Trading Options with an Edge
Select Page

Hawk’s Nest

SeaWorld (SEAS) Positioned Well for Q4 Earnings, FY Outlook

by | Feb 22, 2022

SeaWorld (SEAS) reporting earnings on 2/24 before the open and name with a strong history and size bullish flow in open interest. Shares have closed higher in five of the last seven quarters with an average closing move of 5.5% and a max move of 17.1%. The current implied move is 9%. SEAS has 4500 March $60 ITM calls in open interest from 11/30, bought at $6 to $6.50. SEAS shares are sitting right on the 8-EMA and just below the February value high. A breakout move above $72 has room to run with a big weekly range targeting $85. The Street is looking for $0.29 on $341.94M in sales this quarter and the FY is $2.59 on $1.47B, up 240% Y/Y. The $5.3B company trades 18.45X earnings, 4.13X sales, and 9.6X cash. SEAS is coming off a strong quarter as strong consumer demand and new pricing strategies helped drive record EBITDA and highest revenue ever. The company is executing well on some digital transformation initiatives like launching their new mobile app which has expanded e-commerce capabilities including in-park food and beverage purchases. SEAS should be optimistic around 2022 given early season pass sales feedback and a huge new lineup of new rides, attractions, and events.  Analysts have an average target for shares of $75 and a Street High $85. Deutsche Bank positive on 11/17. The firm views SeaWorld somewhat uniquely within the theme park vertical, based on its more concentrated portfolio of parks and the more immersive nature of the in-park experience. The analyst believes the company’s offering resonates with a wider range of consumers compared to purely ride-centric theme parks and should benefit comparatively more from the return of international visitation and large group meeting events/conventions in several of its key markets. Short interest is 10.8%. On 11/23 a director bought $162,500 in stock at $65. Hedge fund ownership fell marginally. Melvin Capital a buyer of 1.485M shares and now has 4.92M shares.