Has the Market Pushed Up Live Nation Entertainment (LYV)'s Valuation Too Far?

Live Nation Entertainment may be overvalued with poor growth indicators, but the 14 analysts following the company give it an average rating of buy. The analysts have set target prices ranging from $70.0 to $120.0 per share, for an average of $99.0. At today's price of $72.97, Live Nation Entertainment is trading -26.29% away from its average target price, suggesting there is an analyst consensus of strong upside potential.

Live Nation Entertainment, Inc is an American global entertainment company, founded in 2010, following the merger of Live Nation and Ticketmaster. The company promotes, operates, and manages ticket sales for live entertainment in the United States and internationally. The large-cap Consumer Cyclical company is based in Beverly Hills, CA.

Live Nation Entertainment has a trailing twelve month P/E ratio of 114.02, compared to an average of 22.33 for the Consumer Cyclical sector. Based on its EPS guidance of 1.39, the company has a forward P/E ratio of 52.5.

Furthermore, Live Nation Entertainment is likely overvalued compared to its book value, since its P/B ratio of 31.01 is higher than the sector average of 3.12.

If analysts are willing to give the company a decent rating despite its valuation issues and high debt load, it's likely that they put significant weight behind Live Nation Entertainment's growth potential, as signaled by its 65.22% rate of revenue growth and capital expenditures that are growing at 17.3% on average each year.

2019-12-31 2020-12-31 2021-12-31 2022-12-31
Revenue (MM) $11,548 $1,861 $6,268 $16,681
Revenue Growth n/a -83.88% 236.8% 166.11%
Gross Margins 4.02% -84.58% -3.62% 5.21%
Gross Margins Growth n/a -2203.98% 95.72% 243.92%
Operating Margins 2.81% -88.83% -6.67% 4.39%
Operating Margins Growth n/a -3261.21% 92.49% 165.82%
Earnings Per Share $0.33 -$7.91 -$2.9 $1.28
EPS Growth n/a -2496.97% 63.34% 144.14%
Diluted Shares (MM) 214 218 225 231
Free Cash Flow (MM) $104 -$1,306 $1,621 $1,479
FCF Growth n/a -1356.3% 224.1% -8.76%
Capital Expenditures (MM) $366 $223 $160 $353
Net Debt / EBITDA 6.09 -7.39 165.11 6.3
The above analysis is intended for educational purposes only and was performed on the basis of publicly available data. It is not to be construed as a recommendation to buy or sell any security. Any buy, sell, or other recommendations mentioned in the article are direct quotations of consensus recommendations from the analysts covering the stock, and do not represent the opinions of Market Inference or its writers. Past performance, accounting data, and inferences about market position and corporate valuation are not reliable indicators of future price movements. Market Inference does not provide financial advice. Investors should conduct their own review and analysis of any company of interest before making an investment decision.