Live Nation Entertainment, Inc.LYVNYSE

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DCF Valuation

DCF Valuation Summary

Strong Buy

Fair Value: $642.91 per share(market-calibrated)

+296.7%

Upside to Fair Value

Current

$162.07

Pure Model

$677.94

Fair Value

$642.91

Bull Case

$981.60

Bear Case

$457.40

Market Reality Check

Model Terminal Growth

3.00%

Market-Implied Growth

0.50%

Calibrated Growth

2.13%

Fair value uses 65% model / 35% market-implied terminal growth. Pure model: $677.94.

What's Driving This Ratingfor LYV

✓

CapEx already efficient

CapEx at 2.16% of revenue is already at or below sector maintenance level. No normalization needed — cash conversion is already strong.

↑

Margin expansion modeled

Current EBIT margin is 14.86% — below the sector mature average of 22.00%. Model expands margins as the business scales and operating leverage kicks in. Year 10 EBIT reaches $13.9B (19.66% margin).

→

Moderate revenue growth

Analyst consensus projects 9.11% revenue growth, fading to 3.00% by Year 10. Revenue reaches $70.6B (vs $25.2B today).

↔

Perpetuity and exit methods disagree

Perpetuity growth gives $544.38/share (22.0x terminal FCF) while exit multiple gives $811.51/share (35.8x terminal FCF). The 22x EV/EBITDA exit reflects current market multiples, while the perpetuity method with 3.00% growth is more conservative. The base case averages both methods.

🎯

Market pricing in lower growth than model

The market implies only 0.50% perpetual growth — 250bps below the model's 3.00%. This suggests the market sees headwinds or risks not in the model.

✓

Strong cash flow conversion

Year 10 FCF/EBITDA conversion of 61.51% indicates efficient cash generation. FCF reaches $9.4B by Year 10 (13.35% FCF margin).

Weighted Average Cost of Capital (WACC)

Cost of Equity (CAPM)

Risk-Free Rate (Rf)4.50%

Beta (β)1.15

Market Risk Premium4.50%

*Using current implied premium (4.5% per Damodaran 2026), not historical (6.5%)

Cost of Equity (Re)9.65%

Cost of Debt

Pre-tax Cost of Debt2.50%

Tax Rate30.00%

After-tax Cost of Debt1.75%

Equity Weight (E/V)75.13%

Debt Weight (D/V)24.87%

WACC Calculation

WACC = (E/V × Re) + (D/V × Rd × (1-Tc))

WACC = (75.13% × 9.65%) + (24.87% × 1.75%)

= 7.69%

10-Year Free Cash Flow Projections(showing years 1, 3, 5, 7, 10)

Year	Year 1	Year 3	Year 5	Year 7	Year 10
Revenue	$27.5B	$32.8B	$44.7B	$58.8B	$70.6B
EBIT	$4.1B	$4.9B	$6.6B	$10.2B	$13.9B
Tax	$1.2B	$1.5B	$2.0B	$3.1B	$4.2B
NOPAT	$2.9B	$3.4B	$4.7B	$7.2B	$9.7B
+ Depreciation	$561M	$669M	$913M	$1.2B	$1.4B
- Capex	$595M	$709M	$967M	$1.3B	$1.5B
- Δ NWC	$230M	$274M	$734M	$675M	$206M
Free Cash Flow	$2.6B	$3.1B	$3.9B	$6.4B	$9.4B
Discount Factor	0.929	0.801	0.691	0.595	0.477
Present Value	$2.4B	$2.5B	$2.7B	$3.8B	$4.5B

FCF Formula: Free Cash Flow = NOPAT + Depreciation - Capex - Change in Net Working Capital

Terminal Value Calculation

Perpetuity Growth Method

Year 10 FCF$9.4B

Terminal Growth Rate3.00%

WACC7.69%

TV = FCF₁₀ × (1+g) / (WACC-g)

Terminal Value$207.1B

PV of Terminal Value$98.7B

Exit Multiple Method

Year 10 EBITDA$15.3B

Exit Multiple (EV/EBITDA)22.0x

TV = EBITDA₁₀ × Exit Multiple

Terminal Value$336.9B

PV of Terminal Value$160.7B

Valuation Summary

Perpetuity Growth Method

PV of Projected FCFs$32.8B

PV of Terminal Value$98.7B

Enterprise Value$131.5B

(-) Net Debt$5.3B

Equity Value$126.2B

Shares Outstanding232M

Price per Share$544.38

Exit Multiple Method

PV of Projected FCFs$32.8B

PV of Terminal Value$160.7B

Enterprise Value$193.5B

(-) Net Debt$5.3B

Equity Value$188.1B

Shares Outstanding232M

Price per Share$811.51

Pure Model Fair Value

$677.94

Average of perpetuity growth and exit multiple methods (before market calibration)

Sensitivity AnalysisPrice per Share

WACC ↓ / Growth →	2.00%	2.50%	3.00%	3.50%	4.00%
5.69%	$877.48	$930.06	$1,002.22	$1,107.38	$1,128.89
6.69%	$738.86	$767.78	$804.55	$852.86	$919.15
7.69%	$638.79	$656.48	$677.94	$704.54	$738.34
8.69%	$561.32	$572.92	$586.57	$602.85	$622.60
9.69%	$498.63	$506.63	$515.83	$526.52	$539.08

How to read: This table shows how the valuation changes with different WACC (discount rate) and terminal growth rate assumptions. Green = undervalued, Red = overvalued.

Scenario Analysis

Bear Case

$457.40

182.2% vs current

• -25% vs analyst consensus
• Terminal growth: 2.5%
• Beta: 1.43

Base Case

$677.94

318.3% vs current

• Analyst consensus
• Terminal growth: 3.0%
• Beta: 1.15

Bull Case

$981.60

505.7% vs current

• +25% vs analyst consensus
• Terminal growth: 3.5%
• Beta: 0.97

Key Assumptions & Drivers✓ Using Analyst Consensus Estimates• Communication Services Sector

Growth Assumptions (Select Years)

Year 1 Revenue Growth9.11%

Year 3 Revenue Growth9.13%

Year 5 Revenue Growth19.65%

Year 7 Revenue Growth12.99%

Year 10 Revenue Growth3.00%

Terminal Growth Rate3.00%

Margin & Efficiency

Current EBIT Margin14.86%

Terminal EBIT Margin22.00%

Tax Rate30.00%

Historical Capex / Rev2.16%

NWC / Revenue10.00%

Key Drivers: Revenue growth, operating margin expansion, capex efficiency, and working capital management are the primary drivers of cash flow generation. Terminal value assumptions significantly impact final valuation.

Institutional-Grade Methodology

Actual Company Data: Revenue, EBIT, Capex, NWC, Tax Rate, Interest Expense, Beta

Market Assumptions: Risk-free: 4.5% (10Y), MRP: 4.5% (Damodaran 2026), Exit: 22x EV/EBITDA (Communication Services sector)

This DCF model is for informational purposes only. Projections are based on assumptions that may not materialize. Past performance does not guarantee future results. Consult a financial advisor before making investment decisions.

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