride malfunctions. These issues have eroded guest satisfaction and compounded difficulties during the summer peak season. Broader industry trends, including similar attendance declines at competitors like Disney and Universal, highlight systemic challenges in the sector.

Financial pressures are intensifying. With $5.29 billion in total debt and a leverage ratio exceeding 5x, Six Flags faces scrutiny from credit agencies. A recent S&P downgrade to 'BB-' with a negative outlook underscores concerns about its ability to service debt amid shrinking revenues. The company has cut capital expenditures and announced the closure of underperforming parks, including Six Flags America, to prioritize debt reduction. These moves aim to improve liquidity but signal a strategic shift toward core assets.

Competitive disadvantages persist. Struggling to differentiate itself from industry leaders, Six Flags has seen its market share dwindle. Weak performance of new attractions and operational inefficiencies have left it trailing behind rivals with stronger brand loyalty and attendance resilience. Analysts remain cautiously optimistic, with a "Moderate Buy" consensus and an average price target of $30.25 implying a 19.8% upside. However, recovery hinges on executing cost-cutting measures, improving park quality, and navigating macroeconomic headwinds like inflation.

The path forward remains uncertain. While short-term actions such as asset sales and park closures provide immediate relief, long-term success depends on reversing attendance trends and addressing operational flaws. Investors will closely monitor progress in debt reduction, leadership changes, and the effectiveness of new strategies. For now, the stock reflects ongoing uncertainties about the company’s ability to stabilize its financial and operational footing in a challenging industry environment.