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Investing.com - BofA Securities downgraded StubHub Holdings (NYSE:STUB) from Buy to Neutral on Friday, while lowering its price target to $19.00 from $25.00. The new target aligns closely with InvestingPro’s Fair Value assessment, which suggests the stock is currently slightly undervalued at its current price of $18.82.
StubHub reported third-quarter revenue of $468 million and EBITDA of $67 million, exceeding Street expectations of $451 million and $58 million respectively. The company’s gross merchandise sales (GMS) grew 11% year-over-year to $2.44 billion, surpassing analyst estimates of $2.36 billion. This performance continues StubHub’s impressive 18.6% revenue growth over the last twelve months, with the company maintaining exceptional gross profit margins of 80.8%.
The ticket marketplace’s GMS growth would have reached 24% when excluding Taylor Swift concert comparisons from the previous year, according to BofA Securities.
StubHub’s market share gains were substantial, with the firm noting competitor Vivid Seats experienced a 29% year-over-year decline in gross order volume during the same quarter.
BofA Securities attributed StubHub’s strong performance to "ongoing investments in performance marketing channels and competitive take rates," despite the downgrade to Neutral.
In other recent news, StubHub Holdings reported its third-quarter earnings, showing an 8% increase in revenue to $468 million and a 21% rise in adjusted EBITDA to $67 million. These results surpassed both Guggenheim’s expectations of $457 million in revenue and $57 million in adjusted EBITDA, as well as consensus estimates of $452 million and $58 million, respectively. Despite these positive financial indicators, several analyst firms lowered their price targets for StubHub. Guggenheim adjusted its target to $16, maintaining a Neutral rating, while BMO Capital reduced its target to $22 but kept an Outperform rating. Goldman Sachs also lowered its price target slightly to $45, maintaining a Buy rating, citing a robust demand environment for live events. Evercore ISI set a new target of $27, noting mixed third-quarter results with gross merchandise sales of $2.4 billion, an 11% year-over-year increase. These developments reflect a cautious yet optimistic outlook from analysts following StubHub’s first earnings report as a public company.
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