Stock Story -
Live events and entertainment company Live Nation (NYSE:LYV) reported results in line with analysts' expectations in Q2 CY2024, with revenue up 7% year on year to $6.02 billion. It made a GAAP profit of $1.03 per share, improving from its profit of $1.02 per share in the same quarter last year.
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Live Nation (LYV) Q2 CY2024 Highlights:
- Revenue: $6.02 billion vs analyst estimates of $6.01 billion (small beat)
- EPS: $1.03 vs analyst expectations of $1.07 (4.1% miss)
- Gross Margin (GAAP): 26.8%, up from 26% in the same quarter last year
- Free Cash Flow of $598.8 million, up from $71.47 million in the previous quarter
- Events: 14,678 at quarter end
- Market Capitalization: $21.93 billion
Leisure FacilitiesLeisure facilities companies often sell experiences rather than tangible products, and in the last decade-plus, consumers have slowly shifted their spending from "things" to "experiences". Leisure facilities seek to benefit but must innovate to do so because of the industry's high competition and capital intensity.
Sales GrowthA company’s long-term performance can indicate its business quality. Any business can put up a good quarter or two, but many enduring ones tend to grow for years. Over the last five years, Live Nation grew its sales at a decent 16% compounded annual growth rate. This shows it was successful in expanding, a useful starting point for our analysis.
We at StockStory place the most emphasis on long-term growth, but within consumer discretionary, a stretched historical view may miss a company riding a successful new product or emerging trend. Live Nation's annualized revenue growth of 43% over the last two years is above its five-year trend, suggesting its demand recently accelerated. Note that COVID hurt Live Nation's business in 2020 and part of 2021, and it bounced back in a big way thereafter.
This quarter, Live Nation grew its revenue by 7% year on year, and its $6.02 billion of revenue was in line with Wall Street's estimates. Looking ahead, Wall Street expects sales to grow 8.5% over the next 12 months, an acceleration from this quarter.
Cash Is KingIf you've followed StockStory for a while, you know we emphasize free cash flow. Why, you ask? We believe that in the end, cash is king, and you can't use accounting profits to pay the bills.
Live Nation has shown weak cash profitability over the last two years, giving the company limited opportunities to return capital to shareholders. Its free cash flow margin averaged 6.6%, subpar for a consumer discretionary business.
Live Nation's free cash flow clocked in at $598.8 million in Q2, equivalent to a 9.9% margin. This quarter's cash profitability was in line with the comparable period last year and above its two-year average.
Key Takeaways from Live Nation's Q2 Results We struggled to find many strong positives in these results as its revenue only beat slightly and its EPS missed analysts' expectations. Overall, this quarter could have been better. The stock traded down 3.2% to $91.64 immediately after reporting.
