Intrinsic value of Live Nation Entertainment - LYV

Previous Close

$42.81

  Intrinsic Value

$112.80

stock screener

  Rating & Target

str. buy

+163%

Previous close

$42.81

 
Intrinsic value

$112.80

 
Up/down potential

+163%

 
Rating

str. buy

*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 8.8

 

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
  29.40
  26.96
  24.76
  22.79
  21.01
  19.41
  17.97
  16.67
  15.50
  14.45
  13.51
  12.66
  11.89
  11.20
  10.58
  10.02
  9.52
  9.07
  8.66
  8.30
  7.97
  7.67
  7.40
  7.16
  6.95
  6.75
  6.58
  6.42
  6.28
  6.15
Revenue, $m
  8,355
  10,811
  13,726
  17,125
  21,028
  25,445
  30,384
  35,843
  41,818
  48,301
  55,282
  62,750
  70,692
  79,098
  87,959
  97,266
  107,016
  117,206
  127,835
  138,909
  150,433
  162,417
  174,874
  187,820
  201,272
  215,253
  229,787
  244,898
  260,618
  276,977
  294,009
Variable operating expenses, $m
 
  10,284
  13,010
  16,188
  19,837
  23,968
  28,586
  33,691
  39,278
  45,341
  51,869
  58,677
  66,103
  73,964
  82,249
  90,953
  100,070
  109,598
  119,538
  129,892
  140,668
  151,875
  163,523
  175,628
  188,208
  201,281
  214,871
  229,002
  243,702
  258,999
  274,925
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
  10,482
  13,213
  16,396
  20,050
  24,186
  28,810
  33,920
  39,513
  45,582
  52,116
  58,930
  66,363
  74,230
  82,522
  91,233
  100,357
  109,892
  119,839
  130,201
  140,984
  152,199
  163,855
  175,969
  188,557
  201,639
  215,238
  229,378
  244,087
  259,394
  275,330
Operating income, $m
  181
  329
  513
  729
  977
  1,259
  1,574
  1,922
  2,305
  2,719
  3,167
  3,820
  4,329
  4,868
  5,437
  6,034
  6,660
  7,314
  7,997
  8,708
  9,448
  10,218
  11,019
  11,851
  12,715
  13,614
  14,549
  15,520
  16,531
  17,584
  18,679
EBITDA, $m
  584
  781
  1,040
  1,342
  1,691
  2,085
  2,527
  3,015
  3,551
  4,132
  4,758
  5,427
  6,140
  6,895
  7,690
  8,526
  9,401
  10,317
  11,272
  12,267
  13,302
  14,379
  15,499
  16,662
  17,872
  19,129
  20,435
  21,794
  23,208
  24,679
  26,211
Interest expense (income), $m
  97
  102
  125
  199
  285
  384
  496
  622
  760
  912
  1,077
  1,254
  1,444
  1,645
  1,859
  2,084
  2,320
  2,568
  2,826
  3,096
  3,378
  3,670
  3,974
  4,291
  4,619
  4,961
  5,316
  5,685
  6,069
  6,468
  6,883
Earnings before tax, $m
  48
  228
  389
  530
  692
  874
  1,077
  1,301
  1,544
  1,807
  2,090
  2,566
  2,885
  3,223
  3,578
  3,950
  4,340
  4,746
  5,170
  5,612
  6,071
  6,548
  7,044
  7,560
  8,096
  8,653
  9,233
  9,835
  10,463
  11,116
  11,796
Tax expense, $m
  28
  61
  105
  143
  187
  236
  291
  351
  417
  488
  564
  693
  779
  870
  966
  1,067
  1,172
  1,282
  1,396
  1,515
  1,639
  1,768
  1,902
  2,041
  2,186
  2,336
  2,493
  2,656
  2,825
  3,001
  3,185
Net income, $m
  3
  166
  284
  387
  505
  638
  786
  949
  1,127
  1,319
  1,526
  1,873
  2,106
  2,353
  2,612
  2,884
  3,168
  3,465
  3,774
  4,096
  4,432
  4,780
  5,142
  5,519
  5,910
  6,317
  6,740
  7,180
  7,638
  8,114
  8,611

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
  6,778
  8,606
  10,737
  13,184
  15,953
  19,049
  22,472
  26,218
  30,283
  34,660
  39,341
  44,321
  49,591
  55,147
  60,982
  67,095
  73,483
  80,148
  87,090
  94,315
  101,829
  109,639
  117,755
  126,190
  134,955
  144,067
  153,541
  163,397
  173,653
  184,332
Adjusted assets (=assets-cash), $m
  5,237
  6,778
  8,606
  10,737
  13,184
  15,953
  19,049
  22,472
  26,218
  30,283
  34,660
  39,341
  44,321
  49,591
  55,147
  60,982
  67,095
  73,483
  80,148
  87,090
  94,315
  101,829
  109,639
  117,755
  126,190
  134,955
  144,067
  153,541
  163,397
  173,653
  184,332
Revenue / Adjusted assets
  1.595
  1.595
  1.595
  1.595
  1.595
  1.595
  1.595
  1.595
  1.595
  1.595
  1.595
  1.595
  1.595
  1.595
  1.595
  1.595
  1.595
  1.595
  1.595
  1.595
  1.595
  1.595
  1.595
  1.595
  1.595
  1.595
  1.595
  1.595
  1.595
  1.595
  1.595
Average production assets, $m
  1,905
  2,465
  3,130
  3,905
  4,794
  5,802
  6,928
  8,172
  9,535
  11,013
  12,604
  14,307
  16,118
  18,034
  20,055
  22,177
  24,400
  26,723
  29,146
  31,671
  34,299
  37,031
  39,871
  42,823
  45,890
  49,078
  52,391
  55,837
  59,421
  63,151
  67,034
Working capital, $m
  214
  -1,633
  -2,073
  -2,586
  -3,175
  -3,842
  -4,588
  -5,412
  -6,315
  -7,293
  -8,348
  -9,475
  -10,674
  -11,944
  -13,282
  -14,687
  -16,159
  -17,698
  -19,303
  -20,975
  -22,715
  -24,525
  -26,406
  -28,361
  -30,392
  -32,503
  -34,698
  -36,980
  -39,353
  -41,824
  -44,395
Total debt, $m
  2,313
  2,775
  4,420
  6,338
  8,540
  11,033
  13,819
  16,900
  20,271
  23,930
  27,869
  32,082
  36,564
  41,307
  46,307
  51,559
  57,060
  62,810
  68,808
  75,056
  81,559
  88,321
  95,350
  102,655
  110,246
  118,135
  126,335
  134,862
  143,732
  152,963
  162,574
Total liabilities, $m
  5,638
  6,100
  7,745
  9,663
  11,865
  14,358
  17,144
  20,225
  23,596
  27,255
  31,194
  35,407
  39,889
  44,632
  49,632
  54,884
  60,385
  66,135
  72,133
  78,381
  84,884
  91,646
  98,675
  105,980
  113,571
  121,460
  129,660
  138,187
  147,057
  156,288
  165,899
Total equity, $m
  1,126
  678
  861
  1,074
  1,318
  1,595
  1,905
  2,247
  2,622
  3,028
  3,466
  3,934
  4,432
  4,959
  5,515
  6,098
  6,709
  7,348
  8,015
  8,709
  9,432
  10,183
  10,964
  11,776
  12,619
  13,496
  14,407
  15,354
  16,340
  17,365
  18,433
Total liabilities and equity, $m
  6,764
  6,778
  8,606
  10,737
  13,183
  15,953
  19,049
  22,472
  26,218
  30,283
  34,660
  39,341
  44,321
  49,591
  55,147
  60,982
  67,094
  73,483
  80,148
  87,090
  94,316
  101,829
  109,639
  117,756
  126,190
  134,956
  144,067
  153,541
  163,397
  173,653
  184,332
Debt-to-equity ratio
  2.054
  4.090
  5.140
  5.900
  6.480
  6.920
  7.250
  7.520
  7.730
  7.900
  8.040
  8.150
  8.250
  8.330
  8.400
  8.450
  8.500
  8.550
  8.590
  8.620
  8.650
  8.670
  8.700
  8.720
  8.740
  8.750
  8.770
  8.780
  8.800
  8.810
  8.820
Adjusted equity ratio
  -0.077
  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
  0.100

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  3
  166
  284
  387
  505
  638
  786
  949
  1,127
  1,319
  1,526
  1,873
  2,106
  2,353
  2,612
  2,884
  3,168
  3,465
  3,774
  4,096
  4,432
  4,780
  5,142
  5,519
  5,910
  6,317
  6,740
  7,180
  7,638
  8,114
  8,611
Depreciation, amort., depletion, $m
  403
  452
  526
  613
  713
  827
  953
  1,093
  1,246
  1,412
  1,591
  1,608
  1,811
  2,026
  2,253
  2,492
  2,742
  3,003
  3,275
  3,559
  3,854
  4,161
  4,480
  4,812
  5,156
  5,514
  5,887
  6,274
  6,677
  7,096
  7,532
Funds from operations, $m
  679
  618
  810
  1,000
  1,219
  1,465
  1,739
  2,042
  2,373
  2,731
  3,116
  3,481
  3,917
  4,379
  4,865
  5,375
  5,910
  6,467
  7,049
  7,655
  8,285
  8,941
  9,622
  10,330
  11,066
  11,831
  12,626
  13,454
  14,314
  15,210
  16,143
Change in working capital, $m
  82
  -371
  -440
  -513
  -589
  -667
  -746
  -824
  -902
  -979
  -1,054
  -1,128
  -1,199
  -1,269
  -1,338
  -1,405
  -1,472
  -1,539
  -1,605
  -1,672
  -1,740
  -1,810
  -1,881
  -1,955
  -2,031
  -2,111
  -2,195
  -2,282
  -2,374
  -2,470
  -2,572
Cash from operations, $m
  597
  989
  1,250
  1,514
  1,808
  2,132
  2,485
  2,867
  3,275
  3,710
  4,171
  4,608
  5,117
  5,648
  6,203
  6,781
  7,382
  8,006
  8,654
  9,327
  10,026
  10,751
  11,503
  12,285
  13,098
  13,942
  14,821
  15,735
  16,688
  17,680
  18,715
Maintenance CAPEX, $m
  0
  -214
  -277
  -352
  -439
  -539
  -652
  -778
  -918
  -1,071
  -1,237
  -1,416
  -1,608
  -1,811
  -2,026
  -2,253
  -2,492
  -2,742
  -3,003
  -3,275
  -3,559
  -3,854
  -4,161
  -4,480
  -4,812
  -5,156
  -5,514
  -5,887
  -6,274
  -6,677
  -7,096
New CAPEX, $m
  -180
  -560
  -665
  -775
  -890
  -1,007
  -1,126
  -1,245
  -1,362
  -1,478
  -1,592
  -1,703
  -1,811
  -1,917
  -2,020
  -2,122
  -2,223
  -2,323
  -2,424
  -2,525
  -2,627
  -2,732
  -2,840
  -2,952
  -3,067
  -3,188
  -3,314
  -3,446
  -3,584
  -3,730
  -3,883
Cash from investing activities, $m
  -426
  -774
  -942
  -1,127
  -1,329
  -1,546
  -1,778
  -2,023
  -2,280
  -2,549
  -2,829
  -3,119
  -3,419
  -3,728
  -4,046
  -4,375
  -4,715
  -5,065
  -5,427
  -5,800
  -6,186
  -6,586
  -7,001
  -7,432
  -7,879
  -8,344
  -8,828
  -9,333
  -9,858
  -10,407
  -10,979
Free cash flow, $m
  171
  215
  309
  387
  479
  586
  707
  844
  995
  1,161
  1,342
  1,489
  1,698
  1,921
  2,157
  2,405
  2,667
  2,941
  3,228
  3,528
  3,840
  4,164
  4,502
  4,854
  5,219
  5,598
  5,993
  6,403
  6,830
  7,274
  7,736
Issuance/(repayment) of debt, $m
  238
  515
  1,645
  1,918
  2,202
  2,493
  2,787
  3,080
  3,372
  3,658
  3,939
  4,214
  4,481
  4,743
  5,000
  5,252
  5,501
  5,750
  5,998
  6,248
  6,503
  6,762
  7,029
  7,305
  7,591
  7,889
  8,201
  8,527
  8,870
  9,231
  9,611
Issuance/(repurchase) of shares, $m
  20
  860
  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
  1,375
  1,645
  1,918
  2,202
  2,493
  2,787
  3,080
  3,372
  3,658
  3,939
  4,214
  4,481
  4,743
  5,000
  5,252
  5,501
  5,750
  5,998
  6,248
  6,503
  6,762
  7,029
  7,305
  7,591
  7,889
  8,201
  8,527
  8,870
  9,231
  9,611
Total cash flow (excl. dividends), $m
  223
  1,590
  1,953
  2,305
  2,681
  3,079
  3,494
  3,924
  4,366
  4,819
  5,281
  5,703
  6,180
  6,664
  7,156
  7,657
  8,168
  8,691
  9,226
  9,776
  10,342
  10,927
  11,531
  12,158
  12,810
  13,487
  14,194
  14,930
  15,700
  16,505
  17,346
Retained Cash Flow (-), $m
  111
  -1,026
  -183
  -213
  -245
  -277
  -310
  -342
  -375
  -406
  -438
  -468
  -498
  -527
  -556
  -584
  -611
  -639
  -666
  -694
  -723
  -751
  -781
  -812
  -843
  -877
  -911
  -947
  -986
  -1,026
  -1,068
Prev. year cash balance distribution, $m
 
  1,474
  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
 
  2,038
  1,771
  2,092
  2,437
  2,802
  3,184
  3,582
  3,992
  4,413
  4,843
  5,235
  5,682
  6,137
  6,601
  7,074
  7,557
  8,052
  8,560
  9,082
  9,620
  10,175
  10,750
  11,347
  11,966
  12,611
  13,282
  13,983
  14,714
  15,479
  16,279
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
 
  1,954
  1,621
  1,821
  2,006
  2,172
  2,311
  2,420
  2,495
  2,535
  2,539
  2,486
  2,425
  2,333
  2,216
  2,077
  1,920
  1,752
  1,576
  1,398
  1,222
  1,052
  892
  744
  609
  491
  388
  300
  228
  169
  123
Current shareholders' claim on cash, %
  100
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0

Live Nation Entertainment, Inc. is a live entertainment company. The Company's businesses consist of the promotion of live events, including ticketing, sponsorship and advertising. Its segments include Concerts, Sponsorship & Advertising, Ticketing and Artist Nation. The Concerts segment is engaged in promotion of live music events in its owned or operated venues and in rented third-party venues; operation and management of music venues; production of music festivals, and creation of associated content. The Ticketing segment is an agency business that sells tickets for events on behalf of its clients. The Artist Nation segment provides management services to music artists in exchange for a commission on the earnings of artists. The Sponsorship & Advertising segment employs sales force that creates and maintains relationships with sponsors to allow businesses to reach customers through its concert, venue, artist relationship and ticketing assets, including advertising on its Websites.

FINANCIAL RATIOS  of  Live Nation Entertainment (LYV)

Valuation Ratios
P/E Ratio 2912.1
Price to Sales 1
Price to Book 7.8
Price to Tangible Book
Price to Cash Flow 14.6
Price to Free Cash Flow 21
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 29.4% 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 8.9 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 -15.1%. 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 206.25 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 $8.8 billion.

RELATED COMPANIES Price Int.Val. Rating
MSG Madison Square 209.87 117.64  sell
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COMPANY NEWS

▶ Live Nation misses 3Q profit forecasts   [Nov-02-17 04:29PM  Associated Press]
▶ U2 The Joshua Tree Tour 2017   [Oct-25-17 10:05PM  PR Newswire]
▶ StubHub to join NFL secondary market under Ticketmaster system   [Oct-24-17 10:35PM  American City Business Journals]
▶ Profile: Amy Howe, COO at Ticketmaster   [07:40PM  American City Business Journals]
▶ NFL, Ticketmaster finish 5-year extension, move to new open model   [Oct-18-17 10:25PM  American City Business Journals]
▶ Live Nation fires executive who pleaded guilty to voyeurism   [01:45PM  American City Business Journals]
▶ [$$] Concert Industry Rethinks Security After Las Vegas   [Oct-13-17 11:21PM  The Wall Street Journal]
▶ 3 Growth Stocks With Virtual Monopolies   [Oct-12-17 09:30PM  Motley Fool]
▶ Harvey Weinstein ousted from The Weinstein Company   [Oct-09-17 10:27AM  Yahoo Finance Video]
▶ Ticketmaster sues scalpers for using bots to sweep up Hamilton tickets   [Oct-03-17 03:05PM  American City Business Journals]
▶ Statement From Route 91 Harvest Festival   [12:48AM  PR Newswire]
▶ Live Nation Statement on Tom Petty   [Oct-02-17 06:15PM  PR Newswire]
▶ Live Nation Welcomes Lesley Olenik as VP of Touring   [Sep-22-17 05:25PM  PR Newswire]
▶ Live Nation opens Irving's new entertainment hub at the Music Factory (Video)   [Sep-11-17 03:55PM  American City Business Journals]
▶ 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]
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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