Intrinsic value of Live Nation Entertainment - LYV

Previous Close

$38.38

  Intrinsic Value

$96.93

stock screener

  Rating & Target

str. buy

+153%

  Value-price divergence*

-6%

Previous close

$38.38

 
Intrinsic value

$96.93

 
Up/down potential

+153%

 
Rating

str. buy

 
Value-price divergence*

-6%

*Intrinsic value change (in %) minus stock price change (in %) in the past 12 months.

We calculate the intrinsic value of LYV stock by summing up the current values of future distributable cash flows generated by the company and dividing the sum by the number of outstanding shares. As such, the intrinsic value calculation depends entirely on projections. The more accurate your projections of the company's performance are - the more reliable is the intrinsic value calculation result. Please make sure to check the stock valuation input data below and adjust it if necessary. The quality of the output (intrinsic valuation result) is only as good as the quality of the input. See also DISCLAIMERS.

STOCK VALUATION INPUT DATA

Revenue (in 2016), $M
Initial revenue growth rate, %
Terminal revenue growth rate, %
Revenue decline factor
Initial discount rate, %
Discount rate multiplier
Variable cost ratio, %
Fixed operating expenses, $M
Interest rate on debt, %
Effective corporate tax rate, %
Production assets / Revenue, %
Life of production assets, yrs
Working capital / Revenue, %
Revenue / Adjusted assets
Adjusted equity ratio
Cash flow adjustment, % of Revenue
Book value of equity, $M
Shares outstanding, mln
Market capitalization, $bln 7.7

 

FINANCIAL STATEMENTS FORECAST and PRESENT VALUE CALCULATION

Fiscal year
2016(a)
   2017
   2018
   2019
   2020
   2021
   2022
   2023
   2024
   2025
   2026
   2027
   2028
   2029
   2030
   2031
   2032
   2033
   2034
   2035
   2036
   2037
   2038
   2039
   2040
   2041
   2042
   2043
   2044
   2045
   2046

INCOME STATEMENT

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenue growth rate, %
  15.30
  17.00
  15.80
  14.72
  13.75
  12.87
  12.09
  11.38
  10.74
  10.17
  9.65
  9.18
  8.77
  8.39
  8.05
  7.75
  7.47
  7.22
  7.00
  6.80
  6.62
  6.46
  6.31
  6.18
  6.06
  5.96
  5.86
  5.78
  5.70
  5.63
  5.57
Revenue, $m
  8,355
  9,775
  11,320
  12,986
  14,771
  16,673
  18,688
  20,814
  23,050
  25,393
  27,843
  30,400
  33,065
  35,839
  38,724
  41,723
  44,840
  48,079
  51,445
  54,944
  58,582
  62,366
  66,303
  70,402
  74,671
  79,119
  83,756
  88,594
  93,642
  98,912
  104,416
Variable operating expenses, $m
 
  9,316
  10,760
  12,318
  13,987
  15,765
  17,650
  19,638
  21,728
  23,919
  26,210
  28,427
  30,919
  33,513
  36,210
  39,015
  41,930
  44,958
  48,106
  51,378
  54,780
  58,318
  61,999
  65,832
  69,824
  73,983
  78,320
  82,843
  87,563
  92,491
  97,639
Fixed operating expenses, $m
 
  198
  203
  208
  213
  218
  224
  229
  235
  241
  247
  253
  260
  266
  273
  280
  287
  294
  301
  309
  316
  324
  332
  341
  349
  358
  367
  376
  385
  395
  405
Total operating expenses, $m
  8,174
  9,514
  10,963
  12,526
  14,200
  15,983
  17,874
  19,867
  21,963
  24,160
  26,457
  28,680
  31,179
  33,779
  36,483
  39,295
  42,217
  45,252
  48,407
  51,687
  55,096
  58,642
  62,331
  66,173
  70,173
  74,341
  78,687
  83,219
  87,948
  92,886
  98,044
Operating income, $m
  181
  262
  357
  460
  571
  689
  815
  947
  1,086
  1,233
  1,386
  1,720
  1,887
  2,060
  2,241
  2,429
  2,624
  2,827
  3,038
  3,258
  3,486
  3,724
  3,971
  4,229
  4,498
  4,778
  5,070
  5,375
  5,693
  6,025
  6,373
EBITDA, $m
  584
  660
  790
  931
  1,083
  1,244
  1,415
  1,596
  1,787
  1,986
  2,195
  2,413
  2,641
  2,877
  3,124
  3,380
  3,646
  3,923
  4,211
  4,511
  4,822
  5,146
  5,483
  5,834
  6,200
  6,582
  6,979
  7,395
  7,828
  8,281
  8,753
Interest expense (income), $m
  97
  102
  144
  191
  241
  295
  352
  412
  476
  543
  614
  688
  764
  845
  928
  1,015
  1,105
  1,199
  1,296
  1,397
  1,502
  1,612
  1,726
  1,844
  1,967
  2,095
  2,229
  2,369
  2,514
  2,666
  2,824
Earnings before tax, $m
  48
  160
  213
  270
  330
  395
  463
  535
  610
  689
  772
  1,032
  1,122
  1,216
  1,313
  1,414
  1,519
  1,629
  1,742
  1,861
  1,984
  2,112
  2,246
  2,385
  2,531
  2,682
  2,841
  3,006
  3,179
  3,359
  3,548
Tax expense, $m
  28
  43
  58
  73
  89
  107
  125
  144
  165
  186
  208
  279
  303
  328
  354
  382
  410
  440
  470
  502
  536
  570
  606
  644
  683
  724
  767
  812
  858
  907
  958
Net income, $m
  3
  117
  155
  197
  241
  288
  338
  390
  445
  503
  563
  754
  819
  887
  958
  1,032
  1,109
  1,189
  1,272
  1,358
  1,448
  1,542
  1,640
  1,741
  1,847
  1,958
  2,074
  2,194
  2,321
  2,452
  2,590

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  1,527
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Total assets, $m
  6,764
  7,273
  8,423
  9,662
  10,991
  12,406
  13,905
  15,487
  17,150
  18,893
  20,717
  22,619
  24,602
  26,666
  28,812
  31,044
  33,363
  35,773
  38,278
  40,881
  43,588
  46,403
  49,333
  52,382
  55,558
  58,868
  62,319
  65,918
  69,674
  73,595
  77,691
Adjusted assets (=assets-cash), $m
  5,237
  7,273
  8,423
  9,662
  10,991
  12,406
  13,905
  15,487
  17,150
  18,893
  20,717
  22,619
  24,602
  26,666
  28,812
  31,044
  33,363
  35,773
  38,278
  40,881
  43,588
  46,403
  49,333
  52,382
  55,558
  58,868
  62,319
  65,918
  69,674
  73,595
  77,691
Revenue / Adjusted assets
  1.595
  1.344
  1.344
  1.344
  1.344
  1.344
  1.344
  1.344
  1.344
  1.344
  1.344
  1.344
  1.344
  1.344
  1.344
  1.344
  1.344
  1.344
  1.344
  1.344
  1.344
  1.344
  1.344
  1.344
  1.344
  1.344
  1.344
  1.344
  1.344
  1.344
  1.344
Average production assets, $m
  1,905
  2,229
  2,581
  2,961
  3,368
  3,801
  4,261
  4,746
  5,255
  5,790
  6,348
  6,931
  7,539
  8,171
  8,829
  9,513
  10,224
  10,962
  11,730
  12,527
  13,357
  14,219
  15,117
  16,052
  17,025
  18,039
  19,096
  20,199
  21,350
  22,552
  23,807
Working capital, $m
  214
  -978
  -1,132
  -1,299
  -1,477
  -1,667
  -1,869
  -2,081
  -2,305
  -2,539
  -2,784
  -3,040
  -3,306
  -3,584
  -3,872
  -4,172
  -4,484
  -4,808
  -5,145
  -5,494
  -5,858
  -6,237
  -6,630
  -7,040
  -7,467
  -7,912
  -8,376
  -8,859
  -9,364
  -9,891
  -10,442
Total debt, $m
  2,313
  3,206
  4,238
  5,352
  6,545
  7,815
  9,162
  10,582
  12,076
  13,641
  15,278
  16,987
  18,767
  20,621
  22,549
  24,553
  26,635
  28,799
  31,048
  33,386
  35,817
  38,345
  40,976
  43,714
  46,567
  49,539
  52,637
  55,869
  59,242
  62,763
  66,441
Total liabilities, $m
  5,638
  6,531
  7,563
  8,677
  9,870
  11,140
  12,487
  13,907
  15,401
  16,966
  18,603
  20,312
  22,092
  23,946
  25,874
  27,878
  29,960
  32,124
  34,373
  36,711
  39,142
  41,670
  44,301
  47,039
  49,892
  52,864
  55,962
  59,194
  62,567
  66,088
  69,766
Total equity, $m
  1,126
  742
  859
  986
  1,121
  1,265
  1,418
  1,580
  1,749
  1,927
  2,113
  2,307
  2,509
  2,720
  2,939
  3,166
  3,403
  3,649
  3,904
  4,170
  4,446
  4,733
  5,032
  5,343
  5,667
  6,005
  6,357
  6,724
  7,107
  7,507
  7,924
Total liabilities and equity, $m
  6,764
  7,273
  8,422
  9,663
  10,991
  12,405
  13,905
  15,487
  17,150
  18,893
  20,716
  22,619
  24,601
  26,666
  28,813
  31,044
  33,363
  35,773
  38,277
  40,881
  43,588
  46,403
  49,333
  52,382
  55,559
  58,869
  62,319
  65,918
  69,674
  73,595
  77,690
Debt-to-equity ratio
  2.054
  4.320
  4.930
  5.430
  5.840
  6.180
  6.460
  6.700
  6.900
  7.080
  7.230
  7.360
  7.480
  7.580
  7.670
  7.750
  7.830
  7.890
  7.950
  8.010
  8.060
  8.100
  8.140
  8.180
  8.220
  8.250
  8.280
  8.310
  8.340
  8.360
  8.380
Adjusted equity ratio
  -0.077
  0.102
  0.102
  0.102
  0.102
  0.102
  0.102
  0.102
  0.102
  0.102
  0.102
  0.102
  0.102
  0.102
  0.102
  0.102
  0.102
  0.102
  0.102
  0.102
  0.102
  0.102
  0.102
  0.102
  0.102
  0.102
  0.102
  0.102
  0.102
  0.102
  0.102

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  3
  117
  155
  197
  241
  288
  338
  390
  445
  503
  563
  754
  819
  887
  958
  1,032
  1,109
  1,189
  1,272
  1,358
  1,448
  1,542
  1,640
  1,741
  1,847
  1,958
  2,074
  2,194
  2,321
  2,452
  2,590
Depreciation, amort., depletion, $m
  403
  398
  433
  471
  511
  555
  601
  649
  700
  754
  810
  693
  754
  817
  883
  951
  1,022
  1,096
  1,173
  1,253
  1,336
  1,422
  1,512
  1,605
  1,702
  1,804
  1,910
  2,020
  2,135
  2,255
  2,381
Funds from operations, $m
  679
  515
  588
  668
  753
  843
  939
  1,040
  1,146
  1,257
  1,373
  1,447
  1,573
  1,705
  1,841
  1,984
  2,131
  2,285
  2,445
  2,611
  2,784
  2,964
  3,151
  3,346
  3,550
  3,762
  3,983
  4,214
  4,456
  4,708
  4,971
Change in working capital, $m
  82
  -142
  -154
  -167
  -179
  -190
  -202
  -213
  -224
  -234
  -245
  -256
  -266
  -277
  -289
  -300
  -312
  -324
  -337
  -350
  -364
  -378
  -394
  -410
  -427
  -445
  -464
  -484
  -505
  -527
  -550
Cash from operations, $m
  597
  657
  743
  834
  931
  1,033
  1,140
  1,252
  1,369
  1,491
  1,618
  1,703
  1,840
  1,982
  2,130
  2,283
  2,443
  2,609
  2,781
  2,961
  3,148
  3,342
  3,545
  3,756
  3,977
  4,207
  4,447
  4,698
  4,960
  5,235
  5,522
Maintenance CAPEX, $m
  0
  -191
  -223
  -258
  -296
  -337
  -380
  -426
  -475
  -526
  -579
  -635
  -693
  -754
  -817
  -883
  -951
  -1,022
  -1,096
  -1,173
  -1,253
  -1,336
  -1,422
  -1,512
  -1,605
  -1,702
  -1,804
  -1,910
  -2,020
  -2,135
  -2,255
New CAPEX, $m
  -180
  -324
  -352
  -380
  -407
  -434
  -459
  -485
  -510
  -534
  -559
  -583
  -608
  -632
  -658
  -684
  -711
  -739
  -767
  -798
  -829
  -863
  -898
  -934
  -973
  -1,014
  -1,057
  -1,103
  -1,151
  -1,202
  -1,255
Cash from investing activities, $m
  -426
  -515
  -575
  -638
  -703
  -771
  -839
  -911
  -985
  -1,060
  -1,138
  -1,218
  -1,301
  -1,386
  -1,475
  -1,567
  -1,662
  -1,761
  -1,863
  -1,971
  -2,082
  -2,199
  -2,320
  -2,446
  -2,578
  -2,716
  -2,861
  -3,013
  -3,171
  -3,337
  -3,510
Free cash flow, $m
  171
  142
  168
  196
  228
  263
  301
  341
  385
  431
  480
  485
  539
  596
  655
  717
  781
  848
  918
  990
  1,066
  1,144
  1,225
  1,310
  1,398
  1,490
  1,586
  1,685
  1,789
  1,898
  2,011
Issuance/(repayment) of debt, $m
  238
  946
  1,032
  1,113
  1,193
  1,271
  1,346
  1,421
  1,494
  1,566
  1,637
  1,709
  1,780
  1,853
  1,928
  2,004
  2,083
  2,164
  2,249
  2,338
  2,431
  2,528
  2,631
  2,739
  2,852
  2,972
  3,099
  3,232
  3,373
  3,521
  3,678
Issuance/(repurchase) of shares, $m
  20
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash from financing (excl. dividends), $m  
  99
  946
  1,032
  1,113
  1,193
  1,271
  1,346
  1,421
  1,494
  1,566
  1,637
  1,709
  1,780
  1,853
  1,928
  2,004
  2,083
  2,164
  2,249
  2,338
  2,431
  2,528
  2,631
  2,739
  2,852
  2,972
  3,099
  3,232
  3,373
  3,521
  3,678
Total cash flow (excl. dividends), $m
  223
  1,089
  1,200
  1,310
  1,421
  1,533
  1,647
  1,762
  1,878
  1,997
  2,117
  2,193
  2,319
  2,449
  2,583
  2,721
  2,864
  3,012
  3,167
  3,328
  3,496
  3,672
  3,856
  4,049
  4,251
  4,462
  4,684
  4,917
  5,162
  5,419
  5,689
Retained Cash Flow (-), $m
  111
  -111
  -117
  -126
  -135
  -144
  -153
  -161
  -170
  -178
  -186
  -194
  -202
  -211
  -219
  -228
  -237
  -246
  -255
  -266
  -276
  -287
  -299
  -311
  -324
  -338
  -352
  -367
  -383
  -400
  -418
Prev. year cash balance distribution, $m
 
  495
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash flow adjustment, $m
 
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash available for distribution, $m
 
  1,473
  1,082
  1,183
  1,285
  1,389
  1,494
  1,601
  1,709
  1,819
  1,931
  1,999
  2,117
  2,239
  2,364
  2,493
  2,627
  2,766
  2,911
  3,062
  3,220
  3,385
  3,557
  3,738
  3,927
  4,125
  4,332
  4,550
  4,779
  5,019
  5,271
Discount rate, %
 
  4.30
  4.52
  4.74
  4.98
  5.23
  5.49
  5.76
  6.05
  6.35
  6.67
  7.00
  7.35
  7.72
  8.11
  8.51
  8.94
  9.39
  9.86
  10.35
  10.87
  11.41
  11.98
  12.58
  13.21
  13.87
  14.56
  15.29
  16.05
  16.86
  17.70
PV of cash for distribution, $m
 
  1,412
  991
  1,030
  1,058
  1,077
  1,084
  1,081
  1,068
  1,045
  1,013
  949
  903
  851
  794
  732
  668
  602
  536
  472
  409
  350
  295
  245
  200
  160
  126
  98
  74
  55
  40
Current shareholders' claim on cash, %
  100
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0

Live Nation Entertainment, Inc. operates as a live entertainment company. The company operates through Concerts, Sponsorship & Advertising, Ticketing, and Artist Nation segments. The Concerts segment promotes live music events in its owned and/or operated venues, and in rented third-party venues; operates and manages music venues; and produces music festivals and creates associated content. The Sponsorship & Advertising segment sells international, national, and local sponsorships and placement of advertising, including signage, online advertising, and promotional programs, as well as media offerings, such as live streaming and music-related original content; and ads across the company’s distribution network of venues, events, and Websites. This segment also manages the development of strategic sponsorship programs, as well as develops, books, and produces custom events or programs for clients’ specific brands. The Ticketing segment manages the ticketing operations, including providing ticketing software and services to clients, and ticket resale services, as well as offers online access for customers relating to ticket and event information through its primary Websites livenation.com and ticketmaster.com. This segment sells tickets through Websites, mobile applications, ticket outlets, and telephone call centers. The Artist Nation segment provides management and other services to music artists; and creates and sells merchandise for music artists. As of December 31, 2016, the company owned, operated, or leased 98 entertainment venues and 130 other facilities in North America; and 33 entertainment venues and 107 other facilities internationally. The company was formerly known as Live Nation, Inc. and changed its name to Live Nation Entertainment, Inc. in January 2010. Live Nation Entertainment, Inc. was incorporated in 2005 and is headquartered in Beverly Hills, California.

FINANCIAL RATIOS  of  Live Nation Entertainment (LYV)

Valuation Ratios
P/E Ratio 2610.7
Price to Sales 0.9
Price to Book 7
Price to Tangible Book
Price to Cash Flow 13.1
Price to Free Cash Flow 18.8
Growth Rates
Sales Growth Rate 15.3%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate 16.1%
Cap. Spend. - 3 Yr. Gr. Rate 5.9%
Financial Strength
Quick Ratio 29
Current Ratio 0
LT Debt to Equity 200.7%
Total Debt to Equity 205.4%
Interest Coverage 1
Management Effectiveness
Return On Assets 0.7%
Ret/ On Assets - 3 Yr. Avg. -1.3%
Return On Total Capital 0.1%
Ret/ On T. Cap. - 3 Yr. Avg. -1.2%
Return On Equity 0.3%
Return On Equity - 3 Yr. Avg. -3%
Asset Turnover 1.3
Profitability Ratios
Gross Margin 27.2%
Gross Margin - 3 Yr. Avg. 30.4%
EBITDA Margin 6.6%
EBITDA Margin - 3 Yr. Avg. 6.2%
Operating Margin 2.2%
Oper. Margin - 3 Yr. Avg. 1.4%
Pre-Tax Margin 0.6%
Pre-Tax Margin - 3 Yr. Avg. -0.3%
Net Profit Margin 0%
Net Profit Margin - 3 Yr. Avg. -0.6%
Effective Tax Rate 58.3%
Eff/ Tax Rate - 3 Yr. Avg. 140.3%
Payout Ratio 0%

LYV stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the LYV stock intrinsic value calculation we used $8355 million for the last fiscal year's total revenue generated by Live Nation Entertainment. The default revenue input number comes from 2016 income statement of Live Nation Entertainment. You may change it if you feel that it should be adjusted for some unusual circumstances that are not expected to be repeated in the future or if you already know (from interim financial statements, for example) that this year's revenue is going to be quite different.

Revenue growth rate. Forecasted future revenue growth rate is the most important input parameter for the intrinsic value calculation. Unlike other input parameters that are reasonably expected to be in line with their historic averages or their historic trends, the revenue growth rate by and large is a wild card: nobody really knows what the company's revenue will be in the future. Of course, the level of unpredictability is different for different industries (utility companies being the most predictable and, thus, less risky).
    We use three input parameters to forecast the revenue growth rate in our LYV stock valuation model: a) initial revenue growth rate of 17% whose default value is the revenue growth rate in the most recent quarter compared to the quarterly revenue a year ago; b) terminal revenue growth rate of 5% whose default value is chosen to be close to the average nominal (i.e. not adjusted for inflation) GDP growth rate; and c) revenue decline factor of 0.9, which stipulates that revenue growth rate in each forecasted year will be equal to the difference of the revenue growth rate in the preceding year and the terminal revenue growth rate multiplied by this revenue decline factor (with the passage of time the revenue growth rate will be approaching the terminal revenue growth rate, but not quite reaching it - though the difference could be infinitesimally small).
    At the revenue decline factor of 1, the future revenue growth rate is forecasted to be constant and equal to the initial revenue growth rate. The smaller the revenue decline factor, the faster the revenue growth rate will approach the terminal revenue growth.

Discount rate. The discount rate is used for determining the present value of future cash flows: future cash flows are "discounted" as at normal conditions (that translate into positive expected return on investment) one dollar today is worth more than the same dollar in the future. Unlike all other valuation models, we use variable discount rate, i.e. it increases for each consecutive year. This is done to account for higher risk of cash flows coming in further in the future.
    The initial discount rate of 4.3%, whose default value for LYV is calculated based on our internal credit rating of Live Nation Entertainment, is applied to the cash flow expected to be received a year from now (well, actually, to be precise, in the financial year following the base year - the last year for which we have financial statements). For each consecutive year the discount rate is multiplied by the discount rate multiplier of 1.05, e.i. each year it increases by 5%. Feel free to change this number to correspond to your level of risk assessment of Live Nation Entertainment.
    By the way, it is easy to set the discount rate to be constant (this would make comparison with other valuation models easier): just set the discount rate multiplier equal to 1 and chose the magnitude of the initial discount rate to your liking.

Variable cost ratio is the ratio of variable costs (i.e. costs that fluctuate with fluctuation of the volume of production) to the revenue expressed as a percentage. In the calculation of intrinsic value of LYV stock the variable cost ratio is equal to 95.6%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $193 million in the base year in the intrinsic value calculation for LYV stock. These expenses increase with the level of inflation in subsequent years.

Interest rate on debt is the average all-in rate of interest paid by the company on its debt. It is set at 4.5% for Live Nation Entertainment.

Corporate tax rate of 27% is the nominal tax rate for Live Nation Entertainment. In reality, companies find ways to pay much less taxes than that or not to pay them at all.

Cash flow adjustment could be used for any adjustment the investor deems necessary. Most commonly we use this field to account for stock options-related effects in excess of what is reported on the company's income statement. The cash flow adjustment is expressed as a percentage of the revenue, and in the current valuation of the LYV stock is equal to 0%.

Production assets are the company's assets used for manufacturing products or provision of services. In the valuation model input table they are expressed as a percentage of revenue and for LYV are equal to 22.8%.

Life of production assets of 10 years is the average useful life of capital assets used in Live Nation Entertainment operations. It is used to calculate yearly capital expenditures needed to keep these assets in good order - we call it the maintenance CAPEX.

Working capital is the difference between the company's current assets and liabilities. In the model we use the ratio of working capital to revenue, which for LYV is equal to -10%. A negative number means that the company is apt at using financial resources of its suppliers and customers; a large positive number, on the other hand, means that it either provides in-kind financing to others or is not good at managing its inventories.

Book value of equity - $1126 million for Live Nation Entertainment - is used in calculation of the "floor" for intrinsic valuation based on the discounted cash flow (DCF) method. Even if the prospects are very bad for a company, its assets could always be sold now for their current fair market value.

Shares outstanding of 201.179 million for Live Nation Entertainment is needed to calculate the intrinsic value of one share.

Market capitalization is used here only for reference purposes and as a quick check that the share price and the number of shares outstanding numbers are correct - something especially to be cognizant about at stock splits. So, the market capitalization of Live Nation Entertainment at the current share price and the inputted number of shares is $7.7 billion.

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COMPANY NEWS

▶ Global Superstar Shania Twain Announces 2018 NOW Tour   [Aug-17-17 10:00AM  PR Newswire]
▶ Is Event Ticketing Next on Amazons To-Do List?   [Aug-13-17 08:40AM  24/7 Wall St.]
▶ Amazon wants to dethrone Ticketmaster   [01:40PM  Yahoo Finance Video]
▶ Company News For August 11, 2017   [09:58AM  Zacks]
▶ Cramer: Live Nation May Be the Best Play on Millennials   [Aug-10-17 07:01PM  TheStreet.com]
▶ TicketWeb Acquires Strobe Labs   [10:00AM  PR Newswire]
▶ Live Nation beats Street 2Q forecasts   [Aug-09-17 10:56PM  Associated Press]
▶ Live Nation beats the Street   [04:30PM  CNBC Videos]
▶ Live Nation signs 10-year deal with Hollywood Bowl   [Aug-07-17 04:50PM  American City Business Journals]
▶ Live Nation's Incredible Run May Not Be Over   [Jul-21-17 03:40PM  Barrons.com]
▶ The 3 Stocks on the MFM Team's Radar This Week   [Jul-18-17 06:40PM  Motley Fool]
▶ $200M Irving Music Factory project coming 'down to the wire,' for Labor Day opening   [Jul-13-17 04:35PM  American City Business Journals]
▶ Live Nation enters into partnership for new downtown Phoenix venue   [Jul-12-17 06:42PM  American City Business Journals]
▶ JAY-Z Announces 4:44 Tour   [10:00AM  PR Newswire]
▶ Why Live Nation Is Singing a Happy Tune This Summer   [Jul-05-17 04:17PM  Barrons.com]
▶ International entertainment promotions company inks deal with Buckhead Theatre   [Jun-27-17 03:15PM  American City Business Journals]
▶ Randy's Donuts, Odd Future strike co-branding deal with Live Nation   [Jun-22-17 05:15PM  American City Business Journals]
▶ Ruff Ryders Celebrates 20th Anniversary With U.S. Tour   [Jun-20-17 10:00AM  PR Newswire]
▶ Panic! At The Disco grosses $527K from Georgia show   [Jun-15-17 06:20AM  American City Business Journals]
▶ NFL weighs moving from Ticketmaster to open platform model   [Jun-08-17 09:25PM  American City Business Journals]
▶ Tracking value monster IAC's success   [06:47PM  CNBC Videos]
▶ Sacramento Kings, Live Nation consider taking over convention center management   [Jun-05-17 08:26PM  American City Business Journals]
▶ For Live Nation, Concerts Are Just the Start   [May-25-17 05:51PM  Barrons.com]
▶ Atlanta producer Ian Schumacher gears up for second showcase   [May-22-17 12:05PM  American City Business Journals]
▶ One Game Amazon Might Lose   [10:33AM  Barrons.com]
▶ How much did the Sting concert at The Tabernacle in Atlanta gross?   [May-16-17 03:25PM  American City Business Journals]
▶ Jay Z partners with Live Nation for $200 million touring partnership   [May-12-17 12:00PM  American City Business Journals]
Stock chart of LYV Financial statements of LYV
Valuation of Stocks

The paper VALUATION OF STOCKS: The Quest for Intrinsic Value provides a detailed description of our valuation model and discloses the calculation algorithm.

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