StubHub (NYSE:STUB) shares plummeted more than 23% pre-market after the company missed Wall Street expectations for the third quarter and declined to issue fourth quarter guidance, overshadowing a solid revenue beat for the period.
The ticketing marketplace reported Q3 revenue of $468.1 million, ahead of analysts’ estimates of $452 million and up 8% from $433.8 million a year earlier.
However, adjusted earnings per share came in at a loss per share of $4.27, far wider than the expected loss per share of $2.91. The results were impacted by a one-time, non-cash $1.4 billion stock-based compensation charge tied to the company’s recent IPO.
StubHub posted a net loss of $1.33 billion, reflecting the impact of the IPO-related expense.
Adjusted EBITDA rose 21% year over year to $67 million, while Gross Merchandise Sales (GMS) increased 11% to $2.43 billion. Removing the prior year’s boost from the Taylor Swift Eras Tour, GMS growth accelerated to 24%.
The company said it used roughly $750 million of its IPO proceeds to reduce debt, improving leverage following its September listing on the New York Stock Exchange.
In addition, StubHub did not provide guidance for the fourth quarter. CEO Eric Baker told investors the company is focused on long-term execution and that the timing of major ticket onsales can vary widely, making short-term forecasting unreliable. The company plans to issue its 2026 outlook alongside full-year results early next year.
Following the report, Wedbush lowered its price target on StubHub to $22 while maintaining an ‘Outperform’ rating, noting its solid Q3 execution but growing uncertainty ahead.
The firm said results were “healthy” in the company’s first quarter as a public entity, noting GMS growth of 11.2% year-over-year exceeded both its estimate and consensus, and revenue and adjusted EBITDA also came in ahead of expectations.
However, Wedbush wrote that the absence of forward guidance is likely to pressure the stock as investors grapple with reduced near-term visibility.
The firm highlighted several factors that could weigh on upcoming results, including a pull-forward of ticket sales into September, a contraction in market size tied to all-in pricing changes, tougher comparisons linked to last year’s World Series and the fading benefit of the Taylor Swift tour, and continued marketing investments.
“Focus has shifted towards management’s ability to execute and deliver a re-acceleration of growth in the coming periods,” the analysts wrote. “It may take multiple quarters for investors to regain comfort without greater transparency from the company or tangible evidence of an inflection in the business. As a result, our conviction in our intermediate-term forecast has eased.”
Wedbush said StubHub trades at a discount to its peers given near-term execution risk, and reduced its estimates to reflect heightened uncertainty. The analysts now expect fourth-quarter GMV of $2.5 billion, revenue of $497 million, and adjusted EBITDA of $62 million.