United Parks & Resorts: A Value Investor's Case for a Durable Moat at a Discount

The investment case for United Parks & Resorts rests on a simple, classic value principle: a high-quality business is trading at a significant discount to its intrinsic value. The company operates a durable, wide-moat business in a sector with high barriers to entry, yet its stock price reflects a period of temporary headwinds, creating a potential margin of safety for patient investors.

First, the scale and quality of the business are undeniable. United Parks & Resorts operates a portfolio of 13 parks across seven brands, a collection that includes iconic names like SeaWorld and Busch Gardens. This scale translates to substantial financial heft, with the company welcoming approximately 21.5 million guests and achieving revenues of $1,725.3 million in fiscal year 2024. This is not a niche operator; it is a major player in the global entertainment sector with a proven ability to attract and serve a large, captive audience.

The current valuation, however, tells a different story. The stock has been in a prolonged decline, hitting a 52-week low of $38.51 earlier this year-a drop of roughly 48% from its all-time high. As of late November 2025, the trailing price-to-earnings ratio stood at 9.93. This is a valuation typically reserved for struggling or cyclical companies, not a portfolio of established, cash-generating theme parks. The market is pricing in a permanent impairment, but the evidence suggests otherwise.

Management's actions provide a powerful counter-signal. In the face of this depressed share price, the company has been actively repurchasing its own stock. Through November 2025, United Parks & Resorts had repurchased $32.2 million of its stock. For a disciplined management team, buying back shares at these levels is a clear vote of confidence that the intrinsic value of the business is significantly higher than the current market price. It is a tangible demonstration of the margin of safety they believe exists.

The recent financial results, while showing pressure, underscore the temporary nature of the current challenges. Third-quarter revenue declined, and attendance dipped, but the company maintained a solid adjusted EBITDA of $216.3 million for the period. The core business remains profitable and generates substantial cash flow. The headwinds appear to be a mix of macroeconomic softness and a competitive landscape, not a fundamental breakdown of the moat. The wide moat-the combination of brand loyalty, intellectual property, and the scale of operations-remains intact.

For a value investor, the setup is compelling. You have a durable, high-quality asset with a proven track record of serving tens of millions of guests, now available at a deep discount to its historical valuation and to the price management is willing to pay for its own shares. The margin of safety is wide. The question is not whether the business can compound over the long term, but whether the market will eventually recognize that the temporary pressures are being managed and the intrinsic value will be realized.

Evidence of the Moat: Unique Assets and Strategic Positioning

The company's competitive advantages are not built on a single theme but on a portfolio of unique assets and a strategic positioning that creates a durable economic moat. This moat is evident in its rebranding, its core value proposition, and the breadth of its operations.

The strategic shift from SeaWorld Entertainment to United Parks & Resorts in February 2024 was more than a name change; it was a deliberate repositioning to reflect a broader entertainment portfolio. This move signals a company evolving beyond its marine-life roots to become a diversified operator of family and thrill experiences. By embracing a wider range of brands, the company reduces its reliance on any single concept and strengthens its appeal across different demographics and occasions. This strategic flexibility is a key part of its moat, allowing it to adapt and compete more effectively in a dynamic industry.

At the heart of its unique selling point is a blend of entertainment and education. While many theme parks focus solely on thrills, United Parks & Resorts differentiates itself by integrating educational animal encounters into its offerings. This combination of exciting attractions with conservation messaging provides a distinctive guest experience that is difficult for pure-play thrill parks to replicate. It fosters a deeper emotional connection with visitors, particularly families, and supports a premium pricing power for certain experiences like Discovery Cove. This dual focus creates a more resilient brand identity that can weather shifts in consumer preferences.

The company's moat is further fortified by the sheer scale and diversity of its portfolio. Operating 13 parks across seven brands in the US and Abu Dhabi provides significant geographic and thematic breadth. This diversification spreads risk across different markets and customer segments, from the high-thrill SeaWorld parks to the family-oriented Sesame Place and the water park concept of Aquatica. The scale of operations also enables substantial cost efficiencies in areas like marketing, supply chain, and technology, creating a structural advantage over smaller, regional competitors. The portfolio's reach-from the iconic Busch Gardens to the immersive Discovery Cove-means the company can attract a wide guest base year-round, insulating it from seasonal or regional downturns.

Together, these factors form a wide moat. The rebranding provides strategic clarity and growth potential. The unique educational-entertainment proposition builds brand loyalty and pricing power. And the diversified portfolio of 13 parks across seven brands creates scale, risk mitigation, and operational efficiencies. For a value investor, this is the essence of a durable business: a collection of assets that work together to create a competitive position that is difficult for rivals to copy or displace.

Valuation Evidence: A Discount to History and Peers

The numbers tell a clear story of a market pricing in a permanent impairment. The current valuation is deeply out of step with the company's historical performance and its own demonstrated ability to generate cash.

The most striking metric is the price-to-earnings ratio. As of late November 2025, the trailing P/E stood at 9.93. This is a steep discount to the stock's own history. Over the past decade, the P/E ratio has typically ranged in the mid-teens. Trading at nearly half that average multiple suggests the market is applying a severe discount for current pressures, potentially overlooking the durability of the underlying business.

This discount is also visible in the stock's price action. The share price has fallen dramatically from its highs. The 52-week low of $38.51 is well below the 52-week high of $60.83, representing a decline of about 36% from the peak. This volatility underscores the market's shifting sentiment, but it also creates a wide margin of safety for investors who believe the company's intrinsic value is anchored by its portfolio of parks and its cash-generating capacity.

Crucially, the company's strong balance sheet and free cash flow provide a foundation for this value. The business continues to produce substantial cash, as evidenced by its ability to fund a share repurchase program. Through November 2025, United Parks & Resorts had repurchased $32.2 million of its stock. This is not a speculative move; it is a disciplined capital allocation decision by management that signals confidence in the business's ability to generate returns even during a period of top-line pressure.

For a value investor, this setup offers a classic opportunity. The company trades at a significant discount to its historical valuation multiples, while simultaneously demonstrating its capacity to return capital to shareholders. The margin of safety is defined by this gap between price and the discounted cash flows the business is capable of producing. The question is whether the market will eventually recognize that the temporary headwinds are being managed and that the intrinsic value of this wide-moat portfolio is far greater than the current price implies.

Catalysts for Re-rating: What Could Unlock Value

For the stock to re-rate meaningfully from its current deep discount, the market needs to see concrete evidence that the temporary pressures are reversing and the company's wide moat is being effectively leveraged. The path to unlocking value hinges on a few specific operational and strategic milestones.

The most critical near-term catalyst is the stabilization and reversal of the attendance decline. The third quarter results showed a 3.4% year-over-year decrease in attendance, a clear headwind that dragged down revenue and profitability. For a theme park business, consistent guest traffic is the lifeblood of the model. A return to growth in this metric would signal that the company's marketing, pricing, and guest experience initiatives are working. It would also directly address the primary driver of the recent financial pressure, providing a tangible foundation for a recovery in earnings power.

A successful execution of the company's strategic rebranding is the longer-term test of its moat. The shift from SeaWorld Entertainment to United Parks & Resorts in February 2024 was a deliberate move to reflect a broader portfolio of entertainment offerings beyond its well-known marine-life parks. The catalyst here is not just the name change, but the tangible results of attracting a broader audience. Can the company successfully leverage its diverse brands-like the family-focused Sesame Place or the water park concept of Aquatica-to draw guests who might not have considered a traditional marine-life park? Demonstrating that the rebranding is expanding the customer base, not just maintaining it, would validate the strategic pivot and prove the durability of its wide moat in a more competitive landscape.

Ultimately, a significant re-rating would require a sustained recovery in earnings and a clear return to growth. The recent decline in adjusted EBITDA and net income shows the pressure is real. The market will need to see multiple quarters of improving financials, driven by the stabilization in attendance and the success of the rebranding. This would allow the company to not only cover its costs but also fund future investments and continue its disciplined capital return, like the share repurchases already underway. Until that trajectory is visible, the stock will likely remain in a depressed range, priced for continued weakness. The catalysts are clear, but their execution is what will determine if the market's pessimistic view is proven wrong.

Risks & Counterarguments: Addressing the Bear Case

For any investment thesis, the bear case must be acknowledged. The primary risk is the sustainability of the recent revenue and attendance declines. The third-quarter results showed a 3.4% year-over-year decrease in attendance, which directly pressured total revenue and profitability. If this trend persists or worsens, it could strain the company's cash flow and limit its ability to fund growth initiatives or share repurchases. More critically, a prolonged erosion in guest traffic would test the durability of the competitive moat, as the core value proposition of drawing millions of visitors annually is the foundation of the business model.

Industry-wide factors will continue to pressure margins. Theme parks are a discretionary entertainment expense, making them vulnerable to shifts in consumer spending. At the same time, the competitive landscape is intense, with alternative forms of entertainment vying for household leisure budgets. This dynamic puts pressure on both admission pricing and in-park spending, as seen in the decrease in admission per capita and total revenue per capita. The company's ability to maintain pricing power and drive ancillary spending will be key to protecting margins during any economic softness.

Finally, the success of the rebranding strategy in attracting a broader audience remains a long-term test of management's vision. The shift from SeaWorld Entertainment to United Parks & Resorts in February 2024 was a deliberate move to reflect a broader range of entertainment offerings beyond its well-known marine-life parks. While the portfolio includes diverse brands like Sesame Place and Aquatica, the evidence does not yet show a clear expansion of the customer base. The catalyst for unlocking value is proving that this rebranding can successfully draw guests who might not have considered a traditional marine-life park. Until that strategic pivot demonstrably grows the top line, the bear case holds weight that the company is merely managing a portfolio of established assets in a challenging environment.

The bottom line is that the value proposition hinges on the company's ability to reverse the current headwinds. The bear case is not about the failure of the moat, but about the temporary pressure on its economic engine. For a patient investor, the wide margin of safety at current prices provides a cushion against these risks, but the ultimate payoff depends on management executing a successful turnaround.