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Here's Why Investors Should Retain Live Nation (LYV) Stock
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Live Nation Entertainment, Inc. (LYV - Free Report) is poised to benefit from pent-up demand for live events, Ticketmaster and the sponsorship and advertising business. However, a reduction in live events due to the coronavirus crisis and high debt level is a concern.
Let us discuss the factors highlighting why investors should retain the stock for the time being.
Growth Catalysts
Shares of Live Nation have gained 63% so far this year compared with the industry’s 7.4% growth. The company has been benefiting from pent-up demand for live events and robust ticket sales. During third-quarter 2021, 17 million fans attended its summer concert, which highlights tremendous pent-up demand. Through October, the company’s confirmed show count across amphitheaters, arenas and stadiums are up double-digits, relative to the point in 2019 to 2020 shows. Through mid-October, the company had already sold 22 million tickets for its shows in 2022. A million tickets have been sold each for the Coldplay and Red-Hot Chili Peppers tours. The company is optimistic about its growth opportunity in 2022. Live Nation Entertainment believes several of its artists like Dave Matthews, Luke Bryan, Maroon 5, Travis Scott, Garth Brooks, among others, will have multi-year tours across the United States and Europe. This, in turn, will drive the company’s performance. With the pace of vaccination increasing in Europe and Canada, it anticipates more markets to open in the coming months.
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The coronavirus crisis has acted as a boon for Ticketmaster. Demand for digital ticketing increased as venues and artists are seeking contactless transactions due to the pandemic. Ticketmaster added new clients, which resulted in 14 million net new fee-bearing tickets so far this year. During third-quarter 2021, Ticketmaster witnessed its fourth-highest fee-bearing GTV quarter excluding refunds, driven by sports legs resuming and concert on-sales for 2022 ramping up. In 2022, the company anticipates Ticketmaster to benefit from increased Live Nation concert ticket sales as well as additional sales from new clients.
The company is optimistic about its growth in 2022 and 2023. Robust fan engagement is likely to continue into 2022 and 2023, as arenas, amphitheaters and stadiums are likely to witness double-digit growth in its show count and ticket sales relative to 2019 levels. The company sold more than 25 million tickets for shows during the second half of 2021. For 2022, the company has already sold 22 million tickets. The company’s sponsorship and advertising business has a strong pipeline for 2022, up double-digits relative to this time in 2019.
Concerns
The reduction in live events due to the coronavirus crisis affected the company’s operations for the first nine months of 2021. Although the company has resumed operations in the United States and the U.K. during third-quarter 2021, uncertainties related to the pace of recovery in certain markets (including vaccination drives) are likely to have persisted through 2022.
Maintaining liquidity has become a herculean task amid the coronavirus pandemic. Although cash and cash equivalent as of Sep 30, 2021, totaled $4,628.9 million compared with $$4,042.6 million as on Jun 30, 2021, debt is still high. Long-term debt at the end of the third quarter was $5,686.9 million compared with $5,295.2 million at the end of second-quarter 2021. At the end of third-quarter 2021, the company had a debt-to-capital ratio of 1.1, almost flat year over year.
Some better-ranked stocks in the Consumer Discretionary sector include Hilton Grand Vacations Inc. (HGV - Free Report) , Bluegreen Vacations Holding Corporation and Century Casinos, Inc. (CNTY - Free Report) .
Hilton Grand Vacations sports a Zacks Rank #1 (Strong Buy). The company has a trailing four-quarter earnings surprise of 411.1%, on average. Shares of the company have increased 67.1% so far this year.
The Zacks Consensus Estimate for Hilton Grand Vacations’ current financial year sales and earnings per share (EPS) suggests growth of 189.5% and 158.1%, respectively, from the year-ago period’s levels.
Bluegreen Vacations flaunts a Zacks Rank #1. The company has a trailing four-quarter earnings surprise of 695%, on average. Shares of the company have surged 160.2% so far this year.
The Zacks Consensus Estimate for Bluegreen Vacations’ current financial-year sales and EPS indicates a rise of 27.5% and 199.3%, respectively, from the year-ago period’s levels.
Century Casinos carries a Zacks Rank #2 (Buy). The company has a trailing four-quarter earnings surprise of 758.9%, on average. Shares of the company have increased 90.8% so far this year.
The Zacks Consensus Estimate for Century Casinos’ current financial-year sales and EPS suggests growth of 26.9% and 146.6%, respectively, from the year-ago period’s levels.
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Here's Why Investors Should Retain Live Nation (LYV) Stock
Live Nation Entertainment, Inc. (LYV - Free Report) is poised to benefit from pent-up demand for live events, Ticketmaster and the sponsorship and advertising business. However, a reduction in live events due to the coronavirus crisis and high debt level is a concern.
Let us discuss the factors highlighting why investors should retain the stock for the time being.
Growth Catalysts
Shares of Live Nation have gained 63% so far this year compared with the industry’s 7.4% growth. The company has been benefiting from pent-up demand for live events and robust ticket sales. During third-quarter 2021, 17 million fans attended its summer concert, which highlights tremendous pent-up demand. Through October, the company’s confirmed show count across amphitheaters, arenas and stadiums are up double-digits, relative to the point in 2019 to 2020 shows. Through mid-October, the company had already sold 22 million tickets for its shows in 2022. A million tickets have been sold each for the Coldplay and Red-Hot Chili Peppers tours. The company is optimistic about its growth opportunity in 2022. Live Nation Entertainment believes several of its artists like Dave Matthews, Luke Bryan, Maroon 5, Travis Scott, Garth Brooks, among others, will have multi-year tours across the United States and Europe. This, in turn, will drive the company’s performance. With the pace of vaccination increasing in Europe and Canada, it anticipates more markets to open in the coming months.
The coronavirus crisis has acted as a boon for Ticketmaster. Demand for digital ticketing increased as venues and artists are seeking contactless transactions due to the pandemic. Ticketmaster added new clients, which resulted in 14 million net new fee-bearing tickets so far this year. During third-quarter 2021, Ticketmaster witnessed its fourth-highest fee-bearing GTV quarter excluding refunds, driven by sports legs resuming and concert on-sales for 2022 ramping up. In 2022, the company anticipates Ticketmaster to benefit from increased Live Nation concert ticket sales as well as additional sales from new clients.
The company is optimistic about its growth in 2022 and 2023. Robust fan engagement is likely to continue into 2022 and 2023, as arenas, amphitheaters and stadiums are likely to witness double-digit growth in its show count and ticket sales relative to 2019 levels. The company sold more than 25 million tickets for shows during the second half of 2021. For 2022, the company has already sold 22 million tickets. The company’s sponsorship and advertising business has a strong pipeline for 2022, up double-digits relative to this time in 2019.
Concerns
The reduction in live events due to the coronavirus crisis affected the company’s operations for the first nine months of 2021. Although the company has resumed operations in the United States and the U.K. during third-quarter 2021, uncertainties related to the pace of recovery in certain markets (including vaccination drives) are likely to have persisted through 2022.
Maintaining liquidity has become a herculean task amid the coronavirus pandemic. Although cash and cash equivalent as of Sep 30, 2021, totaled $4,628.9 million compared with $$4,042.6 million as on Jun 30, 2021, debt is still high. Long-term debt at the end of the third quarter was $5,686.9 million compared with $5,295.2 million at the end of second-quarter 2021. At the end of third-quarter 2021, the company had a debt-to-capital ratio of 1.1, almost flat year over year.
Zacks Rank & Key Picks
Live Nation currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Some better-ranked stocks in the Consumer Discretionary sector include Hilton Grand Vacations Inc. (HGV - Free Report) , Bluegreen Vacations Holding Corporation and Century Casinos, Inc. (CNTY - Free Report) .
Hilton Grand Vacations sports a Zacks Rank #1 (Strong Buy). The company has a trailing four-quarter earnings surprise of 411.1%, on average. Shares of the company have increased 67.1% so far this year.
The Zacks Consensus Estimate for Hilton Grand Vacations’ current financial year sales and earnings per share (EPS) suggests growth of 189.5% and 158.1%, respectively, from the year-ago period’s levels.
Bluegreen Vacations flaunts a Zacks Rank #1. The company has a trailing four-quarter earnings surprise of 695%, on average. Shares of the company have surged 160.2% so far this year.
The Zacks Consensus Estimate for Bluegreen Vacations’ current financial-year sales and EPS indicates a rise of 27.5% and 199.3%, respectively, from the year-ago period’s levels.
Century Casinos carries a Zacks Rank #2 (Buy). The company has a trailing four-quarter earnings surprise of 758.9%, on average. Shares of the company have increased 90.8% so far this year.
The Zacks Consensus Estimate for Century Casinos’ current financial-year sales and EPS suggests growth of 26.9% and 146.6%, respectively, from the year-ago period’s levels.