Lamar Advertising Plummets 7.9% as Q2 Guidance Cut Sparks Investor Exodus

Summary
• Lamar Advertising (LAMR) trades at $114.885, down 7.9% from its $124.75 close
• Q2 results show 2.5% revenue growth but revised AFFO guidance narrows to $8.10–$8.20/share
• Options chain surges with 434 contracts traded on the August 15 $110 put

Lamar Advertising’s stock imploded intraday after management revised 2025 guidance downward, citing slower-than-expected revenue growth and acquisition costs. The 7.9% drop—its worst single-day decline in over a year—reflects investor unease over margin pressures and the $199.1M free cash flow contraction. With the stock trading near its 52-week low of $99.84, the move has triggered a cascade of options activity, particularly in the August 15 expiration cycle.

Revised Guidance and Acquisition Costs Undermine Momentum
Lamar’s 7.9% selloff stems from management’s revised 2025 diluted AFFO guidance, which narrowed from $8.13–$8.28 to $8.10–$8.20 per share. While Q2 results showed 2.5% revenue growth and 12.7% net income growth, the company admitted to 'slightly' missing internal expectations. The July 2 Verde Outdoor acquisition, structured as a UPREIT transaction, added $1.18M common units to Lamar LP, diluting ownership and signaling higher capital expenditures. CEO Sean Reilly’s caution about 'not the degree anticipated' in H2 revenue growth further stoked bearish sentiment, particularly as free cash flow fell 2.2% year-over-year to $199.1M.

Advertising Sector Mixed as Outfront Media Slides 5.19%
The broader advertising sector remains volatile, with Outfront Media (OUT) down 5.19% on the day, reflecting shared concerns over digital ad spend shifts. Lamar’s 7.9% drop outpaces the sector’s average, highlighting its vulnerability to margin compression. While Lamar’s Q2 adjusted EBITDA rose 2.5% to $278.4M, the sector’s focus on digital transformation—evidenced by Digitas’ AI-driven pitch wins—casts doubt on traditional billboard growth trajectories. The $114.885 price now trades at a 21.2x dynamic P/E, below its 52-week average of 23.5x, signaling valuation concerns.

Bearish Options Play Amid Elevated Volatility
• 200-day MA: 122.42 (below) • RSI: 49.43 (neutral) • MACD: 0.438 (bullish) • Bollinger Bands: 121.88–127.17

Technical indicators suggest a bearish near-term setup. The stock has broken below its 200-day MA and is trading near the lower Bollinger Band. With RSI hovering near 50, oversold conditions are not yet triggered, but the MACD histogram’s negative divergence (-0.158) hints at waning momentum. The most liquid options are the August 15 $110 put (LAMR20250815P110) and $120 call (LAMR20250815C120).

• LAMR20250815P110: Put option with 32.82% IV, 245.53% leverage ratio, delta -0.156, theta -0.0947, gamma 0.0428, turnover 18,627
- IV: Elevated volatility suggests strong bearish sentiment
- Leverage: 245.53% amplifies downside potential
- Delta: -0.156 indicates moderate sensitivity to price moves
- Theta: -0.0947 shows time decay is accelerating
- Gamma: 0.0428 implies increasing delta as price drops
- Turnover: 18,627 confirms high liquidity
This put option offers a high leverage ratio and elevated IV, ideal for capitalizing on a 5% downside scenario (projected price: $109.14). Payoff would be $0.86 per contract, or $860 for a full position.

• LAMR20250815C120: Call option with 28.01% IV, 256.44% leverage ratio, delta 0.177, theta -0.0605, gamma 0.0543, turnover 7,471
- IV: Mid-range volatility supports directional bets
- Leverage: 256.44% enhances upside potential
- Delta: 0.177 suggests limited sensitivity to price moves
- Theta: -0.0605 indicates moderate time decay
- Gamma: 0.0543 implies delta increases as price rises
- Turnover: 7,471 ensures sufficient liquidity
This call option balances leverage and volatility, suitable for a bullish rebound above $120. Payoff under a 5% upside scenario (projected price: $120.63) would be $0.63 per contract, or $630 for a full position.

Aggressive bears should prioritize the $110 put, while cautious bulls may test the $120 call into a break above $120.00.

Backtest Lamar Advertising Stock Performance
The backtest of LAMR's performance after an intraday plunge of -8% shows favorable short-to-medium-term gains. The 3-Day win rate is 55.83%, the 10-Day win rate is 60.86%, and the 30-Day win rate is 65.89%, indicating a higher probability of positive returns in the immediate aftermath of the plunge. The maximum return during the backtest period was 4.84%, which occurred on day 59, suggesting that there is potential for recovery and even surpassing the pre-plunge levels.

Watch for $114.75 Support Breakdown or Sector Catalysts
Lamar’s 7.9% drop has created a critical juncture near its 52-week low of $99.84. While the stock’s 21.2x P/E suggests undervaluation, the revised guidance and $199.1M free cash flow contraction demand caution. Investors should monitor the $114.75 intraday low for a breakdown, which would validate a bearish trend. Conversely, a rebound above $120.00 could trigger a short-covering rally. Outfront Media’s 5.19% decline underscores sector-wide fragility, but Lamar’s unique acquisition costs and margin pressures make it a high-risk trade. For now, the $110 put and $120 call offer directional exposure to a volatile near-term outlook.