Life finally felt normal this past weekend when the Foo Fighters played a show at Madison Square Garden. It was the first full-capacity concert at the arena in more than a year — 460 days, to be exact.
And this is really just the beginning for live event companies like Live Nation, Eventbrite and Madison Square Garden Entertainment, which are finally starting to see business return after that year-plus pause. Some of the stocks of those companies have been on a steady uptrend since the end of 2020, when investors began betting on an eventual return to normal.
Back in February, VIP looked at the gains of the live event stocks and speculated there may not be much more room to run. But almost five months since that analysis, the live event stocks are still rising, and with the accelerating pace of vaccinations, a return to pre-pandemic levels is just around the corner. And that will mean more gains for live event stocks, at least through the end of this year.
For context on just how bad things were, Ticketmaster parent company Live Nation saw total revenue plunge from $1.36 billion in Q1 of 2020 to just $290 million a year later. Even though $290 million sounds like a fraction of what it used to be, that’s after a steady increase over the past three quarters of getting hammered as a result of the pandemic.
It was a similar story for Eventbrite. Following normal sales and paid ticket volume level during the first quarter of 2020, the pandemic clobbered the company’s financials. Net revenue got cut in half and sank from $49 million in Q1 2020 to $22 million in Q3 before bouncing back a little to $27 million last quarter.
Things have taken a turn for the better. The COVID situation looks much different with vaccine rollout accelerating drastically over the past several months. So far, approximately 2.68 billion vaccine doses have been administered globally, according to Johns Hopkins data.
The public is growing more comfortable with the idea of attending concerts, according to weekly survey data released by Morning Consult. Demand is high. For instance, the popular Coachella Festival is officially coming back next April, and tickets sold out immediately after going on sale earlier this month.
As a result, investors are growing more confident in the strength of live event stocks’ rebound. Live Nation shares have rallied 25% so far this year and 93% over the past 12 months. Meanwhile, Eventbrite stock rose 17% in 2021 and a whopping 110% in the past year.
MSG Entertainment, however, hasn’t quite performed at the same level as its peers. The stock was down 13% year-to-date but gained 16% over the past 12 months. It is worth noting that Madison Square Garden Company split into two separate businesses at the end of April 2020. MSG Entertainment is the business that consists of live entertainment brands and events.
The live event space is showing no signs of cooling off. So while MSG Entertainment may be lagging behind for now, it might be a good way to play catch-up for investors looking to cash in on the live entertainment rebound under way.