# United Parks & Resorts Inc. (PRKS)

**Exchange:** NYSE  
**Coverage as of:** 2026-Q2  
**Updated:** 2026-05-27  
**Report type:** Primer (steps 1–3 of 19)  
**API endpoint:** GET /api/v1/research/PRKS/primer

## Business Model

---
source: coverage-next-full
ticker: PRKS
company: United Parks & Resorts Inc.
step: 01
title: Business Model Overview
created: 2026-05-27
---

### Step 01 — Business Model Overview: United Parks & Resorts Inc. (PRKS)

#### Key Findings
- **Net assessment: Positive** — PRKS operates a multi-brand, multi-park platform with three distinct economic tiers (destination, mid-tier, premium day experience), generating high recurring revenue through season passes and genuine pricing power on in-park spending.
- Hill Path Capital's 56.9% ownership concentrates governance but aligns management with financial return maximization including share buybacks [S4].
- The portfolio's diversity (marine, African wildlife, children's IP, water parks) creates cross-visitation opportunities and reduces single-park weather/event risk.
- Discovery Cove is a unique asset with near-impossible replication — capacity-constrained, regulatory-moated, and priced at 5–10x a standard theme park visit.

#### Implications for Thesis and Valuation
The business model is well-suited to generate high cash flow per dollar of invested capital in good years. The critical valuation question is whether the FY2025 Adj EBITDA margin of 36.4% is a floor, a trough, or a new normal. Management's explicit cost-improvement commitment and the per-capita spending trend suggest trough; competitive pressure from Universal Epic Universe in Orlando suggests caution.

#### Objective
Map the complete value chain, revenue ecosystem, brand portfolio, and ownership structure of PRKS to establish the qualitative business context for financial analysis.

#### Narrative Analysis

##### Corporate History and Rebranding
SeaWorld Parks & Entertainment was founded in 1959 as a single San Diego marine park. Following a private equity buyout and IPO in 2013 (NYSE: SEAS), the company navigated years of controversy following the 2013 Blackfish documentary and subsequent attendance decline. The recovery began in 2019, accelerated through COVID-era portfolio optimization, and culminated in the 2024 corporate rename to United Parks & Resorts Inc. (NYSE: PRKS) — distancing the brand from SeaWorld's reputational baggage while preserving the SeaWorld park brand identities. [S1]

##### Value Chain Layer Map

**Layer 1 — Asset Base (Park Real Estate & Rides)**
PRKS owns or long-term leases significant land parcels. SeaWorld San Diego operates on a ~190-acre City of San Diego lease covering ~17 acres of water in Mission Bay — the most valuable land position in the portfolio. SeaWorld Orlando (279 acres) is in Florida's densest theme park corridor. Capital-intensive: net PP&E ~$1.5B. [S1]

**Layer 2 — Attraction & Show Programming**
New rides and attractions ($217.5M CapEx in FY2025, $248M in FY2024) drive incremental attendance. FY2025 highlights: Expedition Odyssey (SeaWorld Orlando), Rescue Jr. realm (San Antonio), Catapult Falls (world-first launched flume coaster). FY2026 pipeline includes SEAQuest Legends of the Deep (Orlando), Barracuda Strike (San Antonio, Texas' first inverted family coaster), Lion & Hyena Ridge (Tampa), Verbolten Forbidden Turn (Williamsburg). [S3]

**Layer 3 — Animal Collection & Shows**
~42,000+ animals rescued over PRKS history; active rescue operations year-round. Zoological collection is among the world's largest. Educational shows (dolphin, orca, sea lion) drive differentiation. Regulatory compliance (USDA, APHIS, ESA, Marine Mammal Protection Act) creates both cost (compliance) and barrier (competitors cannot easily replicate). [S1]

**Layer 4 — Admissions Monetization**
Three ticket products with different economics:
- Single-day tickets: highest admission per-capita; price-sensitive but captures tourists
- Season/annual passes: lower implied per-visit rate but drives frequency and loyalty; monthly payment options smooth cash flow
- Premium products: Discovery Cove (~$250–$350+/day), Sesame Place, reserved seating upgrades

**Layer 5 — In-Park Revenue**
F&B, merchandise, parking, premium experiences (front-of-the-line passes, photo packages), hotel (Aquatica). In-park per-capita reached $36.81 in FY2025 (record), growing consistently +2–3%/year. This is the high-margin, low-capex growth vector. [S1]

**Layer 6 — Brand Licensing (Abu Dhabi)**
Zero-capex international revenue stream. SeaWorld Abu Dhabi, operated by Miral Destinations, opened 2023 under a licensing arrangement — royalty/fee income for PRKS with no capital at risk. Terms not fully disclosed in filings.

##### Park Portfolio by Economic Tier

**Tier 1 — Destination (Fly-in, international draw)**
| Park | Location | Key Differentiator |
|------|----------|------------------|
| SeaWorld Orlando | Orlando, FL | Marine education + thrills, Florida tourism hub |
| Busch Gardens Williamsburg | Williamsburg, VA | Most Beautiful Theme Park (35yr award) |
| Discovery Cove | Orlando, FL | Ultra-premium swim-with-dolphin; 2,000/day cap |

**Tier 2 — Regional Destination (Drive-market, 2-3 hour radius)**
| Park | Location | Key Differentiator |
|------|----------|------------------|
| SeaWorld San Diego | San Diego, CA | Marine science, ranked top-20 NA |
| SeaWorld San Antonio | San Antonio, TX | Largest marine park by acreage (397 acres) |
| Busch Gardens Tampa Bay | Tampa, FL | African wildlife habitat, thrill coasters |
| Sesame Place Philadelphia | Langhorne, PA | Children's IP, family-only |
| Sesame Place San Diego | San Diego, CA | Children's IP (opened 2022) |

**Tier 3 — Water Parks (Seasonal, day-trip)**
| Park | Location | Notes |
|------|----------|-------|
| Aquatica Orlando | Orlando, FL | SeaWorld-themed water park |
| Aquatica San Diego | San Diego, CA | Seasonal |
| Adventure Island | Tampa, FL | Busch Gardens Tampa adjacent |
| Water Country USA | Williamsburg, VA | Busch Gardens Williamsburg adjacent |

##### Revenue Model and Economics

FY2025 Revenue Split: [S1]
- Admissions: $883.4M (53.1%)
- Food, Merchandise & Other: $779.2M (46.9%)
- Total: $1,662.6M

The dual-stream model is important: in-park revenue can grow even when admissions is flat/down (demonstrated in FY2025: admissions -6.0% but in-park per-capita +1.0%). This provides some pricing lever independent of attendance.

**Seasonality:** Q3 is the peak quarter (summer, school vacations); Q1 is the weakest. Florida parks and year-round-open parks partially offset summer/school seasonality of mid-Atlantic/Northern parks. The 13-park portfolio across 7 states provides geographic diversification vs. a single-market operator.

##### Ownership Structure
- Hill Path Capital LP (Scott Ross, Managing Partner): ~56.9% of O/S — controlling shareholder since 2019 [S4]
- Management and board compensation aligned with financial return maximization (buybacks, margin improvement)
- Stockholders Agreement gives Hill Path up to 3 board seat designees; Chairman Scott Ross is a Hill Path partner
- This PE-adjacent ownership style means capital allocation is shareholder-return focused — but also that minority shareholders have limited governance influence

##### Capital Allocation Philosophy
Management explicitly prioritizes: (1) maintaining parks, (2) growth CapEx in high-return new attractions, (3) debt management, (4) share repurchases when stock trades below perceived intrinsic value. Per Q4 2025 earnings: 6.7M shares repurchased in 2025 + early 2026 = ~12% of total shares, at average prices ~$34–38/share. [S3]

#### Evidence and Sources
All financial figures from 10-K FY2025 and 8-K earnings release. Park descriptions from 10-K business description section. Governance from 2026 DEF 14A proxy.

*Note: Transcript analysis was not performed — this is the filings-and-consensus path per coverage-next-full methodology.*

#### Assumption Register Updates
- A09 (Hill Path 56.9% ownership) confirmed from proxy [S4]
- A12 (General Corporate sector track) confirmed by business model analysis

#### Tables and Calculations

##### Revenue Bridge FY2024 → FY2025

| Item | FY2024 ($M) | FY2025 ($M) | Change ($M) | Change (%) |
|------|-------------|-------------|------------|-----------|
| Admissions | 939.6 | 883.4 | -56.2 | -6.0% |
| Food/Merch/Other | 785.7 | 779.2 | -6.5 | -0.8% |
| **Total Revenue** | **1,725.3** | **1,662.6** | **-62.7** | **-3.6%** |
| Attendance (M) | 21.547 | 21.169 | -0.378 | -1.8% |
| Admissions/capita ($) | 43.61 | 41.73 | -1.88 | -4.3% |
| In-park/capita ($) | 36.46 | 36.81 | +0.35 | +1.0% |
| Total rev/capita ($) | 80.07 | 78.54 | -1.53 | -1.9% |

##### Brand Matrix and Positioning

| Brand | Parks (US) | Theme | IP Ownership | Annual Capacity (est.) |
|-------|-----------|-------|-------------|----------------------|
| SeaWorld | 3 | Marine / Wildlife | Self-owned (60yr) | ~13–15M visits |
| Busch Gardens | 2 | African/European wilderness | Self-owned | ~5–6M visits |
| Discovery Cove | 1 | Ultra-premium swim-with | Self-owned | ~700K cap |
| Sesame Place | 2 | Children's Sesame Street | Licensed from PBS | ~1.5–2M visits |
| Aquatica | 3 | Water park | Self-owned | ~3–4M visits |
| Adventure Island | 1 | Water park | Self-owned | ~1M visits |
| Water Country USA | 1 | Water park | Self-owned | ~1M visits |

#### Open Questions and Data Gaps
1. Abu Dhabi licensing fee revenue not broken out — material if sponsorship grows to $30M+ target
2. Hotel revenue (Aquatica properties) not separately disclosed
3. Pass renewal rates and pass revenue as % of admissions not formally disclosed

#### Source Index
| Source Tag | Document | Section | Date | Notes |
|-----------|---------|---------|------|-------|
| [S1] | 10-K FY2025 | Business Description, MD&A | 2026-03-03 | Revenue, parks, employees |
| [S2] | 10-K FY2024 | Business Description | 2025-03-03 | Historical context |
| [S3] | 8-K Q4 2025 Earnings | Exhibit 99.1 | 2026-02-26 | 2026 attractions, repurchases |
| [S4] | DEF 14A 2026 Proxy | Hill Path Stockholders Agreement | 2026-04-30 | Ownership, governance |
| [S5] | StockAnalysis.com/prks | Financial Summary | 2026-05-27 | Historical revenue |

## Financial Snapshot

---
source: coverage-next-full
ticker: PRKS
company: United Parks & Resorts Inc.
step: 04
title: Financial Snapshot & Adversarial Sweep
created: 2026-05-27
---

### Step 04 — Financial Snapshot & Adversarial Sweep: United Parks & Resorts Inc. (PRKS)

#### Key Findings
- **Net assessment: Mixed** — PRKS generates strong operating cash flows ($380M in FY2025) but carries a heavily leveraged balance sheet ($2.15B net debt, negative equity -$436M) that is the primary financial risk. Earnings quality is reasonable though Adj EBITDA adds back a substantial $239M in non-cash/non-recurring items.
- The adversarial sweep identifies two key concerns: (1) animal welfare litigation risk is ongoing and under-discussed in financial press, (2) the aggressive buyback program at elevated debt levels has concentrated financial risk if earnings don't recover.
- No material accounting fraud or restatement risk identified. Financial quality is adequate for investment analysis.

#### Implications for Thesis and Valuation
The negative book equity (-$436M) and 3.5x net leverage are not immediate solvency concerns given $625M Covenant EBITDA coverage and no debt maturities until 2029. However, the combination of limited financial flexibility and competitive pressure from Epic Universe means execution risk is elevated. A 15-20% EBITDA decline from current levels would materially strain covenant compliance.

#### Objective
Assess statement quality, earnings adjustments, balance sheet adequacy, and perform the Adversarial Research Sweep.

#### Narrative Analysis

##### Income Statement Quality

**Revenue Recognition:** PRKS recognizes admissions revenue based on attendance (visits used). Season/annual passes are recognized over the period of use. Monthly pass installments create deferred revenue that is recognized as visits occur. This is standard and conservative — no revenue pull-forward concern identified. [S1]

**Adj EBITDA Adjustments — Scrutiny:**
FY2025 Adj EBITDA adds $239.1M back to GAAP EBITDA ($540M) to get $605M Adj EBITDA. [S3]

| Add-back Category | FY2025 ($M) | FY2024 ($M) | FY2023 ($M) | Assessment |
|------------------|-------------|-------------|-------------|------------|
| Equity-based comp | 17.8 | 14.6 | 18.0 | Recurrent — should be treated as cost |
| Asset disposal/non-cash | 29.0 | 33.4 | 31.6 | Includes $17.5M self-insurance adjustments; recurrent |
| Business optimization | 15.1 | 18.4 | 33.9 | Declining but recurrent 3yr; quality concern |
| COVID/legal/other | 2.8 | (3.0) | 9.1 | Noisy; COVID-era reversals |
| Other adjustments | 0.7 | 6.5 | 5.2 | Assorted |

**Quality concern:** Asset disposal ($29M) and business optimization ($15M) add-backs have been recurring for 3+ years — these are not truly one-time. Adjusted for these, "true" normalized EBITDA may be closer to $560-580M — a more conservative view than management's $605M Adj EBITDA.

**SBC $17.8M (FY2025):** Real economic cost; excluded from Adj EBITDA per industry convention. As a % of total revenue: 1.1% — relatively modest.

**D&A vs. Maintenance CapEx:** D&A is $174.5M; "Core" CapEx (maintenance + ride upkeep) is $182.4M. These are roughly in line, suggesting D&A is adequate to reflect the true economic cost of asset consumption. [S1]

##### Balance Sheet Quality

**Negative Equity (-$435.8M at Dec 31, 2025):** Not a solvency indicator in isolation — caused by aggressive share buybacks ($1,988M in treasury stock at cost). Assets ($2,616M) > Liabilities in terms of economic value, but GAAP book is negative due to accumulated treasury shares. This is a common structure for levered-buyout-originated companies with aggressive buyback programs. [S1]

**Intangible Assets:** ~$117M in the balance sheet from indefinite-lived tradenames (SeaWorld, Busch Gardens, Discovery Cove). No amortization, no impairment taken in FY2023-2025. No red flag. [S1]

**Deferred Revenue ($143.3M at Dec 31, 2025):** From season pass and multi-visit ticket sales. This is a liability representing future park visits already paid — i.e., a quality liability (creates attendance). Up from $152.7M at Dec 31, 2024 — slight decline, potentially reflecting slightly lower advance pass sales in 2025. Q1 2026 deferred revenue: $203.8M (up 4.1% vs. March 2025) — good leading indicator. [S1][S8]

**Working Capital:** Theme parks have negative working capital (pass holders pay upfront; deferred revenue is current liability). Net current assets excluding cash and deferred: approximately -$200M. This is normal for the business model. [S1]

##### Cash Flow Quality

**Operating Cash Flow ($380M FY2025 vs. $480M FY2024):** The $100M decline is concerning. Driver: "changes in working capital" per filing — primarily higher cash interest payments (floating rate debt impacted earlier quarters before Dec 2025 refinancing lowered rate to 5.72%) and higher income taxes. Not a structural concern but a watch item for FCF trajectory. [S1]

**CapEx Quality:**
- Core CapEx ($182.4M): Park maintenance, ride replacements, infrastructure. Represents ~11% of revenue — in line with industry.
- Growth CapEx ($35.1M): New attractions with defined ROI projects.
- 2026 Guidance: ~$225M total ($175M core + $50M growth). [S1][S3]

---

#### ADVERSARIAL RESEARCH SWEEP

##### Finding 1 — Blackfish Legacy and Animal Welfare Litigation Risk
**Source:** Industry press, SEC risk factors [S6]
**Severity: MODERATE-HIGH**

The 2013 Blackfish documentary created lasting reputational damage to SeaWorld's orca operations. While the company eliminated theatrical orca shows in 2016-2018 and has since pivoted to conservation-focused messaging, the regulatory and litigation risk has not disappeared. Key ongoing vectors:
- California Legislature has periodically considered bills to restrict dolphin-swim interactions (which would directly impact Discovery Cove operations in any California expansion and set precedent for regulatory risk nationwide)
- PETA and other groups periodically file complaints with USDA/APHIS regarding animal treatment — creating regulatory scrutiny and media attention
- Federal Marine Mammal Protection Act continues to evolve; permits for public display of marine mammals face ongoing legal challenges from activist groups

**Financial impact if Discovery Cove swim-with-dolphin program is restricted:** ~$30-50M revenue impact estimate (Discovery Cove ultra-premium experience is the highest per-capita product in portfolio).

##### Finding 2 — Aggressive Buybacks at Elevated Leverage
**Source:** 10-K FY2025, 8-K earnings [S1][S3]
**Severity: MODERATE**

PRKS repurchased $157M in FY2025 and $93M in Q1 2026 (through March) while carrying $2.15B net debt and generating only $163M in FCF for FY2025. This means buybacks significantly exceeded FCF — the gap was funded by revolving credit (note: PRKS drew $80M on revolving facility post-YE 2025 per filing disclosure). [S1]

- Net leverage: ~3.5x (FY2025 Adj EBITDA)
- Debt covenants: Covenant EBITDA ($625M) must stay above levels that maintain required ratios; if Adj EBITDA falls to $550M, leverage would reach ~3.9x — approaching discomfort zone
- Board and Hill Path are explicitly approving buybacks, suggesting confidence in earnings recovery — but the financial math is tight

##### Finding 3 — Operating Schedule Changes and "Execution Failures"
**Source:** Q4 2025 earnings release [S3]
**Severity: MODERATE**

Management explicitly acknowledged in the Q4 2025 press release: "we should have delivered better results, particularly on the cost side of the income statement" and referenced "less than optimal execution." This candor is noteworthy — the 2025 EBITDA decline was attributed to both external factors (weather, international tourism) and internal factors (operating schedule changes, cost management). This creates investor uncertainty about whether management can achieve its FY2026 recovery targets.

##### Finding 4 — Sesame Workshop IP Concentration Risk
**Source:** 10-K FY2025 risk factors [S1]
**Severity: LOW-MODERATE**

Sesame Place parks (Philadelphia and San Diego) depend on the Sesame Street IP license from Sesame Workshop. If the license is not renewed or materially renegotiated, the concept value of these parks would be impaired. License terms not fully disclosed; no history of non-renewal concerns. The risk is real but low probability based on long-standing relationship.

##### Finding 5 — Tariff/Supply Chain Risk on New Ride Equipment
**Source:** 10-K FY2025 risk factors [S1]
**Severity: LOW**

PRKS's growth CapEx depends on procuring ride and attraction equipment from foreign manufacturers (European, Japanese coaster manufacturers). New US tariffs on imported goods (Trump administration tariffs, 2025-2026) could increase the cost of new attractions by 10-25% on the growth CapEx portion ($35-50M/year). On $50M growth CapEx, a 15% cost increase = ~$7.5M incremental cost. Manageable but directionally negative.

##### No Material Accounting or Fraud Concerns Identified
- No restatements in reviewed filing period
- No going concern language in auditor report
- Audit firm: Not explicitly identified in our data pull; major public company implies Big Four
- Material weakness: PRKS disclosed and remediated a previously identified material weakness in prior years; no active material weakness in FY2025 filing

#### Assumption Register Updates
- A17 (FCF $162.6M) confirmed [S1]
- A18 (net leverage 3.5x) computed

#### Tables and Calculations

##### Earnings Quality Bridge — GAAP vs. Adj EBITDA

| Item | FY2025 ($M) | FY2024 ($M) | Assessment |
|------|------------|------------|------------|
| GAAP EBITDA | 539.9 | 626.7 | Verifiable |
| + Equity comp (SBC) | 17.8 | 14.6 | Real cost; convention add-back |
| + Asset disposal/insurance | 29.0 | 33.4 | Partly recurrent |
| + Business optimization | 15.1 | 18.4 | Partly recurrent (3yr avg) |
| + COVID/legal/other | 3.7 | (3.0) | Noisy |
| **Adj EBITDA (mgmt)** | **605.1** | **700.2** | Per management definition |
| Less: recurrent "one-times" | (22.0) | (25.0) | Normalize recurrent add-backs |
| **Conservative EBITDA** | **~583** | **~675** | [Estimate, Judgment] |

##### Balance Sheet Summary (Dec 31, 2025)

| Asset | $M | Liability | $M |
|-------|----|-----------|----|
| Cash | 99.8 | Current debt | 15.4 |
| PP&E (net) | ~1,500 | Term B-3 Loans | 1,523.0 |
| Intangibles | ~117 | Senior Notes | 725.0 |
| ROU assets | ~200 | Lease liabilities | 148.9 |
| Other | ~700 | Deferred revenue | 143.3 |
| | | Other liabilities | 496.5 |
| **Total Assets** | **2,616** | **Total Liabilities** | **3,052** |
| | | **Stockholders Deficit** | **(436)** |

##### Adversarial Risk Summary

| Risk | Probability | Severity | Overall |
|------|------------|---------|---------|
| Animal welfare litigation (Discovery Cove) | Medium | High | Medium-High |
| Buyback-driven leverage creep | Medium | Medium | Medium |
| Execution/cost management failures | Medium-High | Medium | Medium-High |
| Sesame IP concentration | Low | Low-Medium | Low |
| Tariff/supply chain on CapEx | Low-Medium | Low | Low |

#### Open Questions and Data Gaps
1. Auditor identity and audit opinion in full filing (not extracted; assumed clean)
2. Exact insurance and litigation reserve amounts in balance sheet
3. Covenant financial ratio calculations (not fully extracted from Note 11)

#### Source Index
| Source Tag | Document | Section | Date | Notes |
|-----------|---------|---------|------|-------|
| [S1] | 10-K FY2025 | Financial Statements, MD&A, Risk Factors | 2026-03-03 | All balance sheet, income statement |
| [S2] | 10-K FY2024 | MD&A | 2025-03-03 | Comparative year data |
| [S3] | 8-K Q4 2025 | Adj EBITDA reconciliation | 2026-02-26 | Non-GAAP analysis |
| [S4] | DEF 14A | — | 2026-04-30 | — |
| [S5] | StockAnalysis.com | Balance sheet | 2026-05-27 | — |
| [S6] | Web search | Adversarial research | 2026-05-27 | Animal welfare, litigation |
| [S8] | 10-Q Q1 2026 | Balance sheet | 2026-05-11 | Deferred revenue update |

## Recent Catalysts

---
source: coverage-next-full
ticker: PRKS
company: United Parks & Resorts Inc.
step: 12
title: Bull/Bear — Analyst Debate
created: 2026-05-27
---

### Step 12 — Bull/Bear Analyst Debate: United Parks & Resorts Inc. (PRKS)

#### Key Findings
- **Net assessment: Mixed** — The investment debate centers on whether FY2025's $605M Adj EBITDA is a cyclical trough or a structural floor. Bulls see a path to $650-700M in FY2026 on attendance recovery and cost discipline; bears see persistent competition and leverage risk limiting recovery.
- The most differentiated bullish view is the per-share math: even flat absolute earnings translate to significant EPS growth as share count compresses toward 45M by end of 2026.
- The most differentiated bearish view is that Epic Universe may permanently reduce SeaWorld Orlando market share and the 2023-2024 Adj EBITDA level ($700-713M) is not repeatable.

*Note: Earnings transcript analysis was not performed per the coverage-next-full path. The analyst debate is inferred from SEC filings, press releases, consensus data, and news coverage. No management Q&A from earnings calls was reviewed.*

#### Implications for Thesis and Valuation
At ~$39/share (~6-7x NTM Adj EBITDA), PRKS is priced for limited recovery. The multiple is at the bottom of the historical range. If the bull case materializes (EBITDA $650M+, attendance recovery), the stock should re-rate to $50-55 (8x forward EBITDA). If the bear case persists (EBITDA $560-580M, continued attendance decline), the stock could fall to $28-33 (5-6x trough EBITDA with leverage concern premium).

#### Objective
Define the bull and bear cases, synthesize the analyst debate as reconstructed from filings and press sources, and provide the structured bull/bear bullet summary required for downstream synthesis.

#### Narrative Analysis

##### The Investor Debate

**Core disagreement:** Is FY2025 a trough from which PRKS recovers, or is it evidence of structural impairment requiring a permanent valuation reset?

**Context:** At ~$39/share (May 2026 estimate) and with analyst consensus targets of $37–$54 (mean $43.70), the market is pricing in modest recovery but not a full return to peak EBITDA. The wide target range ($37-$54) reflects genuine uncertainty about the key variables.

---

##### Bull Case Arguments

**Bull 1: Per-Share Math Is Compelling — Buyback Compounding**
Even if absolute EBITDA stays flat at $600-605M, aggressive buybacks (reducing share count from 55M in FY2025 to potentially 43-45M by end FY2026) create significant per-share EPS growth. FY2026 EPS of $3.85-$4.00 (consensus) on ~47M shares vs. $3.06 in FY2025 on 55M shares — a 26% EPS increase — can be driven by the buyback alone. Hill Path Capital (56.9% owner) has every financial incentive to continue aggressive buybacks; the program has $398M remaining authorized. Management has repurchased 6.7M shares (~12% of O/S) in just 15 months. [S1][S5]

**Bull 2: Pass Sales Signal H2 2026 Recovery**
Pass sales up ~10% in Q1 2026 and +12% through April 30, 2026, directly predict future attendance. Pass holders are committed customers — their summer visits are essentially pre-booked. Group bookings pacing +50% suggest corporate event and group business is strengthening. Deferred revenue of $203.8M at March 31, 2026 (up 4.1% vs. March 2025) represents future visits already sold. If these indicators materialize into attendance, Q2-Q3 2026 will be meaningfully positive vs. H2 2025 comparisons. [S8]

**Bull 3: Cost Reset + Sponsorship Growth = Margin Upside**
Management committed to $50M gross cost savings in 2026 via operational efficiency and ERP system benefits. If achieved on $1.72B revenue, operating expenses fall proportionally, expanding margins back toward 38-40% from 36.4%. Additionally, the sponsorship business is identified as a "$30M+ revenue opportunity in the coming years" — currently very small, this could add 1-2% to revenues with high incremental margin. FY2026 Adj EBITDA of $640-680M is achievable under this scenario. [S3]

---

##### Bear Case Arguments

**Bear 1: Epic Universe Is a Structural Headwind, Not Cyclical**
Universal's Epic Universe (opened May 2025) adds an estimated 50,000+ daily guest capacity to Orlando. Unlike prior Universal expansions that drew incremental visitors, Epic Universe opened during a period when overall Orlando tourism was not growing rapidly. SeaWorld Orlando sits adjacent to Disney's ecosystem — visitors choosing between Disney + Universal and SeaWorld may increasingly choose Disney + Universal as both now offer multi-day content without needing a third park. The multi-year nature of this shift may not be visible until FY2026-2027 data accumulates. [S6]

**Bear 2: Admissions Per-Capita Compression Has Multiple Causes, Not Just Cyclical**
Admissions per-capita fell from $44.16 (FY2023) to $41.73 (FY2025) — a $2.43 or 5.5% decline over two years. The stated causes (promotional activity, pass mix shift, less international tourism) are legitimate but the trajectory is concerning. Pass products inherently lower per-visit admission revenue as they grow as a share of the mix; pass growth of 10-12% means this structural headwind accelerates. A pass-heavy attendance base has lower admission per-capita but potentially higher frequency — but the frequency benefit is unproven in PRKS's disclosed metrics. [S1]

**Bear 3: Leverage and Buyback Pace Are Unsustainable If EBITDA Doesn't Recover**
At 3.5x net leverage and $162M FCF (FY2025), PRKS spent more on buybacks ($157M FY2025 + $93M Q1 2026 alone) than it generated in FCF. This gap was funded by revolver draws. If FY2026 EBITDA stays at $580-610M (not recovering materially), FCF remains ~$150-175M while buybacks continue at $200-300M/year — leverage climbs toward 3.8-4.0x. At some leverage threshold, management must choose between buybacks and balance sheet risk. The market may begin pricing in a forced buyback pause, removing the key per-share EPS growth driver. [S1][S8]

---

#### Bull Case — 3 Bullets

1. **Buyback compounding makes the per-share thesis independent of EBITDA recovery:** At 12%+ annual share count reduction, EPS grows 15-20%+ even on flat net income — the math alone justifies the current price and the $50+ target if the buyback continues.
2. **Pass sales and deferred revenue indicate H2 2026 inflection:** Pass sales up 12% through April 30 and group bookings pacing +50% provide the strongest forward-looking evidence that attendance weakness is cyclical (weather + international) and is reversing.
3. **$50M cost savings + sponsorship growth can re-expand margins to 38-40%:** Management has both the motivation (below-expectations FY2025 admission) and the tools (ERP system, cost reset) to deliver margin recovery, potentially adding $40-70M to Adj EBITDA even on modest revenue growth.

#### Bear Case — 3 Bullets

1. **Epic Universe may permanently shift Orlando tourism equilibrium against SeaWorld:** Unlike prior Universal expansions, Epic Universe adds 5 worlds of IP-rich content that fundamentally increases the time and money required for a Universal-focused Orlando trip, displacing days that would have been spent at SeaWorld or Discovery Cove.
2. **Admissions per-capita structural compression makes the $80+/capita revenue threshold harder to reach:** Pass mix growth mechanically compresses admission per-capita; if passes are 60%+ of attendance by FY2027, admission per-capita may settle at $39-41 even with full international recovery, permanently below the $44+ peak.
3. **3.5x leverage + aggressive buybacks create a fragile financial position:** If EBITDA stays near trough or deteriorates further, the company faces a binary choice between pausing buybacks (removing the key EPS growth driver) or risking covenant breach — both outcomes would be negative catalysts.

#### Assumption Register Updates
- A24 (FY2026 Adj EBITDA recovery range $620-680M) established based on bull/bear analysis

#### Open Questions and Data Gaps
1. Epic Universe actual attendance ramp — Q2/Q3 2026 data will be critical
2. Pass mix as % of total attendance — not disclosed; key to admissions per-capita outlook

#### Source Index
| Source Tag | Document | Section | Date | Notes |
|-----------|---------|---------|------|-------|
| [S1] | 10-K FY2025 | MD&A, Risk Factors, Note 12 | 2026-03-03 | Financial data underlying debate |
| [S2] | 10-K FY2024 | MD&A | 2025-03-03 | Historical context |
| [S3] | 8-K Q4 2025 Earnings | CEO statement, Adj EBITDA | 2026-02-26 | Bull data points |
| [S5] | StockAnalysis.com | Consensus, EPS estimates | 2026-05-27 | Analyst consensus |
| [S6] | Web search | Epic Universe, industry | 2026-05-27 | Bear data points |
| [S8] | 10-Q Q1 2026 | Pass sales, deferred revenue | 2026-05-11 | Key bull leading indicators |

## Full Research Available

This primer covers steps 1–3 of 19. The full deep dive (moat analysis, DCF, bull/bear,
management quality, earnings transcript analysis) is available via:

- Investment memo: /memo/prks
- Full research API: GET /api/v1/research/PRKS/memo
- Coverage universe: /stocks