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TheStreet Open House

Why Live Nation Entertainment (LYV) Stock Is Up Today

Stocks in this article: LYV

NEW YORK (TheStreet) -- Live Nation Entertainment (LYV) was gaining 7.9% to $22.59 Wednesday after beating analysts' expectations for earnings and revenue in the first quarter.

Live Nation reported a loss of -16 cents a share in the first quarter, beating to Capital IQ Consensus Estimate of a loss of -36 cents a share by 20 cents. Revenue grew 22.3% to $1.123 billion for the quarter. Analysts expected revenue of $963.8 million for the quarter.

"Our Concerts division delivered revenue of $663 million in the first quarter of 2014, an increase of 29% over the same period in 2013," president and CEO Michael Rapino said in a press release. "This strong revenue growth was driven primarily by more arena events which drove improvements in AOI of 80% and in operating income of 15%. Tickets sold through May 2 of this year for all events in 2014 are up 5% year-on-year."

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TheStreet Ratings team rates LIVE NATION ENTERTAINMENT as a Hold with a ratings score of C. TheStreet Ratings Team has this to say about their recommendation:

"We rate LIVE NATION ENTERTAINMENT (LYV) a HOLD. The primary factors that have impacted our rating are mixed -- some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its revenue growth, solid stock price performance and impressive record of earnings per share growth. However, as a counter to these strengths, we also find weaknesses including poor profit margins and weak operating cash flow."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • LYV's revenue growth has slightly outpaced the industry average of 5.1%. Since the same quarter one year prior, revenues rose by 12.2%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • Powered by its strong earnings growth of 50.58% and other important driving factors, this stock has surged by 70.61% over the past year, outperforming the rise in the S&P 500 Index during the same period. Regarding the stock's future course, our hold rating indicates that we do not recommend additional investment in this stock despite its gains in the past year.
  • Even though the current debt-to-equity ratio is 1.28, it is still below the industry average, suggesting that this level of debt is acceptable within the Media industry. Regardless of the somewhat mixed results with the debt-to-equity ratio, the company's quick ratio of 0.78 is weak.
  • The gross profit margin for LIVE NATION ENTERTAINMENT is rather low; currently it is at 24.01%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of -5.08% is significantly below that of the industry average.
  • Net operating cash flow has decreased to $152.93 million or 44.99% when compared to the same quarter last year. In addition, when comparing the cash generation rate to the industry average, the firm's growth is significantly lower.
  • You can view the full analysis from the report here: LYV Ratings Report

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Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer or Stephanie Link.

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