StubHub Stock Soars After Wall Street Analysts’ Bullish Ratings

StubHub’s stock experienced a significant surge on Monday after a wave of positive ratings from Wall Street analysts. Following its IPO last month, the stock faced a downward trend, but analysts have now initiated coverage, painting a brighter outlook for the online ticketing platform.

Analysts’ Positive Ratings Boost StubHub Stock

At least 12 analysts began covering StubHub shares since late Sunday, with 11 analysts recommending a buy, while one maintained a neutral stance. This wave of ratings came after the traditional quiet period post-IPO ended.

• StubHub stock rose nearly 5% to $19.82 during recent trades.
• The company went public on September 17, 2023, with an initial share price of $23.50.
• StubHub’s shares closed down by 6% on the first trading day.
• Last week, shares were down 20% from the IPO price.

Analysts’ Price Targets and Predictions

Analysts expressed optimism about StubHub’s potential for growth. For example, BofA’s Justin Post assigned a buy rating with a price target of $25, citing the company’s anticipated revenue growth and market share gains. Evercore ISI’s Mark Mahaney also recommended a buy with a target of $29, pointing to a projected 29% revenue growth in 2024.

Wedbush’s Scott Devitt rated StubHub as outperform, setting a target of $25 as well, and emphasized the significant potential for growth in StubHub’s direct ticket issuance segment.

Challenges and Opportunities Ahead

Investors are particularly focused on StubHub’s capacity to expand its direct ticket issuance business, a move that brings challenges, especially against competitors like TicketMaster parent Live Nation. The company recently formed an agreement allowing Major League Baseball teams to sell tickets directly through its platform.

According to Devitt, the direct issuance market represents a $127 billion opportunity, dwarfing the $30 billion secondhand market. However, he cautioned about the risks involved in execution as the company strives to expand this segment.

Company Background

Co-founded by Eric Baker in 2000, StubHub was acquired by eBay in 2007 for $310 million. In 2020, eBay sold StubHub to Viagogo for approximately $4 billion. Under Baker’s leadership, StubHub Holdings continues to evolve.

In its recent IPO filing, StubHub reported a 29.5% revenue increase for 2024, projecting revenues to reach $1.77 billion. The first quarter of the year showed a 10% sales growth to $397.6 million, though the company also reported a net loss of $22.2 million for the quarter.

As StubHub navigates its post-IPO landscape, analysts remain cautiously optimistic about its prospects in the competitive online ticketing market.