Vivid Seats (NASDAQ:SEAT) remains an attractive takeover target for private equity firms despite the recent rally in its share price, analysts at Citi believe.
Earlier this week, it was reported that Vivid Seats is exploring a sale and working with an advisor to gauge interest from potential buyers.
This sent shares of the company up 20% on Monday at $4.54, marking the stock’s biggest-ever single-day gain and giving it a market capitalization of $943 million.
“Despite the move, we still see scope for SEAT to be acquired at a premium to the prevailing equity value, as our leveraged buyout model suggests the firm remains an attractive private equity takeout candidate with a fairly robust internal rate of return of approximately 27%,” Citi’s analyst wrote in a note to clients.
They reiterated their ‘Buy’ rating on Vivid Seats, which traded hands at $4.60 on Friday morning.
The Stubhub and SeatGeek competitor went public in 2021 via a merger with a special purpose acquisition company, valuing the company at $1.95 billion at that time.
Its shares fell 40% in 2024 due to its declining financial performance, reduced marketplace gross order value, lowered revenue guidance, and negative market sentiment following analyst downgrades.