Billboard Values

Outdoor Valuations September 2016

Public outdoor company valuations shrank slightly during the third quarter of 2016 as this chart demonstrates:

Public Company Outdoor Values September 2016

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  • The average revenue multiple for the four public outdoor companies shrank from 3.74 times to 3.60 times.  JCDecaux, Clear Channel Outdoor and Outfront trade at a lower revenue multiple than Lamar because they rely more on short term transit advertising contracts or international outdoor markets where leases are less secure.  The transit business is mixed blessing.  It is growing faster than the billboard business but relies on short term contracts which get bid up during good times.  You can see this in the fact that Lamar has a cashflow margin of 42% versus an average cashflow margin of 22% for Clear Channel, Outfront and JCDecaux.
  • The average cashflow multiple for the four public outdoor companies shrank from 13.15 times to 13.00 times.  Why is Clear Channel valued so much lower than the other public outdoor companies?  Because Clear Channel Outdoor’s cashflow carries more risk due to much higher debt than the other public outdoor companies.  A dollar of risky cashflow get valued at a lower multiple than a dollar of safe cashflow.
  • Private market values are 8-12 times cashflow or 4-6 times revenue.
  •  Easement values at 6-10 times cashflow.

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