Based on the aggregated intelligence of 170,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, concert promoter Live Nation Entertainment (NYSE: LYV ) has received a distressing two-star ranking.
With that in mind, let's take a closer look at Live Nation's business and see what CAPS investors are saying about the stock right now.
Live Nation facts
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Headquarters
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Beverly Hills, Calif.
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Market Cap
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$1.9 billion
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Industry
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General entertainment
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Trailing-12-Month Revenue
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$5.19 billion
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Management
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President/CEO Michael Rapino (since 2005)
CFO Elizabeth Willard (since 2007)
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Return on Equity (average, past 3 years)
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(22.3%)
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Sources: Capital IQ (a division of Standard & Poor's) and Motley Fool CAPS.
On CAPS, 14% of the 195 members who have rated Live Nation believe the stock will underperform the S&P 500 going forward. These bears include All-Star jeffaim, who is ranked in the top 15% of our community, and LoveMeSomeGreen.
A couple of months ago, jeffaim added it all up for our community: "Key team departures + continued economic distress from the public + the rise of the curated festival a la ATP = uncertain future for crappy pop and classic has-been tours."
Live Nation even sports an anemic three-year average operating margin of 0.1%. That's lower than that of other event promoters such as Madison Square Garden (Nasdaq: MSG ) (6.4%), Walt Disney (NYSE: DIS ) (17.4%), and World Wrestling Entertainment (NYSE: WWE ) (15.4%).
CAPS member LoveMeSomeGreen elaborates on the Live Nation bear case:
The writing is on the wall. Music and live performance entertainment is no longer profitable except for special circumstances where large media companies get behind an artist and flood the airwaves. ...
They rely way too heavily on older artists with high name recognition that will only be touring for a few more years. AC-DC and U2 might be managing to bring folks into the venues 25 years after their inception, but can you really see Katy Perry filling venues 25 years from now?
What do you think about Live Nation, or any other stock for that matter? If you want to retire rich, you need to protect your portfolio from any undue risk. Staying away from dangerous stocks is crucial to securing your financial future, and on Motley Fool CAPS, thousands of investors are working every day to flag them. CAPS is 100% free, so get started!
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