StubHub gains ground after analysts endorsements ease post-IPO jitters

By Rashika Singh

StubHub SSTUB shares rose nearly 6% in early trading on Monday after a raft of upbeat ratings from brokerages lifted investor sentiment in the ticketing platform following a shaky market debut last month.

J.P. Morgan, BofA Global Research and others highlighted the company's leadership in secondary ticketing and its expansion into direct issuance and advertising, as they started coverage after the industry-mandated quiet period ended.

"We believe through its well-established, dominant position in the secondary ticketing market, StubHub will be able to establish a formidable entry into the materially larger primary ticketing market," Evercore ISI analysts said.

At $20, the shares were trading below its IPO price of $23.50 apiece, indicating investors are not fully convinced about StubHub's ability to grow quickly or better compete with bigger players.

Its industry rivals have also struggled in the public market, except Live Nation LYV.

StubHub's stock performance contrasts sharply with recent tech IPOs such as Klarna KLAR and Figma FIG.

"We believe STUB shares, trading at a discount to peers, offer compelling risk/reward as we expect strong execution in core resale and ads, while direct issuance expectations seem muted," J.P. Morgan analysts said.

Analysts at BMO viewed StubHub as "a secondary ticketing market leader and primary ticketing market disruptor", setting a Street high price target of $30.

None of the brokerages that initiated coverage issued a neutral or bearish rating, according to the latest data.

StubHub raised nearly $800 million in its U.S. IPO, with proceeds earmarked for reducing its $2.4 billion debt.

The listing marked StubHub's return to public markets after multiple delays, following its $4.05 billion acquisition by Viagogo in 2020 and earlier ownership under eBay.

Founded in 2000, StubHub operates a ticketing marketplace in more than 200 countries, enabling buyers to purchase tickets for live events, including sports and music performances.

J.P. Morgan and Goldman Sachs led a 14-firm underwriting syndicate for StubHub's IPO.

Following are the brokerages' ratings and PT on the firm: