In this clip from "The Rank" on Motley Fool Live, recorded on May 23, Motley Fool contributors Jason Hall, Zane Fracek, and John Bromels discuss Six Flags Entertainment's (SIX) rapid bounce back from pandemic-related revenue challenges in 2020, and why the legacy entertainment company's future looks bright.
Jason Hall: Six Flags, I think is probably one of the brands that is more impacted by consumer economic trends. But its durable moat is more about the assets themselves in terms of you're not going to build a competing theme park across the road from a Six Flags, because there's just a limited amount of market. Again, the idea is that most of these parks have been there 50, 60 years. They are there and they are in place and they are an asset that can generate meaningful cash flow if they're operated well. Again, I think that's where [CEO] Selim Bassoul coming in can be a real difference-maker for that company.
Zane Fracek: I just wanted to add that I just wanted to see how they did during the pandemic to test the resilience of the company. In 2020, they are hit hard. The revenue more than half, maybe more than quarter. But now in 2021 they actually beat 2019's revenue. Their comeback was like an absolute rocket. They got hit hard and boom, the people wanted to get on the rides pretty quickly.
John Bromels: Then it's worth noting, I think that this is in 2022, we don't have the numbers yet for the the-park-is-open season. A lot of the numbers we're seeing for 2022 are just like the pre-sales of passes and things like that. Nothing was open between January and March. The performance that they've been citing in that first quarter is actually pretty impressive.
Hall: Memorial Day is next Monday. That's the unofficial kick-off of the peak season for these companies.
