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StubHub Growth Ahead Seen Slower as World Cup Tailwind Fades, BofA Says in Downgrade
StubHub (STUB) is likely to see slower growth in the next few quarters as World Cup-driven tailwinds fade and tougher comparisons await, BofA Securities said Thursday.Late Wednesday, the ticketing marketplace for live events reported that its second-quarter gross merchandise sales, or GMS, surged 34% year over year to a record $3.1 billion."The second quarter demonstrated strong demand for live events, highlighted by a record-setting World Cup," StubHub Chief Executive Eric Baker said in an earnings release. The men's football event was co-hosted by the US, Canada and Mexico from June 11 through July 19.StubHub is likely to see slower growth in the second half of the year "possibly due to a pull forward of demand due to (the World Cup), or changing share dynamics," BofA analyst Justin Post said in a note to clients Thursday.The brokerage downgraded its rating on the company's stock to underperform from neutral and lowered its price objective to $7.50 from $11.StubHub shares were down 13% in afternoon trade.For the full year, the company raised its GMS outlook to between $10.1 billion and $10.3 billion from its prior forecast range of $9.9 billion to $10.1 billion. It left its adjusted earnings before interest, taxes, depreciation, and amortization outlook range unchanged at $400 million to $420 million.The forecast implies pressure on volumes in the second half of the year despite a "constructive" concert guidance for the period from Live Nation (LYV), while 2027 is likely to have tough first-half comparisons, BofA said."Near-term, ticketing sales could rebound from August lows and drive upside, but we also see risk to 2027 (estimates) given (comparison versus) a robust US consumer spending environment in 2026," Post wrote. "Upside drivers could include announcements of tier 1 concert tours in 2027, or strong fan interest in upcoming NFL and NBA seasons."The company is "closely" tracking second-half consumer live entertainment spending trends following a surge in demand driven by the World Cup, Baker said on an earnings conference call late Wednesday, according to a FactSet transcript.Price: $7.39, Change: $-1.16, Percent Change: -13.52%
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