FUN: 12.3% Trailing Cash Yield, 4.8% on This Year's Capex

No Buys of three votes cast. Six Flags needs three to enter a basket, so it does not.

Bottom line

Six Flags shows a 12.3% trailing free cash flow yield on a $1.22B market cap. That number does not survive the company's own 2026 capex guidance, the minimum distributions owed to outside partners, or the $367.2M due for a Georgia park in January 2027. On our fact sheet's terms the price needs about $126M of free cash flow in year three. The three seats that voted expect $37M on average, and we side with them. No note matures before October 2028, so no seat went further than that. The next test is the 10-Q for the peak summer quarter, due by about November 6, 2026.

Key takeaways

• The trailing yield is flattered. On this year's guided capex it drops to 4.8%, and to under 1% after the partners' share.
• Operating income does not pay the interest. Before impairments and the loss on park sales, it covers about two thirds of the bill.
• The accident happened at the one park with a fixed price on it. The Georgia buyout price ignores what the park now earns.
• Time is the asset on the other side. The revolver had $702.8M available at June 28, 2026.
• Three Avoids, three triggers. A watches peak-season demand, C the credit market, D spending per visit. B did not answer.

The business in 60 seconds

Six Flags Entertainment is the July 1, 2024, merger of Cedar Fair and the former Six Flags. It calls itself North America's largest regional amusement park operator (10-K, filed February 26, 2026). After selling seven parks this spring it runs 20 amusement parks, 14 water parks and nine resorts (10-Q, filed August 6, 2026). It reports one segment.

Money comes in at the gate, then from food, games and hotels. Fiscal 2025 attendance was 47.4 million visits at $61.90 a visit (10-K). About 70% of attendance and revenue falls in the second and third quarters, and the company says its main costs are relatively fixed for a season (10-Q).

Two flagship parks, Six Flags Over Georgia and Six Flags Over Texas, are consolidated but held through partnerships with outside limited partners (10-Q, Note 7). The fiscal 2025 loss was a $1,518.1M write-down of goodwill and trade names, taken after the peak season missed the company's expectations (10-K).

What changed

• A fatal ride incident. On October 12, 2026, one person died and several were injured on the Goliath roller coaster at Six Flags Over Georgia, according to a CNBC report the next day, citing local police. No 8-K has followed. Cause, liability and insurance cover are unknown.
• A quarter that reads two ways. Reported revenue fell 7.0% to $864.9M as sold and closed parks dropped out. On the company's Same-Park Basis revenue rose 2.4%, attendance rose 3.5% and spending per visit fell 0.8% (10-Q).
• Seven parks sold. They fetched $331.4M, a $37.8M loss to book (10-Q).
• Cheaper debt replaced with dearer. In January 2026 the company issued $1.0B of 8.625% notes due 2032 to redeem 2027 notes paying 5.375% and 5.500% (10-Q). That is about $32M more interest a year, by our arithmetic.
• Managers changed. Five 8-Ks reporting officer or director changes were filed between May 7 and July 2, 2026.

There is no revenue or earnings guidance. The 10-Q guides 2026 capex to $400M to $425M and cash interest to $300M to $320M.

The bull case on Six Flags

The parks that remain are doing better than the headline. Same-Park Adjusted EBITDA, the company's own measure, rose from $233.0M to $248.9M in the second quarter, and season-to-date pass sales were up 7% (8-K Exhibit 99.1, August 6, 2026). Investor C: "Some of the largest quarter is already banked." Equity is about a fifth of enterprise value, so a modest recovery in earnings lands on a small base. Investor A, arguing against its own Avoid: "Fixed costs cut both ways." There is also time. Investor C: "The restructuring narrative has no dated debt catalyst." Park sales are, in C's words, "a functioning funding valve". C reads short interest of 22.51% of shares (FINRA, September 30, 2026) as a crowded bet, not as value. A Bloomberg report of September 23, 2026, unconfirmed by the company, said an activist holder was again pressing the board to explore a sale.

The bear case on Six Flags

The merger has not produced the earnings it was sold on. Fiscal 2025 Adjusted EBITDA was $792.0M, and holders on a private value forum (unverified) had built their 2024 case on more than $1 billion. By our arithmetic net debt is 5.8 times trailing Adjusted EBITDA of $840.2M, and 6.5 times with the partnership obligations. Investor A: "Until operating earnings cover interest, every other link is an argument about how creditors fare, not owners." Investor D sees no room left: "The remaining growth runway is effectively exhausted." Investor C: "The company outspends itself and bridges with the revolver and disposals." With most of the year decided in two quarters, C adds: "One bad season is one bad year." The note indentures block dividends and buybacks while leverage is above 5.50 times, and the company says it is. Self-insurance reserves of $141.3M were set before this week's incident.

Valuation

What the price requires. The sheet the seats read discounts at 9.72%, the 10-year Treasury yield plus 4.5 points, with 3% growth from year eleven. Trailing free cash flow of $150.1M could then shrink 5.7% a year for a decade and still support the market cap, which is the $126M in year three. The base is the problem. Trailing operating cash flow less the midpoint of guided capex is about $59M, and from there the same arithmetic needs growth of about 7.1% a year and $72M in year three.

What the committee expects. Each seat set its own odds on three outcomes. The figures are free cash flow in year three.

We used the midpoint of each range. The average is below both versions of what the price needs. Every bear case burns cash. Only the bull cases clear the bar, and the highest odds any seat puts on one is 20%.

Equity against enterprise. Trailing free cash flow is 12.3% of market cap and about 2.5% of the $6.10B enterprise value. The 10-year Treasury pays 5.22%. We found the same gap between an equity yield and a whole-company yield in our Charter review. Investor A: "A buyer pays for cash flow after capex, and that is thin."

Our arithmetic from the filings. These sums are the desk's, not a seat's. Trailing operating income is a loss of $1,352M. Add back $1,557M of impairment and the loss on the park sale and it is about $242M, against about $377M of net interest. The $59M is before roughly $50M a year of minimum distributions to outside partners. Claims due by July 2029 come to about $1.41B, more than the market cap: Georgia, a Texas partnership interest carried at $239.7M, and $800M of notes. On entry, A wants debt with the partnership obligations under 4.0 times Adjusted EBITDA and interest covered twice. C named enterprise value at or under 6.0 times Adjusted EBITDA, against about 8.0 times now. D wants under 5.0 times.

Comparables

Source: each company's own filings on SEC EDGAR and the Yahoo Finance price, computed the same way for every row. EV is market cap plus net debt.

Six Flags, Dave & Buster's and Lucky Strike lost money over the trailing year, so none has a P/E. Six Flags' operating income is negative after the write-down, which blanks its operating income multiples. The comparison gave no other multiples for Dave & Buster's or Lucky Strike, with no reason beyond the loss. Return on capital was complete only for Vail. In the Six Flags row the 14.4% growth is the merger and the margin is the impairment.

United Parks is the nearest business, and it earns a 22.0% operating margin on a similar cash flow multiple. The difference is the weight above the equity. Six Flags' enterprise value is five times its market cap, against about two and a half times at United Parks. The destination parks of the large media groups are not filed separately.

Key risks

We ranked these. The Raised by column says who named each one.

The filings settle near-term liquidity: the company states it can meet its obligations for at least a year from August 6, 2026. They do not settle Texas, where the company declined its buyout option and the partnership ends in 2028.

What to watch

Owning it onchain

One tokenized version of Six Flags exists, and it is not investable today.

• Backpack FUN.US. Mint FUNawcDwaH2SqxkvNDjhSqkSYccjFw1xNZXXWgTCm3fF. The issuer describes it as tokenized equity under a Backpack and Trek Nexus Markets Ltd trust. On October 12, 2026, Jupiter had not verified it and deposits and withdrawals were off, so no round-trip cost was measured.

We found no xStocks version. xStocks says its tokens are not offered in the United States or to US persons. Sunrise blocks users in the United States and Canada from Backpack's tokens.

This is not a recommendation on the token or the share.

The committee record

Data

Method. Four investors with different philosophies read one identical fact sheet built from SEC filings and verified news, and vote independently, each on a different AI model. Today Investor B returned no answer, so three votes were cast on three models. A name needs three Buys to enter a basket. A non-voting analyst wrote the business breakdown and risk register, and the desk added context cited from the filings.

As of October 13, 2026, BagsCapital manages no outside capital and holds no position in Six Flags. Nothing here is investment advice.