Live entertainment operator Live Nation Entertainment (NYSE:LYV) stock has been a strong 2021 performer as the reopening gets underway with the acceleration of COVID vaccinations. Concerts and live performances were an epicenter segment during the COVID-19 pandemic as capacity restrictions and stay-at-home mandates made live events an impossibility. As the reopening accelerates, the sharp recovery continues as evidenced by June 2021 being the fourth-best month in Ticketmaster history underscoring the extent of the pent-up demand for live events. Fears of another surge from the Delta variant have not deterred the recovery so far. Prudent investors seeking exposure in the largest player in the live concert events segment can watch for opportunistic pullbacks in shares of Live Nation.
Q2 2021 Earnings Release
On Aug. 3, 2021, Live Nation released its fiscal second-quarter 2021 results for the quarter ending June 2021. The Company reported an GAAP earnings-per-share (EPS) loss of (-$0.90) beating consensus analyst estimates for a loss of (-$1.20), beating estimates by $0.30. Revenues rose 677.2% year-over-year (YOY) to $575.9 million, beating analyst estimates for $527.52 million. Event-related deferred revenue rose $650 million to $2.1 billion. Adjusted operating income returned to profitability. Concerts pipeline for 2022 is up double digits from 2019 with touring plans extending into 2023 and 2024. Ticketmaster North America had its fourth best month in history. Live Nation CEO Michael Rapino stated:
“As communities reopen, we're seeing the pent-up demand for live events play out as artists and fans are eager to re-connect in person. In the U.S. and the U.K., we are seeing strong ticket sales and the restart of our concerts and festivals, highlighted over the past weekends by Lollapalooza and Rolling Loud in the U.S. and Latitude in the U.K. hosting a combined three quarters of a million fans. With vaccine rollouts increasing throughout Canada and Europe, we expect additional markets to open more broadly in the coming months. The momentum for the return to live events has been building every month, with ticket sales and concert attendance pacing faster than expected, underscoring the strength and resiliency of the concert business and live events in general. This progress, combined with our cost discipline, has enabled us to deliver positive adjusted operating income for the second quarter, well ahead of where we thought we would for this quarter. We expect to see further ramp-up accelerate through the rest of the year, with improving operating income and all segments returning to adjusted operating income profitability for the second half of the year, setting us up for a full-scale 2022.”
Conference Call Takeaways
CEO Rapino set the tone:
“As our revenue is rebounding, we continue to evolve our business to maximize opportunities and the global recovery and strengthen our flywheel. We have structurally reduced our cost basis by $200 million, making us more nimble and converting more of our revenue AOI. We have integrated our Ticketmaster team globally, enabling us to work toward a global product roadmap that will both reduce our costs and increase our flexibility and speed to deploy new client tools and approve our marketplace experience. And we continue to build our direct to consumer business initiatives ranging from streaming concerts NFTs to artists merchandise, bringing more value to artists and deepening fan relationships. These enhancements combined with our strongest supply and demand dynamics our industry has ever seen are fueling our core flywheel strategy and setting us up for multiple years of growth, attendance revenue, and AOI.”
He provided insights moving forward:
“Looking forward to 2022 and that 2023, all our leading indicators continue to point to a roaring era for concerts and other live events. Starting with our Concerts division, every major venue type arenas, amphitheaters, and stadiums, our pipeline indicating double-digit growth in our show count and ticket sales relative to 2019 levels. In some cases, our pipeline is so strong, we are extending our planning into 2023 and even beginning to discuss tours that extended to 2024. The same time, Ticketmaster's leading edge technology continues to attract new clients, adding 11 million net new feed bearing tickets so far this year, already surpassing any previous full year growth. As a result, Ticketmaster is set to benefit in 2022 from both increased Live Nation concert ticket sales, as well as additional sales from new clients.”
LYV Opportunistic Pullback Levels
Using the rifle charts on the weekly and daily time frames provides a precision view of the landscape for LYV stock. The weekly rifle chart downtrend has stalled as the 5-period moving average (MA) sloping up at $82.60. The weekly peaked out near the $94.32 Fibonacci (fib) level as the weekly stochastic slipped under the 80-band. The weekly stochastic is now crossing back up through the 40-band. The weekly market structure low (MSL) buy triggered above $82.26. The weekly upper Bollinger Bands (BBs) sit at $89.25. The daily rifle chart uptrend has a rising 5-period MA at $85.34 with a rising 15-period MA at $83.03. The daily stochastic is rising through the 80-band. Prudent investors can watch for opportunistic pullback levels at the $84.02 fib, $82.26 fib, $80.46, $79.47 fib, $77.96 fib, and the $76.27 fib level. The upside trajectories range from the $98.55 fib up to the $117.46 level.