Roku (NASDAQ: ROKU) and Live Nation Entertainment (NYSE:LYV) are both mid-cap entertainment production equipment & services companies, but which is the superior investment? We will compare the two businesses based on the strength of their dividends, risk, analyst recommendations, earnings, valuation, profitability and institutional ownership.

Valuation & Earnings

This table compares Roku and Live Nation Entertainment’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio NetIncome Earnings Per Share Price/Earnings Ratio
Roku $398.64 million 7.90 -$42.75 million ($9.47) -3.51
Live Nation Entertainment $8.35 billion 1.11 -$47.01 million $0.02 2,239.62

Roku has higher revenue, but lower earnings than Live Nation Entertainment. Roku is trading at a lower price-to-earnings ratio than Live Nation Entertainment, indicating that it is currently the more affordable of the two stocks.

Institutional & Insider Ownership

0.7% of Roku shares are held by institutional investors. Comparatively, 68.3% of Live Nation Entertainment shares are held by institutional investors. 4.8% of Live Nation Entertainment shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.

Analyst Recommendations

This is a breakdown of current ratings and recommmendations for Roku and Live Nation Entertainment, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Roku 0 5 2 0 2.29
Live Nation Entertainment 0 2 8 0 2.80

Roku currently has a consensus target price of $26.20, suggesting a potential downside of 21.20%. Live Nation Entertainment has a consensus target price of $42.00, suggesting a potential downside of 6.19%. Given Live Nation Entertainment’s stronger consensus rating and higher possible upside, analysts clearly believe Live Nation Entertainment is more favorable than Roku.

Profitability

This table compares Roku and Live Nation Entertainment’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Roku N/A N/A N/A
Live Nation Entertainment 0.50% 3.33% 0.63%

Summary

Live Nation Entertainment beats Roku on 10 of the 12 factors compared between the two stocks.

Roku Company Profile

Roku, Inc. is a United States-based company engaged in creating streaming platform for delivering entertainment to the television. The Company’s products include Roku 4, Roku 3, Roku 2, Roku 1, Roku Streaming Stick and accessories, such as cables, remote controls, power adapters and headphones. Its Roku streaming players and the Roku Streaming Stick are sold through retailers in the United States, Canada, the United Kingdom, the Republic of Ireland, Mexico and France. It licenses a reference design and operating system to television manufacturers to create co-branded Roku TV models. Under the Roku Powered program, it licenses its streaming platform to pay television providers who want to use the Internet to deliver entertainment services through streaming players. It sells Roku streaming players in retail, through its licensing arrangements with television original equipment manufacturers and pay television operators.

Live Nation Entertainment Company Profile

Live Nation Entertainment, Inc. is a live entertainment company. The Company’s businesses consist of the promotion of live events, including ticketing, sponsorship and advertising. Its segments include Concerts, Sponsorship & Advertising, Ticketing and Artist Nation. The Concerts segment is engaged in promotion of live music events in its owned or operated venues and in rented third-party venues; operation and management of music venues; production of music festivals, and creation of associated content. The Ticketing segment is an agency business that sells tickets for events on behalf of its clients. The Artist Nation segment provides management services to music artists in exchange for a commission on the earnings of artists. The Sponsorship & Advertising segment employs sales force that creates and maintains relationships with sponsors to allow businesses to reach customers through its concert, venue, artist relationship and ticketing assets, including advertising on its Websites.

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