Six Flags Entertainment Corporation/NEW (FUN) stock intrinsic value fair value estimate & owner earnings analysis

Six Flags Entertainment Corporation is the largest regional amusement and water park operator in North America, formed on July 1, 2024 when Cedar Fair and the former Six Flags combined. It runs roughly 40 parks, including Cedar Point, Kings Island, Knott's Berry Farm, Six Flags Great Adventure and Magic Mountain, Canada's Wonderland, La Ronde in Montreal and two parks in Mexico. About 90 percent of 2025 revenue of $3.1 billion came from the United States. Money comes from admissions and season passes, in-park food, merchandise and extra-charge items, and sponsorships. How we measured earning power. We start from the cash the parks generate, remove seasonal swings in working capital, and deduct stock compensation and capital spending in full, because rides and park upkeep are a real, recurring cost of staying in business. Only 2025 is a full year of the combined company (2024 holds just six months of the former Six Flags, and 2023 is Cedar Fair alone), so 2025 is our starting point. On that basis 2025 owner earnings after interest were negative $133 million: operating cash flow of $327 million, plus $82 million of working-capital drag we add back, less $64 million of stock compensation and $480 million of capital spending. Before the roughly $335 million of cash interest paid, the business produced about $202 million, or $2.00 per share. The $1.5 billion write-down of goodwill and trade names in the third quarter of 2025 is a non-cash accounting charge and does not reduce this figure; we treat it as a sign the market and management expect weaker future cash flow than when the merger was priced. Debt comes first. Shareholders own what is left after lenders. At June 28, 2026 the company had about $5.0 billion of debt: a term loan of about $1.5 billion due 2031, roughly $270 million drawn on a revolver, and senior notes due 2028 ($300 million at 6.5%), 2029 ($500 million at 5.25%), 2031 ($800 million at 7.25%) and 2032 ($850 million at 6.625%, plus new 2032 notes issued in February 2026 that repaid the two 2027 issues). On top of that, the company has committed to buy out the outside owners of Six Flags Over Georgia in January 2027; about $355 million would be owed on 2025 values, and it carries another $235 million of outside ownership in Six Flags Over Texas, whose owners can sell their units to the company each year. Because these parks' cash flows are counted in full, we subtract those amounts. Debt costing about 6.5 percent against our 6 percent yardstick adds roughly $110 million. In total we treat about $5.7 billion, or about $56 per share, as owed ahead of shareholders. Cash of $135 million is treated as working cash for a seasonal business. Bear case: about $200 million a year after all spending, worth about $3.3 billion against about $5.7 billion owed. The company appears to owe roughly $2.4 billion more than the business is worth, about negative $23 per share. The story rests on named facts: attendance at the legacy Cedar Fair parks fell by 2.1 million visits in 2025; revenue in the first half of 2026 was 3.7 percent lower than a year earlier and 7.0 percent lower in the second quarter; and capital spending has run at 12 to 15 percent of revenue. Here cash flow before capital spending falls to about $600 million and capital spending stays near $400 million. With business cash flow below the roughly $330 million annual interest bill, lenders would be unlikely to refinance the 2028 and 2029 notes and the 2029 revolver on today's terms, so shareholders would be left with little or nothing. Base case: about $300 million a year after all spending, flat. That is worth about $5.0 billion against about $5.7 billion owed, a shortfall of about $0.7 billion, or about negative $7 per share. Cash flow before capital spending is held at the 2025 level of about $680 million. Spending on rides and upkeep is set at about $380 million, or 12.3 percent of revenue, the ratio Cedar Fair posted in 2023 and close to 2024's 11.8 percent, instead of the merger catch-up year's 15.5 percent. Growth-path check: actual business cash flow fell about 41 percent in 2025 (from $340 million to $202 million), but that comparison mixes six and twelve months of the former Six Flags. Year 1 of this case is higher, about $300 million, for one dated reason: first-half 2026 capital spending was $149 million, against $308 million in the first half of 2025, and the company had only about $90 million of additional committed spending at year-end 2025. Beyond that we credit no growth: attendance is falling, and price increases, new rides and cost savings from the merger are targets, not secured results. We let the parks' cash flow run indefinitely at that flat level because the earning power comes from owned land and rides that keep producing so long as they are maintained, and those upkeep costs are already deducted. Bull case: about $370 million a year rising to about $435 million by year five, then flat. That is worth about $7.1 billion against about $5.7 billion owed, leaving about $1.4 billion, or about $13.6 per share. It assumes capital spending settles at about $330 million (the trailing twelve-month total through June 2026 was $321 million) and that in-park spending per visitor keeps growing about as it did in 2025 (up 3.2 percent) and out-of-park revenue keeps growing (up 9.9 percent), adding roughly one percent a year to revenue for five years. We do not assume a strong attendance recovery or a share gain, because we cannot name evidence for either. What could prove us wrong. If capital spending stays near $330 million or below while revenue holds at 2025 levels, the base case would be worth roughly break-even and would move toward the bull. On the other side, the company's own accounting for the 2025 write-down was based on lower expected cash flows, and the Texas partnership owners may sell their units to the company at a price set by formula, which could add to what is owed. The 2028 and 2029 maturities matter: refinancing is affordable only if cash flow after capital spending rises well above interest costs. We could not reconcile the sharp swing in first-half 2026 operating cash flow ($153 million versus $9 million a year earlier) from the filings alone, so we did not lift the earnings level on it. What the shares are worth. On this method the shares are worth less than nothing in the bear and base cases and about $14 in the bull case, so the margin-of-safety price applies only once the business shows sustained cash flow well above its interest and buyout obligations.