Is Live Nation Entertainment Setting Up for a Big Move? – August 17, 2021

Live Nation Entertainment (LYV) is the largest live entertainment firm in the world with over 570 million fans served in 44 countries by the company’s concert and ticketing platforms. The company controls over 235 venues and also owns one of the largest ticketing services, Ticketmaster.

The company has been benefiting from pent-up demand for live events and strong ticket sales in the both United States and the U.K. With vaccine rollouts in Canada and Europe, more markets are expected to open, which should lead to more sales.

LYV had $4 billion in cash as of the most recent quarter, compared to only $46 million in short-term debt. However, the company has a negative profit margin. In terms of growth, the company reported a loss per share of 90 cents, but this was an improvement from the prior year’s $2.67 loss per share.

Analysts forecast earnings to rise 62.4% for the current year, which has led to a Growth Grade of B in our POWR Ratings service. But the stock appears overvalued with a price-to-sales ratio of 13.5, which is much higher than the industry average.

The stock showed bullish momentum from September to March, but performance has been mixed over the past few months, as shown in the chart below.

Take a look at the 1-year chart of LYV below with added notations:

During the past several months, LYV has rallied up into a large sideways trading range. The range’s resistance is at around $93 (red), while the support level is at $74 (green).  The stock is currently trading in the middle of the range, but at some point, the stock will have to break out of it, one way or the other.

The possible long position would be on a breakout above $93. The ideal short opportunity would be on a break below $74.

Author: Christian Tharp, CMT