StubHub shares went up on Friday after Citi upgraded the stock. Citi expects that strong app downloads will help increase ticket sales, which could be a positive sign for the company. This comes after higher costs outweighed the boost from World Cup demand.
The stock rose 4.3%, putting more distance between its current price and the 52-week low it hit earlier this week.
Citi expects StubHub’s third-quarter adjusted Ebitda to beat current forecasts, thanks to strong app downloads. This could help StubHub reach the higher end of its $420 million full-year guidance. Based on this outlook, Citi raised its rating on the stock.
Citi estimates that third-quarter downloads increased to 1.4 million from 1.2 million in the previous quarter. They also expect about 800,000 more downloads in the fourth quarter. Despite this growth, Citi lowered its price target for the stock because of possible risks from an MLB lockout.
Wall Street had broadly expected the FIFA World Cup to meaningfully lift StubHub’s business, with Morgan Stanley writing in May that the tournament could serve as a significant tailwind for the secondary ticketing industry. StubHub’s May earnings report did show rising ticket demand at the time.
But in the next quarter, StubHub’s spending grew faster than its results. CEO Erik Baker said the company had record revenue of $573.1 million in August, but it still reported a second-quarter loss of $40,000 for common shareholders as expenses jumped 37%.
StubHub shares are still well below their initial price of $23.50 from the company’s 2025 trading debut.
Citi said StubHub’s recent share weakness is due to investor worries that the company might not meet its adjusted Ebitda guidance. There are also longer-term concerns about how AI could change the ticket resale business.
StubHub is set to announce its third-quarter earnings in November.
