LYV - Embedded Expectations Analysis - 2021 04 21
Live Nation Entertainment, Inc. (LYV:USA) currently trades at a historical high relative to UAFRS-based (Uniform) assets, with a 5.8x Uniform P/B. At these levels, the market is pricing in expectations for profitability to inflect positively, but management may have concerns about their liquidity position, in-person live show capacity recovery, and their online live show businessSpecifically, management may lack confidence in their ability to improve their liquidity position, reduce discretionary costs, and capitalize on direct-to-consumer market opportunities, particularly through the Veeps platform. Furthermore, they may have concerns about the potential of their online live show business, the pace of live show
capacity recovery in most states, and the continued impact of festival cancellations on their business. Moreover, management may lack confidence in their ability to sustain their amphitheater bookings internationally and further improve their contribution margin. Finally, they may have concerns about the sustainability of live show demand and their free cash usage
Live Nation Entertainment is a live entertainment company. The company's segments are: Concerts, which involves the global promotion of live music events, the operation and management of music venues, the production of music festivals, the creation of associated content and the provision of management and other services to artists; Ticketing, which is an agency business that sells tickets for events on behalf of its clients and retains a fee, or service charge, for these services; and Sponsorship and Advertising, which employs a sales force that creates and maintains relationships with sponsors that allow businesses to reach customers through its concert, festival, venue and ticketing assets.
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