| Valuation method | Value, $ | Upside, % |
|---|---|---|
| Artificial intelligence (AI) | 83.84 | -34 |
| Intrinsic value (DCF) | 2.25 | -98 |
| Graham-Dodd Method | n/a | |
| Graham Formula | 44.34 | -65 |
Lamar Advertising Company (Nasdaq: LAMR) is a leading real estate investment trust (REIT) specializing in outdoor advertising, with a rich history dating back to 1902. As one of the largest out-of-home (OOH) advertising providers in North America, Lamar operates over 352,000 displays, including traditional billboards, digital billboards, transit ads, and airport advertising. The company serves a diverse clientele, from local businesses to national brands, leveraging its expansive network to deliver high-impact visibility. Lamar is particularly distinguished by its leadership in digital billboards, boasting the largest network in the U.S. with approximately 3,800 digital displays. Operating in the REIT - Specialty sector, Lamar benefits from stable cash flows driven by long-term advertising contracts, making it a key player in the evolving OOH advertising landscape. With a strong presence across the U.S. and Canada, Lamar continues to capitalize on the growing demand for digital and programmatic OOH advertising solutions.
Lamar Advertising presents a compelling investment case due to its dominant position in the outdoor advertising market, supported by a diversified portfolio of traditional and digital billboards. The company's transition toward digital displays enhances revenue potential through dynamic pricing and higher occupancy rates. Financially, Lamar demonstrates stability with steady revenue growth ($2.2B in FY 2023) and solid operating cash flow ($873.6M). However, investors should consider risks such as high leverage (total debt of $4.56B) and exposure to economic cycles, as advertising spend is often discretionary. The REIT structure provides tax advantages and a reliable dividend (current yield ~5.9%), appealing to income-focused investors. Lamar's beta of 1.41 indicates higher volatility relative to the market, warranting caution for risk-averse portfolios.
Lamar Advertising holds a competitive edge through its extensive geographic footprint and industry-leading digital billboard network. Its scale allows for cost efficiencies in maintenance and ad sales, while its focus on digital transformation positions it well for programmatic ad buying trends. Unlike pure-play digital ad firms, Lamar’s hybrid model (traditional + digital) provides resilience against tech disruption. However, competition is intensifying as rivals like Outfront Media and Clear Channel Outdoor expand their digital offerings. Lamar’s REIT status differentiates it by offering tax-efficient returns, but its high debt load (leverage ratio ~2.1x EBITDA) could limit flexibility compared to privately held competitors. The company’s local-market expertise and long-standing client relationships are key strengths, though its reliance on cyclical ad spending exposes it to macroeconomic downturns. Strategic acquisitions (e.g., buying local billboard operators) further consolidate its market share.