Live Nation Entertainment Inc (LYV)

Conclusion

Live Nation Entertainment operates three segments: Concerts, Ticketing, and Sponsorship & Advertising. At a price of 176.64 USD on 2026-11-09, the market capitalisation is 41.6 billion USD and the enterprise value is 45.3 billion USD.

The verdict is overvalued. Today's multiples sit well above their own ten-year medians: P/E of 275.6 against a median of 73.6, P/B of 91.1 against 16.4, and P/FCF of 47.0 against 24.3. The fair value band runs from 75.15 to 112.73 USD with a midpoint of 93.94 USD, giving a margin of safety of -46.8% at the current price. The DCF gives 96.53 USD per share, and the fair value from historical multiples is 91.35 USD. The reverse DCF implies growth of 23.9% a year, a comparison of -44.5% against five-year revenue growth of 68.4%. Revenue growth over the last three years was 14.7% a year, so the price assumes growth that the business has not delivered recently.

What holds the case up: return on invested capital of 18.3% against a cost of capital of 9.0%, a spread the scorecard rates as creating value, and free cash flow conversion of 5.9x on a trailing basis. What would break it: interest coverage of 3.0, an operating margin of 3.6% and a current ratio of 0.95. The company has also beaten earnings estimates in only three of the last eight quarters, with an average surprise of -46.7%.

Financial health

Financial strength is yellow: net debt to EBITDA of 2.0 is a good sign, but interest coverage of 3.0 and a current ratio of 0.95 pull the assessment down. The quick ratio is 0.77 and debt to equity is 26.06. The Altman Z-score is 2.00, in the grey zone. The Altman model was designed for manufacturers, and Live Nation is not one, so this reading is only a rough guide. Insolvency risk: medium, about 6.7% by the estimate of the Ohlson model over one to two years, based on balance sheet data as of 2025-12-31. The company's ability to cover its interest payments is the figure to watch most closely.

Earnings quality

Earnings quality is green. Free cash flow conversion is 5.9x on a trailing basis and 3.4x over five years, while the accrual ratio of -4.2% shows that reported earnings are backed by cash. Stock-based compensation is 0.6% of revenue, and free cash flow after it is 714.7 million USD. The share count has grown by 1.8% a year over five years, so there have been no net buybacks. The Piotroski score is 5 of 9, and the Beneish M-score of -2.51 is in the unlikely range for manipulation. Earnings surprises are the weak point: three beats and five misses over eight quarters. Estimate revisions are mixed, with one upward and two downward revision in the current year over the last 30 days.

Profitability

Profitability is yellow. The operating margin of 3.6% is above its ten-year median of 2.7%, while the gross margin of 19.5% is below its median of 25.9%. The net margin is 0.5% against a median of 0.6%. The return on invested capital is 18.3% against a cost of capital of 9.0%, with the scorecard's given spread of 9.2% marked as creating value. Return on equity is 33.1%, but the DuPont split shows that leverage drives much of it: a net margin of 2.0%, an asset turnover of 1.10x and an equity multiplier of 12.6x. The return on equity therefore overstates the underlying business economics.

Growth

Growth is green. Revenue has compounded at 14.7% a year over three years, 68.4% a year over five years and 13.3% a year over ten years. Earnings per share grew 23.0% a year over three years. Free cash flow per share fell 41.0% a year over three years, but rose 5.6% a year over ten years. Revenue grew in nine of the last ten years. The five-year figure is inflated by a low base, so the ten-year rate is the more representative measure of underlying growth.

Valuation

Valuation is red. The P/E of 275.6 is 274.4% above its ten-year median of 73.6, and the P/B of 91.1 is 456.8% above its median of 16.4. The EV/EBITDA of 24.8 is 31.8% above its median of 18.8, and the P/FCF of 47.0 is 93.4% above its median of 24.3. The DCF gives 96.53 USD per share at a discount rate of 10.7%, with 55.6% of its value coming from the terminal value. The fair value band of 75.15 to 112.73 USD is an order-of-magnitude estimate built on fixed assumptions, including a 5% equity risk premium and capped growth, and it is not a price target. The company pays no dividend, so the forward yield is 0%.

Risks

Each weak number carries a specific risk. Interest coverage of 3.0 leaves little room if borrowing costs rise or operating profit falls. A current ratio below 1.0 means short-term obligations exceed liquid assets, which matters if cash generation slows. A 3.6% operating margin leaves little buffer against cost increases. Repeated earnings misses could weaken confidence in management forecasts. The valuation rests on growth well above what has recently been delivered, so a slowdown would make the premium harder to sustain.

This analysis has limits. It has no debt maturity schedule, so refinancing risk cannot be assessed. It has no revenue split by segment, so the contribution of each business line is unknown. The Altman and Ohlson models were not built for this type of business and are only indicative.