For beginners, it can seem like a good idea (and an exciting prospect) to buy a company that tells a good story to investors, even if it currently lacks a track record of revenue and profit. Sometimes these stories can cloud the minds of investors, leading them to invest with their emotions rather than on the merit of good company fundamentals. A loss-making company is yet to prove itself with profit, and eventually the inflow of external capital may dry up.
Despite being in the age of tech-stock blue-sky investing, many investors still adopt a more traditional strategy; buying shares in profitable companies like Live Nation Entertainment (NYSE:LYV). Even if this company is fairly valued by the market, investors would agree that generating consistent profits will continue to provide Live Nation Entertainment with the means to add long-term value to shareholders.
Live Nation Entertainment's Improving Profits
Over the last three years, Live Nation Entertainment has grown earnings per share (EPS) at as impressive rate from a relatively low point, resulting in a three year percentage growth rate that isn't particularly indicative of expected future performance. Thus, it makes sense to focus on more recent growth rates, instead. Outstandingly, Live Nation Entertainment's EPS shot from US$0.66 to US$1.38, over the last year. Year on year growth of 107% is certainly a sight to behold. The best case scenario? That the business has hit a true inflection point.
Top-line growth is a great indicator that growth is sustainable, and combined with a high earnings before interest and taxation (EBIT) margin, it's a great way for a company to maintain a competitive advantage in the market. Live Nation Entertainment maintained stable EBIT margins over the last year, all while growing revenue 36% to US$23b. That's encouraging news for the company!
You can take a look at the company's revenue and earnings growth trend, in the chart below. Click on the chart to see the exact numbers.
NYSE:LYV Earnings and Revenue History March 20th 2024
You don't drive with your eyes on the rear-view mirror, so you might be more interested in this free report showing analyst forecasts for Live Nation Entertainment's future profits.
Are Live Nation Entertainment Insiders Aligned With All Shareholders?
We would not expect to see insiders owning a large percentage of a US$24b company like Live Nation Entertainment. But we do take comfort from the fact that they are investors in the company. Indeed, they have a considerable amount of wealth invested in it, currently valued at US$485m. Holders should find this level of insider commitment quite encouraging, since it would ensure that the leaders of the company would also experience their success, or failure, with the stock.
Is Live Nation Entertainment Worth Keeping An Eye On?
Live Nation Entertainment's earnings have taken off in quite an impressive fashion. That EPS growth certainly is attention grabbing, and the large insider ownership only serves to further stoke our interest. At times fast EPS growth is a sign the business has reached an inflection point, so there's a potential opportunity to be had here. Based on the sum of its parts, we definitely think its worth watching Live Nation Entertainment very closely. Of course, profit growth is one thing but it's even better if Live Nation Entertainment is receiving high returns on equity, since that should imply it can keep growing without much need for capital. Click on this link to see how it is faring against the average in its industry.
While opting for stocks without growing earnings and absent insider buying can yield results, for investors valuing these key metrics, here is a carefully selected list of companies in the US with promising growth potential and insider confidence.
Please note the insider transactions discussed in this article refer to reportable transactions in the relevant jurisdiction.
Have feedback on this article? Concerned about the content?Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com. This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
テック株の青空投資の時代であっても、多くの投資家は、Live Nation Entertainment (NYSE:LYV)のような利益を上げる会社の株式を購入するというより伝統的な戦略を採用しています。この会社が市場で公正な価値を持っているとしても、投資家は利益を一定に生むことが、株主に長期的な価値をもたらすための方法であると同意するでしょう。
Live Nation Entertainmentの利益向上
過去3年間、Live Nation Entertainmentは低い水準からEPS(Earnings Per Share)を驚くべき速さで成長させ、3年間の割合の成長率は将来の成果を特に示すものではありません。そのため、最近の成長率に焦点を当てることが賢明です。驚くべきことに、Live Nation EntertainmentのEPSは過去1年間にUS$0.66からUS$1.38に急増しました。年間成長率107%は確かに驚くべきものです。最善のシナリオは、ビジネスが本当の転換点に達したことです。
Live Nation Entertainmentの社内関係者が全株主と同じ目線に立っているのでしょうか? Live Nation Entertainmentのような市場価値がUS$24億の会社で、社内関係者が大量に所有しているのは期待できませんが、彼らがその会社の投資家であるという事実には安心できます。実際、彼らはその会社にかなりの富を投資しており、現在の評価額はUS$4.85億ドルです。株主は、会社のリーダーが株式とともに成功または失敗を経験することが保証されるため、この社内関係者のコミットメントレベルを非常に励みと感じる必要があります。
Live Nation Entertainmentを注目する価値があるのでしょうか?
Live Nation Entertainmentの利益は非常に印象的な形で急成長しています。このEPSの成長率は間違いなく注目に値するものであり、大量の社内関係者所有も興味をそそります。時に、急成長のEPSはビジネスが転換点に達していることを示す兆候であり、ここで潜在的な機会があります。その部分の合計に基づいて、Live Nation Entertainmentは非常に注目に値すると思います。もちろん、利益の成長は重要ですが、資本を必要とせずに成長を続けられる場合、Live Nation Entertainmentが高い株主資本利益率を受け取っているかどうかも重要です。
オーストラリアでは、moomooの投資商品及びサービスはMoomoo Securities Australia Limitedによって提供され、オーストラリア証券投資委員会(ASIC)の管理を受けております(AFSL No. 224663)。「金融サービスガイド」、「利用規約」、「プライバシーポリシー」などの詳細は、Moomoo Securities Australia Limitedのウェブサイトhttps://www.moomoo.com/auでご確認いただけます。
オーストラリアでは、moomooの投資商品及びサービスはMoomoo Securities Australia Limitedによって提供され、オーストラリア証券投資委員会(ASIC)の管理を受けております(AFSL No. 224663)。「金融サービスガイド」、「利用規約」、「プライバシーポリシー」などの詳細は、Moomoo Securities Australia Limitedのウェブサイトhttps://www.moomoo.com/auでご確認いただけます。