Lamar Advertising (LAMR): Evaluating Valuation After $1.1 Billion Balance Sheet Refinancing

Lamar Advertising (LAMR) just announced the completion of $1.1 billion in refinancing transactions, a move that is likely to catch the attention of anyone weighing their next step with the stock. The company shored up its balance sheet by selling $400 million in Senior Notes and locking in a new $700 million Term Loan B. Both actions could boost its liquidity and reduce risk from shifting interest rates. For investors, these steps are not just about numbers, but about confidence. Increasing access to cash means more leeway for growth and stability through whatever the next economic cycle brings. So how has this played out in the bigger picture? While short-term price movement has been a mixed bag, slipping slightly over the past month before recovering some ground, Lamar Advertising’s longer-term story remains impressive. The stock is up over 71% in the last three years and more than doubled over five, pointing to solid momentum even as its performance over the last year has dipped. Coupled with steady annual revenue and net income growth, the company’s refinancing now sets the stage for further strategic moves. With all of that in mind, the real question is whether this influx of liquidity is the opening for value-seeking investors or if the market has already priced in Lamar’s next leg of growth.

Most Popular Narrative: 6.6% Undervalued

According to the most widely followed narrative, Lamar Advertising is trading below its calculated fair value, suggesting untapped upside potential in the current share price. Analysts use a specific discount rate and a mix of assumptions to support this position.

Accelerating expansion of Lamar's digital billboard portfolio, evidenced by the addition of 325-350 new digital units expected this year and a strengthening second-half outlook, positions the company to capitalize on rising demand for dynamic, high-impact ad solutions and supports both revenue growth and net margin expansion through premium inventory and dynamic pricing.

Curious what’s fueling this valuation call? The secret lies in ambitious projections: future cash flows, profit margins, and a dramatic shift in the company’s growth approach. Want to unravel the exact financial leap analysts are betting on for Lamar Advertising’s next chapter? Don’t miss the numbers and logic powering this upside case.

Result: Fair Value of $130.20 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, softer company guidance and contract renewal risks may threaten the pace of growth projected in Lamar’s upbeat valuation case.

Find out about the key risks to this Lamar Advertising narrative.

Another Perspective: Our DCF Model Points to Further Upside

Taking a different approach, the SWS DCF model also suggests Lamar Advertising is trading at a discount to its estimated worth. This adds another layer to the valuation story presented by analysts. Could the true upside be even greater than many expect?

Look into how the SWS DCF model arrives at its fair value.

Simply Wall St performs a discounted cash flow (DCF) on every stock in the world every day (check out Lamar Advertising for example). We show the entire calculation in full. You can track the result in your watchlist or portfolio and be alerted when this changes, or use our stock screener to discover undervalued stocks based on their cash flows. If you save a screener we even alert you when new companies match - so you never miss a potential opportunity.

Build Your Own Lamar Advertising Narrative

If you see things differently or want to dig deeper into the numbers yourself, you can shape your own take in just a few minutes by using Do it your way.

A great starting point for your Lamar Advertising research is our analysis highlighting 3 key rewards and 4 important warning signs that could impact your investment decision.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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