Beverly Hills-based Live Nation Entertainment, Inc. (LYV) operates as a live entertainment company worldwide. With a market cap of $28.7 billion, Live Nation operates through Concerts, Ticketing, and Sponsorship & Advertising segments.
Companies with a market cap of $10 billion or more are categorized as "large-cap stocks." Live Nation Entertainment fits this description perfectly, with its market cap exceeding this threshold. The company owns, operates, and holds exclusive booking rights or equity stakes in venues like the House of Blues and The Fillmore in San Francisco, underscoring its dominance in the entertainment industry.
LYV touched its all-time high of $157.75 on Feb. 21 and is currently trading 22% below that peak. Meanwhile, LYV has plunged 7.7% over the past three months, underperforming the Communication Services Select Sector SPDR ETF Fund’s (XLC) marginal dip during the same time frame.
Live Nation’s performance looks much more attractive over the longer term. LYV stock soared 18.7% over the past six months, outpacing XLC’s 9.8% gains during the same time frame. However, LYV gained 15.4% over the past 52 weeks, slightly underperforming XLC’s 19.5% returns over the past year.
To confirm the overall bullish trend and recent downturn, LYV has traded consistently above its 200-day moving average since early September last year and dropped below its 50-day moving average in early March.
Live Nation’s stock declined 1.9% in the trading session following the release of its mixed Q4 results on Feb. 20. A 5.7% year-over-year drop in concert revenues contributed to an overall 2.4% year-over-year decrease in the company’s topline, bringing it to $5.7 billion. Additionally, the adjusted operating loss from concerts rose by 15.7% to $213.2 million, further impacting profitability. However, the company’s overall adjusted operating income came in at $157.3 million, up from $116.9 million reported in the year-ago quarter.
In fiscal 2024, the company observed increased working capital requirements, which led to a modest 1.9% year-over-year growth in free cash flows to $1.15 billion. Driven by an increase in concert and live events demand after the COVID-19 pandemic, Live Nation experienced a significant topline growth from 2021 to 2023. In FY 2023, the company’s annual revenues surged 36.2% year-over-year to $22.7 billion. However, the pace of topline growth in FY 2024 slowed down, with revenues increasing by just 1.9% year-over-year to approximately $23.2 billion, a figure that likely failed to impress investors.
However, Live Nation has notably outperformed its peer Warner Music Group Corp.’s (WMG) 6.6% gains over the past six months and a marginal 18 bps decline over the past year.
Among the 19 analysts covering LYV stock, the consensus rating is a “Strong Buy.” Its mean price target of $169.94 suggests a 38.1% upside potential from current price levels.
