SeaWorld Entertainment floundered Wednesday after the theme park operator reported weaker-than-expected second-quarter earnings and slashed its full-year forecast, results that sent the stock plummeting more than 30 percent.
The company, which went public in April of 2013, said it earned $0.43 cents per share versus Wall Street estimates of $0.59 cents per share. Revenue also came up short at $405.2 million compared with estimates of $445 million. The report comes amid heightened criticism over SeaWorld's treatment of its captive orcas.
So, will SeaWorld sink or swim?
"The question here is whether something has changed in the attendance figures for SeaWorld," said Macquarie's senior media analyst Tim Nollen, who noted that increased competition from Disney and Universal and poor publicity contributed to the company's lackluster quarter.
Aside from attendance, Nollen pointed out two other catalysts that could help SeaWorld to improve in the coming year. "They announced a cost savings program and a share buyback program, plus they are going to refinance some high coupon debt later this year. So, there are a number of factors that could work in to a better earnings story for 2015."
As far as the technicals, Oppenheimer's Ari Wald said the stocks future looks grim. "This is a pretty damaging breakdown here. I would look at it as too late to sell, too early to buy."
Wald's advice, avoid the stock. "I think the odds are stacked against investors. I think it's going to take months, if not quarters, for this stock to build a base. I think any bounces will be short-lived."