Live Nation Stock is Finally Showing Post-Pandemic Weakness

The stock has dropped roughly 28% this year

May 19, 2022 at 9:58 AM

Live Nation Entertainment, Inc. (NYSE:LYV) is an American global entertainment company that promotes, operates, and manages ticket sales for live entertainment in the United States and internationally. The stock has lost 28.6% this year, though a familiar floor at the $84 mark has kept the stock from plummeting back toward its July 2021 lows near the $74 level. Plus, LYV is bucking today's broad-market selloff, and was last seen up 5.8% to trade at $90.37.

lyv may 19

Short sellers have been hitting the exits, with short interest falling 11.1% in the last two reporting periods. However, the 13.76 million shares sold short still make up a substantial 9% of the stock's available float, and would take over a week to cover at LYV's average daily pace of trading.

Analysts, meanwhile, remain incredibly optimistic. Of the nine in coverage, all but two call it a "strong buy." What's more, the 12-month consensus price target of $129.54 is a 51.7% premium to current levels.

Drilling down even further, the entertainment company provides mixed valuation metrics with an extremely high forward price-earnings ratio of 270.27 but an average price-sales ratio of 2.57. Nonetheless, Live Nation should see less exaggerated price-earnings figures as the business continues to recover post-pandemic. For fiscal 2022, LYV is estimated to generate earnings of 69 cents per share, which would mark a shift into profitability.

In addition, LYV is expected to grow its earnings 121.7% for fiscal 2023, with an estimated earnings per share (EPS) of 1.53. However, Live Nation’s revenue growth is expected to slow down to a 12.5% increase for fiscal 2023, despite estimates indicating that the company will conclude fiscal 2022 with 118.8% revenue growth.

Live Nation stock's valuation continues to be an issue despite the business’ expected recovery. Nonetheless, having weathered the worst possible scenario and maintaining a manageable balance sheet with $5.87 billion in cash and $7.61 billion in total debt, LYV will likely be a winner for investors looking to hold the stock long-term.

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