Live Nation Entertainment, Inc. (NYSE:LYV) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. Live Nation Entertainment, Inc. operates as a live entertainment company. The company’s loss has recently broadened since it announced a US$4.9m loss in the full financial year, compared to the latest trailing-twelve-month loss of US$1.5b, moving it further away from breakeven. As path to profitability is the topic on Live Nation Entertainment’s investors mind, we’ve decided to gauge market sentiment. We’ve put together a brief outline of industry analyst expectations for the company, its year of breakeven and its implied growth rate.
Live Nation Entertainment is bordering on breakeven, according to the 12 American Entertainment analysts. They expect the company to post a final loss in 2021, before turning a profit of US$43m in 2022. Therefore, the company is expected to breakeven just over a year from now. What rate will the company have to grow year-on-year in order to breakeven on this date? Using a line of best fit, we calculated an average annual growth rate of 78%, which signals high confidence from analysts. Should the business grow at a slower rate, it will become profitable at a later date than expected.
We’re not going to go through company-specific developments for Live Nation Entertainment given that this is a high-level summary, however, take into account that typically a high growth rate is not out of the ordinary, particularly when a company is in a period of investment.
One thing we would like to bring into light with Live Nation Entertainment is its debt-to-equity ratio of over 2x. Typically, debt shouldn’t exceed 40% of your equity, and the company has considerably exceeded this. A higher level of debt requires more stringent capital management which increases the risk in investing in the loss-making company.
There are too many aspects of Live Nation Entertainment to cover in one brief article, but the key fundamentals for the company can all be found in one place – Live Nation Entertainment’s company page on Simply Wall St. We’ve also compiled a list of relevant factors you should further examine:
- Valuation: What is Live Nation Entertainment worth today? Has the future growth potential already been factored into the price? The intrinsic value infographic in our free research report helps visualize whether Live Nation Entertainment is currently mispriced by the market.
- Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on Live Nation Entertainment’s board and the CEO’s background.
- Other High-Performing Stocks: Are there other stocks that provide better prospects with proven track records? Explore our free…
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