Here’s What Analysts Think Will Happen Next


A week ago, SeaWorld Entertainment, Inc. (NYSE:SEAS) came out with a strong set of second-quarter numbers that could potentially lead to a re-rate of the stock. Statutory revenue and earnings both blasted past expectations, with revenue of US$440m beating expectations by 30{478333fef289f17d569c76970834c08f92d608302faf6c452490324ee355f13f} and earnings per share (EPS) reaching US$1.59, some 446{478333fef289f17d569c76970834c08f92d608302faf6c452490324ee355f13f} ahead of expectations. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. Readers will be glad to know we’ve aggregated the latest statutory forecasts to see whether the analysts have changed their mind on SeaWorld Entertainment after the latest results.

See our latest analysis for SeaWorld Entertainment

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After the latest results, the ten analysts covering SeaWorld Entertainment are now predicting revenues of US$1.49b in 2021. If met, this would reflect a sizeable 70{478333fef289f17d569c76970834c08f92d608302faf6c452490324ee355f13f} improvement in sales compared to the last 12 months. Earnings are expected to improve, with SeaWorld Entertainment forecast to report a statutory profit of US$3.03 per share. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$1.27b and earnings per share (EPS) of US$0.77 in 2021. So we can see there’s been a pretty clear increase in sentiment following the latest results, with both revenues and earnings per share receiving a decent lift in the latest estimates.

Despite these upgrades,the analysts have not made any major changes to their price target of US$62.30, suggesting that the higher estimates are not likely to have a long term impact on what the stock is worth. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. Currently, the most bullish analyst values SeaWorld Entertainment at US$79.00 per share, while the most bearish prices it at US$47.00. These price targets show that analysts do have some differing views on the business, but the estimates do not vary enough to suggest to us that some are betting on wild success or utter failure.

Of course, another way to look at these forecasts is to place them into context against the industry itself. For example, we noticed that SeaWorld Entertainment’s rate of growth is expected to accelerate meaningfully, with revenues forecast to exhibit 191{478333fef289f17d569c76970834c08f92d608302faf6c452490324ee355f13f} growth to the end of 2021 on an annualised basis. That is well above its historical decline of 12{478333fef289f17d569c76970834c08f92d608302faf6c452490324ee355f13f} a year over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in the industry are forecast to see their revenue grow 20{478333fef289f17d569c76970834c08f92d608302faf6c452490324ee355f13f} per year. Not only are SeaWorld Entertainment’s revenues expected to improve, it seems that the analysts are also expecting it to grow faster than the wider industry.

The Bottom Line

The most important thing here is that the analysts upgraded their earnings per share estimates, suggesting that there has been a clear increase in optimism towards SeaWorld Entertainment following these results. Happily, they also upgraded their revenue estimates, and are forecasting revenues to grow faster than the wider industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.

Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year’s earnings. At Simply Wall St, we have a full range of analyst estimates for SeaWorld Entertainment going out to 2023, and you can see them free on our platform here..

You should always think about risks though. Case in point, we’ve spotted 2 warning signs for SeaWorld Entertainment you should be aware of.

This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.



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