SeaWorld Entertainment stock can be collected on the downdraft

Shares of theme park and entertainment company SeaWorld Entertainment (NYSE:SEAS) are down (-33%). The operator of the SeaWorld and Busch Gardens theme parks has been recovering since reopening after the COVID lockdowns were lifted. Vaccinations were key to the recovery in visitor numbers, which increased 53.7% to 3.4 million guests in the fiscal first quarter of 2022, as capacity and social distancing restrictions were lifted. The company believes there is further recovery due to strong momentum that still does not reflect a normalized environment. International groups are returning as the company rolls out new attractions and strengthens its workforce. Double-digit increases in admission prices have been implemented to ease inflationary pressures as admissions per capita increased by 2.5%. SeaWorld has enhanced the experience in the park with the enhancement of its mobile app, which has nearly 1.4 million downloads, enabling double-digit in-park purchases and e-commerce. Cautious investors seeking exposure in the theme park’s entertainment space can look forward to opportunistic pullbacks in SeaWorld Entertainment shares. – MarketBeat

Q1 Fiscal 2022 Profit 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 loss of earnings per share (EPS) of ($0.12) excluding one-time items vs. consensus analyst estimates for a loss of (-$0.14), beating estimates by $0.02. Revenues were up 57.5% year-over-year (YOY) to $270.70 million, better than analysts’ estimates of $263.23 million. Attendance increased by 1.2 million guests year-on-year to 3.4 million in total, an increase of 53.7%. Turnout rose 16.4% compared to the pre-pandemic in Q1 2019. Adjusted EBITDA was a record $65.9 million, up 161.8% year over year. Total revenue per capita increased 2.5% to a record $79.54 year-over-year. The company repurchased 1.5 million shares of common stock for approximately $109.9 million. The company helped more than 300 animals in need in the wild. SeaWorld CEO Mark Swanson noted: “While our first quarter performance was strong and our momentum continues from 2021, we have room for further recovery as it still does not reflect a normalized business environment. International and group-related visits in particular are improving, but was not yet back to pre-COVID levels and we have opportunities to improve staffing levels to accommodate even more demand for spending in the park We are also fortunate to have an extremely strong balance sheet at $380.0 million in cash and cash equivalents, $745.3 million in total available liquidity and an LTM net total leverage ratio of just 2.4x.”

Takeaway for conference calls

CEO Swanson noted that strong momentum accelerated from 2021 to 2022 with record financial results. He feels there is further recovery as it is not yet reflected as a normalized business environment. International travelers are returning, and the pricing power allows the company to offset inflationary pressures on costs. The company opened its first brand new theme park since 2013, Sesame Place San Diego Park. Addressing the debt concerns, he noted that the LTM’s total leverage ratio has fallen below 2.5X as the company has more than $745 million in total available liquidity, comprising $380 million in cash. This enables SeaWorld to continue to make opportunistic investments to enhance shareholder value. The job market is still tight, but the company is finding better ways to attract, motivate and retain talent, including using an international workforce.

SeaWorld Entertainment stock can be collected on the downdraft

SEAS Opportunistic Withdrawal Levels

Using the gun charts on the weekly and daily time frames provides an accurate picture of the landscape for SEAS stocks. The weekly gun chart collapsed bringing a temporary bottom near the $41.11 Fibonacci (fib) level. The weekly downtrend has a falling resistance 5-period moving average (MA) at $51.72 followed by the 50-period MA at $60.14 and 15-period MA at $62.16. The weekly lower Bollinger Bands (BBs) are at $41.98 as the stochastics dip through the 20 band. The 200-period weekly MA stands at $36.91. The weekly market structure low (MSL) buys triggers on a breakout to $49.47. The downward trend of the daily gun chart has a descending 5-period MA at $44.51, followed by the 15-period MA at $50.64. The daily lower BBs sit at $40.10 while the daily stochastics stops at the 10 band. The 50-period daily MA is at $59.40 and the 200-period MA resistance is at $62.10, overlapping the daily upper BBs on the nose. Cautious investors can look for opportunistic pullback levels at the $41.31 fib, $39.26 fib, $33.11 fib, $31.33 fib, $29.78 fib and the $27.44 fib level. Upward trajectories range from the $55.21 fib level to the $70.34 fib level.

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