The COVID-19 pandemic adversely affected entertainment companies last year, particularly movie theaters, production studios, and live entertainment organizations. entertainment houses remained closed for several months due to…
social distancing mandates and other restrictions. Consequently, global theatrical revenue declined 71.6% year-over-year to $12 billion in 2020. Also, theatrical entertainment accounted for only 15% of the total global entertainment revenue, compared to 43% in 2019.
While the industry has attracted record foot traffic over the past few months, the resurgence of COVID-19 cases is threatening the progress the industry has made this year. Entertainment companies are concerned about a decline in foot traffic in the coming months. The pandemic has also accelerated the shift toward digital entertainment, which is expected to affect the demand for in-person entertainment companies for an extended period.
Thus, we think it is better for now to avoid the stocks of Live Nation Entertainment, Inc. (LYV – Get Rating), AMC Entertainment Holdings, Inc. (AMC – Get Rating), Madison Square Garden Sports Corp. (MSGS – Get Rating), and Six Flags Entertainment Corporation (SIX – Get Rating).
LYV is a Beverly Hills, Calif.-based live entertainment company. Its businesses consist of the promotion of live events, including ticketing, sponsorship, and advertising.
LYV’s operating loss declined 78.4% year-over-year to $127.29 million in its fiscal second quarter, ended June 30. Its net loss and net loss per share stood at $195.67 million and $0.90, respectively. For the six months ended June 30, its revenues declined 39.8% year-over-year to $866.56 million.
A $4.89 billion consensus revenue estimate for the current year represents a 162.7% increase year-over-year. However, the company’s EPS is expected to remain negative at least in the current year.
LYV stock price has declined 9.8% over the past six months to close yesterday’s trading session at $79.50. The stock has slumped 5.4% over the past five days.
LYV has a D grade for Value and Stability in our proprietary POWR Ratings system. POWR Ratings are calculated by considering 118 distinct factors, with each factor weighted to an optimal degree. Among the 14 stocks in the F-rated Entertainment – Sports & Theme Parks industry, LYV is ranked #6.
Click here to view additional LYV ratings for Growth, Momentum, Sentiment, and Quality.
AMC, through its subsidiaries, is involved in the theatrical exhibition business. It licenses first-run films from distributors owned by film production companies and independent distributors on a film-by-film and theatre-by-theatre basis. It is headquartered in Leawood, Kans.
On July 19, AMC announced its agreement to reopen The Grove Theater and The Americana at Brand Theater in the Los Angeles area. However, rising COVID-19 cases pose a threat to the operationality of the theater, owing to the potential for a re-introduction of pandemic restrictions.
Most of AMC’s theater operations were suspended for the first two months of the second quarter due to the pandemic and did not reopen until early June. This lag is observable in its recent quarterly financials. Its operating cost and expenses increased 51.1% from their year-ago value to $741.3 million in its fiscal second quarter, ended June 30. AMC’s net loss and net loss per share came in at $343.60 million and $0.71, respectively.
Analysts expect the company’s EPS to remain…
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