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On Wednesday, Canaccord Genuity adjusted its financial outlook for Vivid Seats Inc. (NASDAQ: SEAT), reducing the price target on the company’s shares to $5.00 from the previous $6.00 while continuing to endorse a Buy rating. The adjustment follows Vivid Seats’ release of fourth-quarter earnings, which aligned with the company’s forecasted ranges for Marketplace Gross Order Value (GOV), revenue, and adjusted EBITDA. According to InvestingPro data, the stock currently trades at $2.85, significantly below analysts’ consensus target range of $4-$8, suggesting potential upside opportunity. The company maintains a "GOOD" Financial Health score, supported by its robust 74% gross margin.
Despite meeting quarterly guidance, Vivid Seats experienced a year-over-year decline in Marketplace orders, attributed partly to challenging comparisons from the previous year and ongoing industry difficulties. The competitive landscape has seen heightened marketing efforts from rivals. Nonetheless, the company observed positive trends at the start of the year, with concert supply increasing. However, recent weeks have shown a shift to flat or even negative industry volumes, indicating a mixed outlook for 2025, though slightly more optimistic than 2024. InvestingPro analysis reveals the stock has fallen over 18% year-to-date, with two key ProTips indicating both challenges and opportunities. Subscribers can access 8 additional ProTips and a comprehensive Pro Research Report for deeper insights.
For the fiscal year 2025, the company’s guidance for Marketplace GOV is projected to be relatively unchanged compared to the previous year, taking into account potential conservative factors such as competitor marketing expenses and the general economic environment. Vivid Seats anticipates more favorable comparisons in the second half of 2025, which could help drive growth.
The profitability forecast, however, fell short of expectations, suggesting a potential margin compression year-over-year. This is largely due to the company’s increased investments in pricing, marketing, and product capabilities aimed at maintaining its market share. Following the earnings report, SEAT stock has experienced downward pressure. The company’s shares are currently trading at approximately 1x its projected 2025 revenue and 6x its forecasted 2025 adjusted EBITDA. Early indicators of a decrease in competitive intensity or a stabilization in demand, coupled with a potential return to growth later in the year, could significantly improve investor sentiment towards Vivid Seats.
In other recent news, Vivid Seats reported its fourth-quarter 2024 earnings, revealing a slight year-over-year revenue increase of 1% to $200 million, surpassing the forecast of $194.19 million. However, the company’s earnings per share (EPS) missed expectations, coming in at $0.02 against the anticipated $0.03. For the full year, Vivid Seats achieved a 9% revenue growth to $776 million, though it faced challenges with a decline in Marketplace Gross Order Value (GOV) by 11% in the fourth quarter. The company’s adjusted EBITDA for the fourth quarter decreased by 2% to $34.2 million, while full-year adjusted EBITDA rose by 7% to $151.4 million. Analysts from Citi maintained a buy rating despite noting that the 2025 guidance fell short of expectations, while RBC Capital highlighted potential increased spending on performance marketing. Vivid Seats is also focusing on international expansion, with new ventures in Europe and a partnership with United Airlines. These developments reflect the company’s strategic efforts to navigate a competitive market environment.
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