The full-year results for Live Nation Entertainment, Inc. (NYSE:LYV) were released last week, making it a good time to revisit its performance. The results overall were pretty much dead in line with analyst forecasts; revenues were US$1.9b and statutory losses were US$8.12 per share. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.
Taking into account the latest results, the current consensus from Live Nation Entertainment's twelve analysts is for revenues of US$6.74b in 2021, which would reflect a huge 262% increase on its sales over the past 12 months. Losses are predicted to fall substantially, shrinking 62% to US$3.08. Yet prior to the latest earnings, the analysts had been forecasting revenues of US$7.31b and losses of US$1.96 per share in 2021. While this year's revenue estimates dropped there was also a very substantial increase in loss per share expectations, suggesting the consensus has a bit of a mixed view on the stock.
The average price target lifted 6.6% to US$79.18, clearly signalling that the weaker revenue and EPS outlook are not expected to weigh on the stock over the longer term. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. There are some variant perceptions on Live Nation Entertainment, with the most bullish analyst valuing it at US$100.00 and the most bearish at US$50.00 per share. This is a fairly broad spread of estimates, suggesting that analysts are forecasting a wide range of possible outcomes for the business.
Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. For example, we noticed that Live Nation Entertainment's rate of growth is expected to accelerate meaningfully, with revenues forecast to exhibit 262% growth to the end of 2021 on an annualised basis. That is well above its historical decline of 0.09% a year over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in the industry are forecast to see their revenue grow 15% per year. So it looks like Live Nation Entertainment is expected to grow faster than its competitors, at least for a while.
The Bottom Line
The most important thing to take away is that the analysts increased their loss per share estimates for next year. Regrettably, they also downgraded their revenue estimates, but the latest forecasts still imply the business will grow faster than the wider industry. We note an upgrade to the price target, suggesting that the analysts believes the intrinsic value of the business is likely to improve over time.
With that in mind, we wouldn't be too quick to come to a conclusion on Live Nation Entertainment. Long-term earnings power is much more important than next year's profits. At Simply Wall St, we have a full range of analyst estimates for Live Nation Entertainment going out to 2025, and you can see them free on our platform here..
However, before you get too enthused, we've discovered 1 warning sign for Live Nation Entertainment that you should be aware of.
This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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