Live Nation Entertainment (NYSE:LYV) shareholders have earned a 15% CAGR over the last five years

The simplest way to invest in stocks is to buy exchange traded funds. But in our experience, buying the right stocks can give your wealth a significant boost. For example, the Live Nation Entertainment, Inc. (NYSE:LYV) share price is 98% higher than it was five years ago, which is more than the market average. We’re also happy to report the stock is up a healthy 66% in the last year.

Now it’s worth having a look at the company’s fundamentals too, because that will help us determine if the long term shareholder return has matched the performance of the underlying business.

Check out our latest analysis for Live Nation Entertainment

While Live Nation Entertainment made a small profit, in the last year, we think that the market is probably more focussed on the top line growth at the moment. As a general rule, we think this kind of company is more comparable to loss-making stocks, since the actual profit is so low. For shareholders to have confidence a company will grow profits significantly, it must grow revenue.

In the last 5 years Live Nation Entertainment saw its revenue grow at 32% per year. Even measured against other revenue-focussed companies, that’s a good result. While the compound gain of 15% per year is good, it’s not unreasonable given the strong revenue growth. If the strong revenue growth continues, we’d hope to see the share price to follow, in time. Of course, you’ll have to research the business more fully to figure out if this is an attractive opportunity.

The image below shows how earnings and revenue have tracked over time (if you click on the image you can see greater detail).

Live Nation Entertainment is well known by investors, and plenty of clever analysts have tried to predict the future profit levels. You can see what analysts are predicting for Live Nation Entertainment in this interactive graph of future profit estimates.

We’re pleased to report that Live Nation Entertainment shareholders have received a total shareholder return of 66% over one year. That’s better than the annualised return of 15% over half a decade, implying that the company is doing better recently. In the best case scenario, this may hint at some real business momentum, implying that now could be a great time to delve deeper. I find it very interesting to look at share price over the long term as a proxy for business performance. But to truly gain insight, we need to consider other information, too. Even so, be aware that Live Nation Entertainment is showing 1 warning sign in our investment analysis , you should know about…

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