Please ensure Javascript is enabled for purposes of website accessibility

Why Live Nation Entertainment Shares Soared Today

By Anders Bylund - May 4, 2018 at 3:42PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The event organizer and ticket wrangler stomped Wall Street's first-quarter estimates with a clear path to further gains ahead.

What happened

Shares of Live Nation Entertainment (LYV 5.93%) closed 12.5% higher on Friday, following the release of strong first-quarter results. Earlier in the day, share prices jumped as much as 14.9% higher.

So what

The event organizer and ticket distributor saw first-quarter sales rise 19% year over year, to $1.48 billion, driven by a similar increase in the number of concerts the company managed during the quarter. Net losses of $0.24 per diluted share were a bit steeper than the year-ago period's $0.22 net loss per share, though free cash flows increased by 76%, to $46.4 million, and adjusted operating income rose 24%, to $114 million.

The analyst consensus called for a $0.29 loss per share on roughly $1.32 billion in top-line sales. Ticketmaster's parent company breezed past that top-line target in a period full of seasonal challenges.

Rowdy crowds in front of a brightly lit stage, presumably featuring a rock concert.

Image source: Getty Images.

Now what

Earlier this week, Live Nation bought the rights to co-manage the Rock In Rio series of enormous music festivals. Earlier, the company grabbed the rights to sell tickets to NFL games. The company is pulling out plenty of stops to score sustainable long-term growth here.

Furthermore, outdoor events packed with Live Nation-managed food and souvenir vendors are becoming a cornerstone of the company's big-picture strategy. Amphitheater shows, which fall in this category, are leading the way with a 27% year-over-year increase in the number of events planned.

That hum you hear is not a lead singer forgetting the words to an old song -- it's Live Nation's engine firing on all cylinders. The stock has now gained a market-crushing 42% over the last 52 weeks, but still trades at a very reasonable 13 times free cash flows. There might be more of these market-beating gains waiting behind the scenes.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Live Nation Entertainment, Inc. Stock Quote
Live Nation Entertainment, Inc.
$86.80 (5.93%) $4.86

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
S&P 500 Returns

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 06/26/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.