NEW YORK (TheStreet) -- Live Nation Entertainment (LYV - Get Report) stock is up by 0.85% to $24.95 in early-morning trading on Monday, after a report suggested that the company could buy SFX Entertainment (SFXE).
SFX Entertainment, which hosts concerts and festivals such as TomorrowWorld, is considering a potential sale to the concert ticketing and promotions company, sources told Reuters.
Live Nation has shown interest in buying SFX or its assets, such as day-long music festivals, the sources added.
SFX currently has $300 million in debt and a deal with Live Nation could help SFX bondholders, Reuters noted.
SFX Entertainment stock is up by 10.40% to 33 cents in early-morning trading on Monday.
Separately, recently, TheStreet Ratings objectively rated this stock according to its "risk-adjusted" total return prospect over a 12-month investment horizon. Not based on the news in any given day, the rating may differ from Jim Cramer's view or that of this articles's author. TheStreet Ratings has this to say about the recommendation:
We rate LIVE NATION ENTERTAINMENT as a Hold with a ratings score of C. 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 and largely solid financial position with reasonable debt levels by most measures. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, disappointing return on equity and poor profit margins.
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- Despite its growing revenue, the company underperformed as compared with the industry average of 5.9%. Since the same quarter one year prior, revenues slightly increased by 4.8%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
- Despite the current debt-to-equity ratio of 1.53, 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 0.79 is weak.
- The gross profit margin for LIVE NATION ENTERTAINMENT is rather low; currently it is at 23.86%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of 3.00% trails that of the industry average.
- Net operating cash flow has declined marginally to -$379.73 million or 7.78% 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