Theme park operator United Parks & Resorts (NYSE:SEAS) reported Q1 CY2024 results exceeding Wall Street analysts' expectations, with revenue up 1.4% year on year to $297.4 million. It made a GAAP loss of $0.17 per share, improving from its loss of $0.26 per share in the same quarter last year.
Is now the time to buy United Parks & Resorts? Find out by reading the original article on StockStory, it's free.
United Parks & Resorts (PRKS) Q1 CY2024 Highlights:
- Revenue: $297.4 million vs analyst estimates of $284.7 million (4.5% beat)
- EPS: -$0.17 vs analyst estimates of -$0.28 (40.1% beat)
- Gross Margin (GAAP): 36.8%, up from 33.2% in the same quarter last year
- Free Cash Flow was -$15.84 million, down from $35.84 million in the previous quarter
- Visitors: 3.5 million
- Market Capitalization: $3.11 billion
Parent company of SeaWorld (NYSE:PRKS) and home of the world-famous Shamu, United Parks & Resorts (NYSE:PRKS) is a theme park chain featuring marine life, live entertainment, roller coasters, and waterparks.
Leisure FacilitiesLeisure facilities companies often sell experiences rather than tangible products, and in the last decade-plus, consumers have slowly shifted their spending from "things" to "experiences". Leisure facilities seek to benefit but must innovate to do so because of the industry's high competition and capital intensity.
Sales GrowthA company’s long-term performance can give signals about its business quality. Any business can put up a good quarter or two, but many enduring ones muster years of growth. United Parks & Resorts's annualized revenue growth rate of 4.7% over the last five years was weak for a consumer discretionary business. Within consumer discretionary, product cycles are short and revenue can be hit-driven due to rapidly changing trends. That's why we also follow short-term performance. United Parks & Resorts's annualized revenue growth of 3.9% over the last two years aligns with its five-year revenue growth, suggesting the company's demand has been stable.
We can dig even further into the company's revenue dynamics by analyzing its number of visitors, which reached 3.5 million in the latest quarter. Over the last two years, United Parks & Resorts's visitors were flat. Because this number is lower than its revenue growth during the same period, we can see the company's monetization of its consumers has risen.
This quarter, United Parks & Resorts reported reasonable year-on-year revenue growth of 1.4%, and its $297.4 million of revenue topped Wall Street's estimates by 4.5%. Looking ahead, Wall Street expects sales to grow 2.8% over the next 12 months, an acceleration from this quarter.
Cash Is KingAlthough earnings are undoubtedly valuable for assessing company performance, we believe cash is king because you can't use accounting profits to pay the bills.
Over the last two years, United Parks & Resorts has shown solid cash profitability, giving it the flexibility to reinvest or return capital to investors. The company's free cash flow margin has averaged 14.7%, above the broader consumer discretionary sector.
United Parks & Resorts burned through $15.84 million of cash in Q1, equivalent to a negative 5.3% margin, increasing its cash burn by 18.6% year on year.
Key Takeaways from United Parks & Resorts's Q1 Results We were impressed by how significantly United Parks & Resorts blew past analysts' EPS estimates this quarter, driven by outperformance in its operating margin. We were also glad its revenue beat as it attracted more visitors than expected. Zooming out, we think this was a great quarter that shareholders will appreciate. The stock is up 3% after reporting and currently trades at $50.6 per share.
