Lamar Advertising Company Class A Common Stock (LAMR)

FairStock Score: 67/100 — STEADY

Key Financials

Strengths

• Generates $538 million in annual free cash flow (4.0% yield on market cap)
• High return on equity of 57.2% demonstrating efficient capital deployment
• Attractive 4.8% dividend yield providing steady income returns

Concerns

• Trades significantly above Graham Number ($36) with negative 272% margin of safety—limited downside protection
• High leverage at 4.80x debt-to-equity increases financial risk and interest expense burden
• Anemic revenue growth of 2.8% for a company of this size limits long-term upside
• Altman Z-Score of 1.3 places it in the financial distress zone—elevated bankruptcy risk

AI Analysis

Lamar Advertising Company Class A Common Stock is a mid-cap real estate company valued at $13.6 billion. The business generates $2.3 billion in annual revenue with a 6.7% net margin and $538 million in free cash flow. From a quality standpoint, Lamar shows distressed Altman Z-Score of 1.3 warrants caution and extraordinary 57% return on equity. On valuation, the stock is reasonably priced at 23.1x earnings, with trades far above its Graham Number ($36) with no margin of safety. Growth dynamics show revenue growing at 2.8% and profit growth of 12801.3%. The 4.8% dividend yield adds an income component for patient holders. Our composite FairStock Score of 67/100 reflects above-average fundamentals overall. Investors should weigh the business quality against the current price and their own margin of safety requirements.

Bull Case

Improving fundamentals and sector tailwinds could drive meaningful earnings growth, compressing the effective multiple for patient investors. With $538 million in annual free cash flow (4.0% yield), management has ample capital for buybacks, dividends, or accretive acquisitions.

Bear Case

Elevated leverage at 4.8x D/E means rising interest rates or revenue weakness could strain debt covenants and force asset sales at distressed prices. Sluggish 3% growth in a large-cap company leaves the stock vulnerable to de-rating if the market rotates toward higher-growth opportunities.

Data from SEC filings. AI analysis is for educational purposes only — not investment advice. Scoring methodology · Disclaimer