Six Flags Entertainment Corporation (FUN): A Bull Case Theory

We came across a bullish thesis on Six Flags Entertainment Corporation on Value investing subreddit by mrmrmrj. In this article, we will summarize the bulls’ thesis on FUN. Six Flags Entertainment Corporation's share was trading at $23.45 as of September 12th. FUN’s trailing and forward P/E were 17.57 and 51.81 respectively according to Yahoo Finance.

Six Flags Entertainment (FUN) is widely considered a structurally weak business, burdened by its capital-intensive nature, weather dependence, and a stretched balance sheet. These issues are undeniable, yet the company’s current valuation sets up an unusually attractive risk/reward profile. Despite the heavy reinvestment required for new rides and the questionable value of acquisitions—since amusement parks remain inherently local—the stock is pricing in little to no return on capital.

Using EV/Total Capital as a baseline, the company trades at just 1x, compared to a historical range of 3–4x. There has been no fundamental shift in the business to justify this depressed multiple, suggesting significant upside potential if sentiment or operations improve. A key catalyst is Sachem Head, an activist hedge fund, which recently acquired a 4.8% stake. While its exact plan remains undisclosed, Sachem’s involvement historically signals an operational or strategic push that could unlock value. On the balance sheet, while debt metrics appear daunting, maturities are well-structured and do not present immediate refinancing risk. The first significant maturity is deferred until 2027, with the largest—a $1.4 billion bank loan—not due until 2031.

This timeline affords Sachem Head and management the breathing room to stabilize operations and pursue initiatives that could re-rate the stock. In the meantime, the market’s extreme discount reflects overly pessimistic expectations rather than structural insolvency. With catalysts in place, time to address leverage, and valuation multiples at historic troughs, Six Flags presents an asymmetrical investment opportunity with limited downside and meaningful upside potential.

Previously we covered a bullish thesis on Xponential Fitness, Inc. (XPOF) by Inflexio Research in February 2025, which highlighted the company’s strong franchise pipeline, governance restructuring, and discounted valuation relative to peers. The company’s stock price has depreciated approximately by 48.52% since our coverage. This is because short-seller concerns and market skepticism weighed on sentiment. The thesis still stands as Xponential’s backlog and international expansion underpin long-term growth. mrmrmrj shares a similar view but emphasizes the undervaluation and activist catalyst at Six Flags Entertainment (FUN).

Six Flags Entertainment Corporation is not on our list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 44 hedge fund portfolios held FUN at the end of the second quarter which was 48 in the previous quarter. While we acknowledge the potential of FUN as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.

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Disclosure: None.