United Parks & Resorts Inc.

▲ Bull Case

• ◆Per-capita economics are compounding: In-park per-capita spending reached record $40.62 in Q1 2026 (+5.3% YoY); this 47% of revenue stream grows 2%+ annually independent of attendance, creating quiet profitability improvement even in flat attendance environment
• ◆Buyback math creates value at almost any EBITDA outcome: 10.2% diluted share count reduction in past year at $36–38/share creates ~30% EPS accretion (FY2026 consensus $3.85–$4.00 vs. FY2025 $3.06) even on modest EBITDA recovery; Hill Path retains board control and incentive to continue
• ◆Multiple re-rating from 7x to 8–8.5x EV/EBITDA adds $15–$25/share: PRKS has never sustainably traded below 8x EV/EBITDA when EBITDA exceeded $600M; modest restoration of execution credibility from one or two clean quarterly beats likely triggers even modest re-rating

▼ Bear Case

• ◆Epic Universe structural Orlando market share shift: Universal's largest park in 25 years creates genuine multi-day destination that SeaWorld cannot replicate; 7–10% permanent SeaWorld Orlando attendance loss would eliminate $40–55M EBITDA unrecoverable through per-capita growth alone
• ◆Leverage and revolver dependency mounting risk: At 3.5x leverage while funding $250M buybacks on $163M annual FCF, company is drawing revolver to repurchase shares; if EBITDA disappoints below $600M, leverage above 3.8–4.0x likely forces buyback program pause—removing primary per-share value creation mechanism
• ◆Admissions per-capita compression may be structural: Three-year decline from $44.16 (FY2023) to $41.73 (FY2025) reflects deliberate pass membership growth strategy; if admissions per-capita stabilizes at $41–43, total revenue per-capita is capped below prior peaks, limiting revenue recovery upside

“Core question: Is FY2025's $605M Adj EBITDA a cyclical trough or a structural floor? Bull consensus argues pass sales +12% and group bookings +50% are too strong to reflect structural impairment; FY2025 was convergence of temporary factors (international tourism decline, schedule missteps, pre-Epic uncertainty); management cost discipline commitments ($50M savings) and ERP benefits will deliver margin improvement; at 6–7x NTM EBITDA, stock prices zero recovery when leading indicators show recovery in progress. Bear consensus contends FY2025 miss was partly structural; Epic Universe is permanent supply addition; PRKS's pass-growth strategy is defensively strategic, lowering admissions per-capita; revolver-funded buybacks at 3.5x leverage prioritize per-share optics over balance sheet health; if EBITDA lands at $590–615M rather than $645M, stock moves lower. Resolution: Q2 2026 earnings (August 2026) covering first full summer with Epic Universe open and testing whether pass sales converted to actual attendance gains. Analyst consensus: 11 analysts, mean $50.82 target (41% upside), consensus Buy.”

• ◆Q2 2026 Earnings (August 2026): Summer peak season attendance data vs. expectations represents the definitive Epic Universe co-existence test; pass sales +12% and group bookings +50% create high bar for recovery thesis confirmation
• ◆Management's $50M Cost Savings Delivery: Operating expense improvements in H1 2026 from ERP system and optimized schedules would validate margin recovery narrative supporting FY2026E $645M EBITDA
• ◆Sponsorship Revenue Ramp ($30M+ target): Any disclosed sponsorship deals or progress toward $30M+ target would be pure EBITDA upside not in consensus; each $10M = ~$1.75/share equity value at 8x EV/EBITDA
• ◆Interest Rate Easing: Each 25 bps Fed cut saves ~$3.8M in annual interest (floating Term B-3); three cuts (75 bps) = ~$11.4M benefit = ~$0.25/share EPS accretion
• ◆Hill Path Capital Strategic Process: Potential sale process or take-private after 7+ year holding period would likely price at premium to intrinsic value
• ◆International Tourism Normalization: Weaker USD and eased US visa processing would recover $1–2/capita on admissions, driving 2–3% revenue benefit

• ◆Epic Universe Structural Impact (High): Orlando's ~75M annual theme park visits face new 20M capacity; SeaWorld Orlando as secondary destination most exposed; 7–10% permanent attendance loss eliminates $40–55M EBITDA
• ◆Hurricane Season FY2026 (Medium-High): Florida parks (~50% of revenue) face annual hurricane exposure; repeat of FY2024 impact during peak season would eliminate quarter of revenue and impair recovery
• ◆Consumer Discretionary Spending Slowdown (Medium): Tariff uncertainty and credit tightening could drive 5–10% attendance decline in recession scenario
• ◆Leverage and Revolver Dependency (High): If EBITDA disappoints below $600M, leverage above 3.8–4.0x likely forces covenant-driven buyback pause, removing primary per-share value driver
• ◆2029 Senior Notes Refinancing (Medium): $725M at 5.25% matures August 2029; refinancing at higher rates (~5.5–6.0%) creates $2–5M annual interest headwind
• ◆Animal Welfare Regulatory Change (Low-Medium): State legislation restricting marine mammal exhibits could constrain Discovery Cove operations; tail risk but precedent-setting via Orca Act
• ◆Admissions Per-Capita Structural Compression (Medium): If pass program growth continues without admission price increases, $41–43 per-capita becomes structural norm, capping recovery upside