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Live Nation (LYV) Up 8.6% Since Last Earnings Report: Can It Continue?

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A month has gone by since the last earnings report for Live Nation (LYV - Free Report) . Shares have added about 8.6% in that time frame, outperforming the S&P 500.

Will the recent positive trend continue leading up to its next earnings release, or is Live Nation due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.

Live Nation Q2 Earnings & Revenues Beat Estimates

Live Nation Entertainment reported solid second-quarter 2021 results, wherein both earnings and revenues surpassed the Zacks Consensus Estimate. Both the metrics also improved year over year.

The company has been benefiting from pent-up demand for live events, robust ticket sales in the United States and the U.K. It is of the opinion that with vaccine rollouts in Canada and Europe increasing, more markets are likely to open broadly in the coming months. The company’s ticket sales and concert attendance have been growing at faster-than expected pace. Ticketmaster North America was the fourth best month in the history for transacted ticket volume.

Earnings & Revenues

In second-quarter 2021, the company reported adjusted loss per share of 90 cents, narrower than the Zacks Consensus Estimate of a loss of $1.35. In the prior-year quarter, the company had reported adjusted loss per share of $2.67.

The company’s revenues amounted to $576 million, beating the Zacks Consensus Estimate of $470 million. The top line improved a whopping 678.4% year over year.

Segmental Discussion

Concerts: The segment’s revenues totaled $287 million, up from the prior-year quarter figure of $141.8 million. However, adjusted operating loss of narrowed to $84 million from a loss of $210.7 million in the year-ago quarter. Total estimated events increased to 1,684, up from the prior year quarter of 132 events.

Ticketing: The segment’s revenues amounted to $244 million, up from the prior-year quarter figure of ($87) million. Adjusted operating income increased to $99.4 million, against a loss of ($203.9) million reported in the prior-year quarter. Total estimated ticket sold rose to 48,561,000.

Sponsorship & Advertising: The segment’s revenues were $44.6 million, up from the prior-year quarter’s $18.4 million. However, adjusted operating income rose to $13 million from a loss of ($1.8) million.

Operating Highlights

Net cash provided by operating activities was $1,095.4 million, against ($1,022.1) million reported in the prior-year quarter. The company reported adjusted free cash of ($81.7) million, versus ($450.2) million in the year-ago quarter.

Balance Sheet

Cash and cash equivalents as of Jun 30, 2021, totaled $4,042.6 million compared with $2,537.8 million as on Dec 31, 2020. Goodwill in the second quarter were $2,122.7 million compared with $2,129.2 million at 2020-end. Total long-term debt, net increased to $5,295.2 million, compared with $4,855.1 million as on Dec 31, 2020.

How Have Estimates Been Moving Since Then?

In the past month, investors have witnessed a downward trend in fresh estimates. The consensus estimate has shifted -43.31% due to these changes.

VGM Scores

Currently, Live Nation has a nice Growth Score of B, a grade with the same score on the momentum front. However, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for this investment strategy.

Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Live Nation has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.


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