Live Nation Entertainment Inc. (NYSE: LYV) is the global leader in live music and entertainment events. Live Nation has tremendous scale with a rock-solid moat as it promoted over 50,000 live events for over 145 million fans in 2023, generating revenues of $22.7 billion, up 36% YoY. The pent-up demand for live events exploded in 2023 as Taylor Swift's The Eras Tour became the largest revenue-grossing concert tour of all time, followed by Beyonce's Renaissance World Tour coming in as the 8th highest gross tour of all time.
All indications point to an even stronger 2024.
The consumer discretionary sector giant has received its share of controversy over its market dominance, fending lawsuits and accusations of monopolistic and anticompetitive practices. The company competes with StubHub, AEG Presents and Eventbrite Inc. (NYSE: EB).
Vertical integration of the music industry
With royalties steadily diminishing with streaming music, artists are relying more than ever on live concert tours and merchandising to generate earnings. This secular tailwind will continue to drive demand for Live Nation’s services. Its vertically integrated operations have three main segments: Concerts, Ticketing and Sponsorship and Advertising.
Its Concerts segment generates the most revenue but provides the thinnest margins. Its Ticketmaster ticketing operations have the widest margins. Its Advertising and Sponsorships further monetizes its concerts by selling advertising and sponsorships at the venues. The company also signs artists to contracts to promote and produce live concerts and tours. It provides artists with access to large audiences and venues. Get AI-powered insights on MarketBeat.
Strong 2023 top and bottom lines
Live Nation put out a press release that mostly included highlights from the full year 2023. On Feb. 22, 2024, Live Nation reported Q4 2023 EPS of $1.37. Revenues surged 36.1% YoY to $5.83 billion, crushing $4.79 billion consensus estimates.
Full-year 2023 revenues rose 36% YoY to $22.7 billion. Operating income rose 46% to $1.08 billion. Adjusted operating income grew 32% YoY to $1.86 billion, doubling since 2019. Operating cash flow was $1.4 billion, with free cash up 20% to $1.1 billion. The company ended the year with $6.2 billion in cash and cash equivalents, including $1.5 billion in ticketing cash and $2.2 billion in free cash. Nearly 87% of debt is at a fixed rate, with the average cost at 4.7%.
Full-year 2023 metrics
Live Nation provided a review of various 2023 metrics. Concert attendance rose 20% YoY to over 145 million fans attending more than 50,000 events. International acts rose 50% in the top 50 tours and have 15% more shares on average. Fan spending rose double-digits across all major venue types, including amphitheaters, festivals, clubs and theaters. Sponsorship revenues rose 13% YoY to over $1 billion.
Strong tailwinds for 2024
Leading indicators point to a strong 2024. Live Nation purports that 90% of live music goers attribute seeing live music content on social media as driving their desire to attend shows. Live Nation concert ticket sales and pacing up 6%, with 57 million tickets sold for shows this year. Strong demand is being seen across all price points, with the front of the house experiencing high demand and ticket sales rising 25% YoY for the 2024 Lawnie Pass.
CEO Insights
Live Nation CEO Michael Rapino noted that all-in pricing is achieving surprisingly good results. There is no slowdown in ticket sales, “I see the ticket sale on my daily ticket sale counts. We just went on sale, jeez, within the last week on Usher, Justin Timberlake and Jennifer Lopez announced Jelly Roll this morning. These shows are flying out the door from top to bottom. So yeah, we're seeing no slowdown on the consumer front."
Rapino described a Drake show that was sold out for both nights and merchandise that was deemed reasonably high: "They were buying sales that included the sweatshirts and onsite, and the GM told me they were -- we're doing really strong numbers. So, we're seeing at our current business, they're buying and showing up across the country and the globe right now.”
Live Nation analyst ratings and price targets are at MarketBeat. Live Nation’s peers and competitor stocks can be found with the MarketBeat stock screener.
Daily cup pattern
The daily candlestick chart on LYV illustrates a cup pattern. The cup lip line formed at $101.58 on July 28, 2023. Shares proceeded to sell off on its Q2 2023 earnings report, reaching a swing low of $76.48 on Oct. 27, 2023. LYV formed a rounding bottom as it moved higher up to $93,88 preceding its Q4 2023 earnings release.
The strong report sent shares spiking up to peak at the lip line at a high of $101.50 on Feb. 23, 2024, before the pullback to $94.90 as it literally gapped and crapped that day. The daily relative strength index (RSI) continues to rise toward the 70-band. Pullback support levels are at $91.42, $86.88, $81.38 and $76.48.
