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On Thursday, Morgan Stanley (NYSE:MS) adjusted its outlook on Vivid Seats Inc. (NASDAQ:SEAT), lowering the price target to $3.75 from the previous $4.60, yet maintaining an Equalweight rating on the company’s shares. The change reflects the firm’s analysis of the competitive landscape and growth projections for the secondary ticketing market. According to InvestingPro data, the stock is currently trading at $2.90, having declined nearly 29% in the past week, with analyst targets ranging from $3.50 to $8.00.
The firm’s analyst pointed out that despite a generally healthy industry environment, Vivid Seats is experiencing challenged growth, which underscores the intense competition within the secondary ticketing sector. While the company maintains a robust gross profit margin of 74% and an overall GOOD financial health score according to InvestingPro, the company’s initial outlook for 2025 indicates a broad range of potential outcomes, which includes considerations for consumer risk. However, there is an anticipation that growth will resume in the second half of 2025.
Vivid Seats, which operates in the market for reselling tickets for events such as concerts, sports, and theater shows, has to navigate through a sector where multiple players are vying for market share. The industry itself is known for fluctuations based on various factors including economic conditions, consumer spending habits, and the popularity of events.
The analyst’s comments highlight the cautious stance that Morgan Stanley is taking with regards to Vivid Seats’ near-term prospects. While the firm sees potential for growth in the latter part of 2025, the current assessment suggests that investors should have tempered expectations for the company’s performance in the immediate future.
Investors and stakeholders in Vivid Seats are thus provided with a revised financial metric to consider as they monitor the company’s progress and position within the competitive landscape of the secondary ticketing industry. The updated price target of $3.75 serves as a new reference point for evaluating the company’s stock value moving forward.
In other recent news, Vivid Seats Inc. reported its fourth-quarter 2024 earnings, revealing a 1% increase in revenue to $200 million, which slightly exceeded expectations. However, the earnings per share fell short, coming in at $0.02 against a forecast of $0.03. The company also experienced a significant 87% drop in net income for the full year, with a decline in Marketplace Gross Order Value (GOV) to $3.89 billion from $3.92 billion in 2023. Despite the financial challenges, Vivid Seats is planning for international expansion and has announced a new partnership with United Airlines.
Analyst firms have responded to these developments with mixed actions. Raymond (NSE:RYMD) James downgraded Vivid Seats from Outperform to Market Perform, citing the company’s cautious 2025 guidance and increased competition in the ticketing industry. Canaccord Genuity maintained a Buy rating but reduced its price target to $5.00, acknowledging the competitive pressures and mixed industry volumes. Citi also maintained a buy rating, though it noted that the 2025 guidance fell short of expectations.
Vivid Seats anticipates a challenging first half of 2025 but expects a potential return to growth in the latter half of the year. The company projects 2025 Marketplace GOV to range between $3.7 billion and $4.1 billion, with revenues expected between $730 million and $810 million. As the company navigates these challenges, it remains focused on strategic investments in marketing and technology to bolster its market position.
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