$29.58
$90.14
bear $29.58
base $55.77
bull $90.14
margin of safety $30.00
market price* $32.43
United Parks & Resorts operates the SeaWorld, Busch Gardens, Aquatica, Discovery Cove and Sesame Place theme and water parks, mostly in Orlando, Tampa, San Diego, San Antonio, Williamsburg and Langhorne, Pennsylvania. Revenue in 2025 was $1.66 billion: admissions of about $883 million plus food, merchandise and other in-park spending of about $779 million. The Sesame Place parks and Sesame Street lands run under a license with Sesame Workshop whose initial term runs through December 31, 2031, with automatic 15-year extensions. HOW WE MEASURE EARNINGS. We start from cash generated by operations, remove swings in working capital, subtract stock-based pay, and subtract capital spending. Because revenue fell in each of the last three years, all capital spending is treated as the cost of staying in business, including the portion the company labels expansion. On that basis owner earnings (after interest) were about $186 million in 2023, $234 million in 2024 and $207 million in 2025. Because this analysis values the business before its lenders and then subtracts what it owes, we add back cash interest paid ($146 million, $156 million and $134 million), giving cash produced by the business before paying lenders of about $333 million, $390 million and $341 million. We anchor on the 2023-2025 median of about $341 million, the period since capital spending settled at $217-305 million a year after the 2020 closures and the 2021-2022 reopening rebound, which we exclude as unrepresentative. WHAT IS HAPPENING. That business cash flow fell about 12.5% in 2025. Revenue fell 3.6%, attendance fell 1.8% to 21.2 million and admission revenue per guest fell 4.3% to $41.73 as international visitors and reseller tickets declined and promotions increased, while costs rose. The first half of 2026 was weaker again: revenue $761.6 million versus $777.2 million, operating income $108.6 million versus $157.4 million, and capital spending $138 million versus $110 million. Operating cash flow rose in the half only because more tickets were sold in advance, which is timing, not earnings. The company has also continued to buy back stock with borrowed money: $483 million in 2024, $160 million in 2025 and $220 million in the first half of 2026, cutting the share count to about 45.3 million while debt rose. DEBT. At June 30, 2026 the company owed about $2.29 billion of principal: a term loan of about $1.515 billion due December 4, 2031 (floating, about 5.7% at year-end 2025), $725 million of 5.25% notes due August 15, 2029, and roughly $50 million drawn on its $700 million revolving credit line, plus about $6 million of finance leases. Cash of $19 million is treated as needed to run the parks. The notes cost less than our 6% yardstick until 2029, which is worth about $15 million, so we count net debt at about $2.28 billion. Debt is roughly four times annual operating cash earnings before depreciation. WHAT CHANGED SINCE OUR PREVIOUS ANALYSIS. Three days ago we valued earnings after interest and did not subtract the debt, which implicitly assumed $2.3 billion of borrowing could be rolled forever on today's terms. We now value the parks before lenders and then subtract what is owed, so the debt, and the extra borrowing for buybacks this year, is fully charged. We also start the base case at the actual 2025 rate of decline rather than a milder one, because the first half of 2026 gave no sign of a turn. Together these lower the base case from $65 to about $56 and the bear case from $39 to about $30. The bull case rises from $80 to about $90 because the 2024 level it returns to is now measured before interest, while today's interest bill is lower than in 2024, and it is spread over about 3 million fewer shares. BASE CASE ($55.77 per share). Actual 2025 decline was 12.5%, and we assume the same 12.5% decline in 2026 (about $299 million), a further 3% in 2027 as attendance continues to slip (about $290 million), and flat thereafter in dollars. No growth is credited: new rides such as SEAQuest at SeaWorld Orlando, pricing and cost programs have not stopped revenue from slipping in 2023-2025, so they add nothing. Flat for the long run rests on parks that have operated and been reinvested in for decades, with that reinvestment charged in full. The business is worth about $4.84 billion, owes about $2.28 billion, leaving about $2.56 billion, or $55.77 on 45.8 million diluted shares. BEAR CASE ($29.58 per share). The first-half 2026 pattern, with operating income down about 31% and capital spending up, carries through the year: business cash flow falls 25% in 2026 to about $256 million, then 5% a year to about $220 million by 2029 and stays there. When the $725 million of notes mature in August 2029 they are refinanced about 2.5 percentage points more expensively for seven years because leverage has risen, adding about $87 million to what is owed. Interest of roughly $150 million remains covered about 1.5 times. The business is worth about $3.72 billion, owes about $2.37 billion, leaving about $1.36 billion, or $29.58 per share. BULL CASE ($90.14 per share). Attendance and per-guest spending stabilise: business cash flow is about $325 million in 2026, $360 million in 2027 and returns to the $390 million the company produced in 2024 with similar attendance, then holds flat. Nothing beyond an already-demonstrated level is credited. The business is worth about $6.41 billion, owes about $2.28 billion, leaving about $4.13 billion, or $90.14 per share. WHAT COULD MAKE THIS WRONG. Because debt is about half of the business's base-case value, each $10 million change in lasting annual cash flow moves the shares by about $3.60. A faster slide in international and reseller visitors, a second year of heavier capital spending, or more debt-funded buybacks would push values toward the bear case; a stabilisation of attendance would move them toward the bull case. Some of the $35-79 million a year labelled expansion spending may earn a return; if so, earnings are understated. We could not see the exact split of borrowings at June 30, 2026, and inferred the revolver draw from total principal.