Why Shares of Six Flags Entertainment Popped 11.1% on Wednesday

What happened 

Shares of amusement park company Six Flags Entertainment (NYSE:SIX) jumped as much as 11.1% in trading on Wednesday after reporting fourth-quarter 2020 results. Shares were off their highs but still up 4.1% at 3:40 p.m. EST. 

So what

Fourth-quarter revenue dropped 58% to $109 million, and net loss for Six Flags was $86 million, or $1.00 per share. On the plus side, spending per guest jumped 17% to $47.00, and management is confident that business will continue to improve in 2021.

A roller coaster train cascading downhill.

Image source: Getty Images.

Management is still planning to open all parks and says there is pent-up demand for the company’s attractions. When customers do return, efficiency and technology improvements at parks could result in higher margins and profitability than before the pandemic. 

Now what

Anything pointing in the direction of good news is being seen as a positive by Six Flags investors today. The company has been hit harder than most by the pandemic but could turn itself into a growth stock if demand does indeed surge this summer. That’s what investors are betting on today, and with vaccines rolling out quickly, it’s a good time to be bullish on entertainment stocks. 

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This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.

View more information: https://www.fool.com/investing/2021/02/24/why-shares-of-six-flags-entertainment-popped-111-o/

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