Wonderla's industry-leading valuations look sustainable

Rising footfalls, strong earnings outlook provide comfort

Sheetal Agarwal 

The stock of India's largest amusement park chain — Wonderla Holidays (Wonderla) — is trading at premium valuations not just to its domestic peer (Adlabs Entertainment), but also to most global peers such as Disney, Six Flags, Cedar Fair and Sea World Entertainment, among others. At current levels, Wonderla is trading at 28 times FY18 estimated earnings, whereas its global peers are trading anywhere between 15 to 26 times CY18 estimated earnings. Although any comparison with global peers is a far cry, the question is can the stock sustain these valuations? A ...

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Wonderla's industry-leading valuations look sustainable

Rising footfalls, strong earnings outlook provide comfort

The stock of India's largest amusement park chain- Wonderla Holidays (Wonderla) is trading at premium valuations not just to its domestic peer (Adlabs Entertainment), but also to most global peers such as Disney, Six Flags, Cedar Fair, Sea World Entertainment, amongst others. At current levels, Wonderla is trading at 28 times FY18 estimated earnings whereas its global peers are trading anywhere between 15 to 26 times CY18 estimated earnings. Although any comparison with global peers is a far cry, the question is can the stock sustain these valuations?A business model, which allows the company to set up quality parks with relatively lower costs, and consequently report healthy profitability and return ratios are few reasons behind the premium valuations. In fact, the company has been able to achieve a payback period of less than 10 years for new greenfield investments, which is amongst the best even when compared to global peers. Payback period is the length of time required for ... The stock of India's largest amusement park chain — Wonderla Holidays (Wonderla) — is trading at premium valuations not just to its domestic peer (Adlabs Entertainment), but also to most global peers such as Disney, Six Flags, Cedar Fair and Sea World Entertainment, among others. At current levels, Wonderla is trading at 28 times FY18 estimated earnings, whereas its global peers are trading anywhere between 15 to 26 times CY18 estimated earnings. Although any comparison with global peers is a far cry, the question is can the stock sustain these valuations? A ... image
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