Boost in Lamar (LAMR) Stock Value: Q1 AFFO Surpasses Expectations as Revenues Soar Year-over-Year

• Lamar Advertising Company (LAMR) shares gained 1% after reporting first-quarter 2024 adjusted funds from operations (AFFO) per share of $1.54, surpassing the Zacks Consensus Estimate of $1.52.
• Despite higher interest expenses, the company’s quarterly net revenues of $498.2 million increased 5.7% year-over-year, beating the consensus mark of $488.8 million.
• CEO Sean Reilly expressed optimism about the company’s performance, citing strong local sales and a return to same-store growth in digital.

Lamar Advertising Company (LAMR) outperforms market expectations in Q1 2024, with strong local sales and digital growth driving higher revenues and AFFO per share.

Impressive Q1 2024 Performance

Lamar Advertising Company reported an impressive first quarter in 2024, with adjusted funds from operations (AFFO) per share of $1.54, beating the Zacks Consensus Estimate of $1.52. This figure also compared favorably with the prior-year quarter’s tally of $1.41. Despite higher interest expenses, the company’s quarterly net revenues of $498.2 million marked a 5.7% increase on a year-over-year basis, surpassing the consensus mark of $488.8 million.

Strong Local Sales and Digital Growth

According to the company’s chief executive, Sean Reilly, the first-quarter results exceeded internal expectations, driven by strong local sales and a return to same-store growth in digital. The company is optimistic about the rest of 2024 and has raised its guidance for full-year diluted AFFO to a range of $7.75 to $7.90 per share.

Financial Highlights

Operating income of $124.6 million climbed 4.9% from the year-ago period’s $118.8 million, while the adjusted EBITDA increased 7.1% to $211.9 million. Acquisition-adjusted net revenues for the first quarter climbed 5.3% year over year. Also, acquisition-adjusted EBITDA rose 6.5%. However, interest expenses increased 7.3% year over year to $44.5 million during the reported quarter. The company’s free cash flow of $138.7 million marked a 22.4% year-over-year increase in the quarter.

Balance Sheet and Liquidity

As of Mar 31, 2024, Lamar Advertising had a total liquidity of $634.8 million, comprising $598.4 million available for borrowing under its revolving senior credit facility and $36.4 million in cash and cash equivalents. The outstanding balance under the company’s revolving credit facility totaled $143 million and $235.7 million under the Accounts Receivable Securitization Program.

Conclusion

Lamar Advertising Company’s strong Q1 2024 performance, driven by robust local sales and digital growth, positions it well for the rest of the year. Despite higher interest expenses, the company managed to increase its net revenues and AFFO per share, outperforming market expectations. With a healthy balance sheet and liquidity position, Lamar is well-positioned to navigate future challenges and capitalize on growth opportunities.