Resilient Orlando Demand Will Unlock Theme Park Potential

Key Takeaways

• Strong consumer demand and investments in new experiences are expected to drive higher attendance, increased guest spending, and improved earnings visibility.
  
• Digital initiatives and underutilized real estate offer upside potential, while share repurchases reflect management's confidence despite short-term operational challenges.
  
• Heavy reliance on Orlando park attendance, weather vulnerability, and rising costs combine with weakened pricing power and recurring revenue pressure to threaten profitability and growth resilience.

Catalysts

Operates as a theme park and entertainment company in the United States.

• Forward bookings for Group and Discovery Cove visits, along with early 2026 pass sales, are trending strongly higher, reflecting resilient consumer demand for out-of-home experiences and higher discretionary spending, likely supporting revenue growth and improved earnings visibility.
  
• United's ongoing investment in new rides, branded attractions, seasonal events, and food & beverage/retail enhancements is expected to drive higher attendance and increase average guest spend, leveraging consumer preferences for experiences over goods to boost both top-line and margins.
  
• The company continues to invest in digital capabilities such as CRM and its mobile app, which are already showing higher adoption and increased in-app transaction values; these initiatives should enable data-driven marketing and effective upselling, further lifting per capita spending and net margins.
  
• Real estate and hotel partnership opportunities centered on valuable, underutilized land holdings (e.g., 400 acres adjacent to Orlando parks) have not been fully credited in the current valuation, presenting potential upside via new revenue streams and asset monetization.
  
• A newly approved $500 million share repurchase program, backed by strong free cash flow and liquidity, signals management confidence in long-term prospects and creates an additional path to EPS growth-even as short-term headwinds (e.g., recent weather, promotional activity) temporarily weigh on results.

United Parks & Resorts Future Earnings and Revenue Growth

Assumptions

• Analysts are assuming United Parks & Resorts's revenue will grow by 2.1% annually over the next 3 years.
• Analysts assume that profit margins will increase from 12.4% today to 15.7% in 3 years time.
• Analysts expect earnings to reach $284.5 million (and earnings per share of $5.2) by about September 2028, up from $211.5 million today. However, there is some disagreement amongst the analysts with the more bearish ones expecting earnings as low as $244.9 million.
• In order for the above numbers to justify the analysts price target, the company would need to trade at a PE ratio of 15.1x on those 2028 earnings, up from 13.5x today. This future PE is lower than the current PE for the US Hospitality industry at 23.9x.
• Analysts expect the number of shares outstanding to remain consistent over the next 3 years.
• To value all of this in today's terms, we will use a discount rate of 10.78%, as per the Simply Wall St company report.

United Parks & Resorts Future Earnings Per Share Growth

Risks

• Declining admissions and in-park per capita spending indicate pricing power challenges and increased reliance on promotional activity, which could pressure revenue growth and net margins if weather or economic headwinds persist.
  
• The company's attendance growth is notably concentrated in its Orlando parks, while non-Orlando locations, such as Busch Gardens Tampa, experience stagnant or negative trends, exposing United Parks & Resorts to geographic risk and limiting overall revenue diversification.
  
• Flooding, hurricanes, and severe weather were repeatedly cited as major headwinds negatively impacting attendance and operational costs, highlighting the company's vulnerability to climate change and weather-related volatility, which can depress both revenue and profitability.
  
• Deferred revenue and annual pass base both declined year-over-year, suggesting softness in recurring customer engagement and potential longer-term erosion in reliable revenue streams.
  
• Marketing and operating expenses increased due to the need for aggressive promotion and less efficient cost control during periods of weak demand, signaling ongoing risk of margin compression, especially in the face of rising inflation, labor, and insurance costs industry-wide.

Valuation

• The analysts have a consensus price target of $57.455 for United Parks & Resorts based on their expectations of its future earnings growth, profit margins and other risk factors. However, there is a degree of disagreement amongst analysts, with the most bullish reporting a price target of $81.0, and the most bearish reporting a price target of just $46.0.
• In order for you to agree with the analyst's consensus, you'd need to believe that by 2028, revenues will be $1.8 billion, earnings will come to $284.5 million, and it would be trading on a PE ratio of 15.1x, assuming you use a discount rate of 10.8%.
• Given the current share price of $51.95, the analyst price target of $57.45 is 9.6% higher.
• We always encourage you to reach your own conclusions though. So sense check these analyst numbers against your own assumptions and expectations based on your understanding of the business and what you believe is probable.