Today, Cedar Fair, L.P. has released its 10-K report. Cedar Fair, L.P. owns and operates amusement and water parks, as well as complementary resort facilities. Its amusement parks include Cedar Point, Knott's Berry Farm, Canada's Wonderland, Kings Island, Carowinds, Kings Dominion, California's Great America, Dorney Park, Worlds of Fun, Valleyfair, Michigan's Adventure, Schlitterbahn Waterpark & Resort New Braunfels, and Schlitterbahn Waterpark Galveston. The company also owns and operates the Castaway Bay Indoor Waterpark Resort, Hotel Breakers, Cedar Point's Express Hotel, and Sawmill Creek Resort. Cedar Fair, L.P. was founded in 1983 and is headquartered in Sandusky, Ohio. As a result of these announcements, the company's shares have moved 1.5% on the market and are now trading at a price of $42.43.
In the 10-K report, Cedar Fair reported a net revenue of $1,798,668,000 for the year ended December 31, 2023, compared to $1,817,383,000 for the year ended December 31, 2022. The operating income for 2023 was $306,164,000, a decrease from $519,942,000 in 2022. The net income for 2023 was $124,559,000, a decrease from $307,668,000 in 2022. Attendance increased to 26,665,000 in 2023 from 26,912,000 in 2022.
Cedar Fair also announced a merger agreement with Six Flags on November 2, 2023, which is expected to close in the first half of 2024, subject to regulatory approvals and other customary closing conditions.
For more information, read the company's full 10-K submission here.
| 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | |
|---|---|---|---|---|---|---|
| Revenue (M) | $1,349 | $1,475 | $182 | $1,338 | $1,817 | $1,794 |
| Operating Margins | 22% | 21% | -315% | 11% | 28% | 18% |
| Net Margins | 9% | 12% | -325% | -4% | 17% | 8% |
| Net Income (M) | $127 | $172 | -$590 | -$49 | $308 | $147 |
| Net Interest Expense (M) | -$84 | -$98 | $151 | $184 | $152 | $142 |
| Depreciation & Amort. (M) | $156 | $170 | $158 | $149 | $153 | $155 |
| Diluted Shares (M) | 57 | 57 | 56 | 57 | 56 | 51 |
| Earnings Per Share | $2.23 | $3.03 | -$10.45 | -$0.86 | $5.45 | $2.87 |
| EPS Growth | n/a | 35.87% | -444.88% | 91.77% | 733.72% | -47.34% |
| Avg. Price | $50.99 | $49.06 | $32.18 | $44.94 | $49.42 | $42.51 |
| P/E Ratio | 22.66 | 16.09 | -3.09 | -52.26 | 9.13 | 15.02 |
| Free Cash Flow (M) | $161 | $72 | -$546 | $142 | $224 | $110 |
| CAPEX (M) | $190 | $331 | $129 | $59 | $183 | $215 |
| EV / EBITDA | 13.64 | 9.89 | -10.62 | 16.85 | 7.39 | 9.03 |
| Total Debt (M) | $3,315 | $2,153 | $2,954 | $2,519 | $2,268 | $2,273 |
| Net Debt / EBITDA | 7.2 | 4.11 | -6.22 | 8.27 | 3.22 | 4.44 |
| Current Ratio | 0.85 | 0.91 | 1.85 | 0.69 | 0.61 | 0.68 |
Based on the analysis of Cedar Fair's growth factors, it is evident that the company has witnessed robust revenue and earnings per share growth. However, the declining capital expenditures and the high PEG ratio indicate potential overvaluation. The PEG ratio exceeding 1 suggests that the market may be overestimating the company's growth potential, which raises concerns about the stock being overvalued at its current price.
In terms of value factors, Cedar Fair's current ratio of 0.68 indicates that the company's current assets are insufficient to cover its current liabilities. Moreover, the highly leveraged balance sheet, as indicated by the Net Debt/EBITDA ratio of 4.44, raises concerns about the company's financial health. Additionally, the free cash flow average over the last 5 years has decreased at a compounded annual growth rate of -1.1%, with significant year-on-year growth variability.
While the company has shown strong revenue and earnings growth, the declining capital expenditures and high PEG ratio raise concerns about the stock being overvalued. Furthermore, the company's financial health is a point of concern, given its insufficient current assets to cover liabilities and the highly leveraged balance sheet. Therefore, considering these factors, it is likely that Cedar Fair stock is overvalued at its current price of $42.43. Investors should approach with caution and conduct a thorough evaluation of the company's financial position before considering an investment.
