Shares of Ticketmaster parent Live Nation(NYSE: LYV) rallied 9.3% on Friday, as of 12:45 p.m. ET.
While some may be balking at the high costs of concertgoing these days, fans overall don't seem deterred in their desire for live music experiences, as Live Nation's impressive results showed.
Fans turn out in the first quarter
In the first quarter, Live Nation saw revenue grow by 21% to $3.8 billion, exceeding estimates by a whopping $520 million. Management cited double-digit growth in tickets for live events, along with nonalcoholic beverages, food, and merchandise. Tickets sold were up 21% and concert revenue was up 26%. In what could almost be considered same-store sales in this area, management noted that artists who toured in 2023 are currently seeing bigger sell-throughs and gross dollars per show in 2024.
Management also gave encouraging guidance on the visibility for revenue this year, with 85% of shows at large venues booked for the full year. Last year at this time, that number stood at 75%. Additionally, 85% of sponsorship revenue has been booked for the year.
The company is also a venue operator and sees 12 new venues opening over the next two years, with the capacity to bring in 8 million more fans through those new amphitheaters.
Live Nation bounces back from monopoly accusations
Live Nation's stock had fallen off in April after The Wall Street Journal reported the Department of Justice was preparing to sue the company for monopoly-like behavior. However, the strong earnings report has helped the stock bounce back.
Live Nation doesn't "look" cheap based on GAAP earnings, because there are some litigation accruals and other depreciation costs from new venues skewing its bottom-line figures this quarter.
However, the company also reports "adjusted" operating earnings, which came in at $367 million last quarter and were up 15%, annualizing to $1.468 billion. At Live Nation's market cap after today's surge of $22.2 billion, that's just a little over 15 times adjusted operating income. Moreover, the company trades at less than 1 times sales.
These aren't overly expensive valuation metrics for a company growing by double digits. If investors can put aside the lingering concerns over the DOJ case which may or may not happen, Live Nation's stock still looks attractive and likely to benefit amid the "experience economy."
Should you invest $1,000 in Live Nation Entertainment right now?
Before you buy stock in Live Nation Entertainment, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Live Nation Entertainment wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Consider when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $525,806!*
Stock Advisor provides investors with an easy-to-follow blueprint for success, including guidance on building a portfolio, regular updates from analysts, and two new stock picks each month. TheStock Advisorservice has more than quadrupled the return of S&P 500 since 2002*.
*Stock Advisor returns as of May 3, 2024
Billy Duberstein has no position in any of the stocks mentioned. His clients may own shares of the companies mentioned. The Motley Fool recommends Live Nation Entertainment. The Motley Fool has a disclosure policy.
