By Live Nation (LYV) stock price continued its strong rally, reaching a record high of $127.50 as traders eyed its upcoming earnings. It jumped to a high of $127.50, up by 100% from its lowest level last year, giving it a market cap of almost $30 billion.
Live Nation is a growing company
Live Nation is a near monopoly company that is growing at a rate as demand for its services continue. Its annual revenue crashed from $11.5 billion in 2019 to $1.8 billion in 2020 because of the pandemic.
Since then, the revenue jumped and peaked at over $22.7 billion in 2023, a trend that analysts expect to continue in the coming years.
For starters, Live Nation is a giant company in the entertainment industry, where it offers venues and booking solutions. It is used by over 765 million people who use its venues to attend events like concerns and tours.
The company also owns Ticketmaster, a platform that sells millions of tickets globally. It acquired this firm in a $2.5 billion deal a few years ago. This acquisition explains why it is one of the most hated company in the United States, and why some politicians believe that the deal should be undone.
Its business is divided into several divisions, including Live Nation Concerts, Venue Nation, Ticketmaster, and Live Nation Sponsorship.
One of the things that Warren Buffett recommends when selecting an investment is a company’s moat. Live Nation has one of the biggest moats in the US, which explains why it always trades at a premium, as I will explain below.
LYV earnings ahead
The next important catalyst for Live Nation stock will be its earnings, which will come out on Monday.
The most recent results showed that Live Nation’s business continued doing well in the last quarter. Revenue rose by 7% to $6 billion, while its operating income surged by 21% to $466 million.
This growth happened after the number of fans who visited its events jumped to over 39 million. Also concert profits jumoped to a record high during the quarter as the number of tickets sold rose to 183 million.
Analysts believe that Live Nation’s revenue will come in at $7.7 billion, an 11% increase from the same period last year. Its guidance for the fourth quarter is expected to be $5.5 billion, a sequential decline because the second and third quarter are the busiest periods.
Analysts also expect that its forward guidance will show that its revenue rose to $23.6 billion followed by $26.65 billion in 2025.
A key concern about the Live Nation stock is its valuation, which is quite high. Data shows that the company has a forward price-to-earnings ratio of 99, much higher than the S&P 500 average of 21.
For a near monopoly, such a big valuation gap is often understood. The company will likely continue to do well as long as its strong revenue growth continues.
That explains why analysts are bullish on the stock, with 10 of the 12 tracking the company having a bullish outlook. The average outlook for the Live Nation stock is $125.60, slightly higher than the current level.
Live Nation stock price analysis
LYV chart by TradingView
The weekly chart shows that the LYV share price has been in a strong bull run in the past few months. It has remained above the 50-week and 200-week moving averages, which made a golden cross in January this year.
Most notably, the stock has formed a cup and handle pattern, and is now sitting at its upper part.
Therefore, Live Nation shares will likely continue rising as bulls target the next important resistance point at $150. This view will become invalid if the stock falls below $115.
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