StubHub Holdings was downgraded to Neutral from Outperform by analysts at Wedbush Securities following weaker-than-expected quarterly results and reduced visibility into growth from the company’s direct ticket issuance business.
StubHub reported second-quarter gross merchandise sales (GMS) of about $2.3 billion, down roughly 8% year over year, missing Wedbush’s estimate of a 1.1% decline and consensus expectations for a 2.8% drop.
Excluding the impact of events tied to Taylor Swift, GMS rose about 6% year over year.
Revenue fell 16% from a year earlier to $449 million, about 7% below expectations, implying a take rate of 19.2% versus the 19.5% analysts had projected.
Adjusted EBITDA totaled $63 million, around $3 million below estimates, with a margin of 13.9% roughly 30 basis points below consensus forecasts.
"Importantly, we have limited conviction and visibility today in the value of the direct issuance business, with management's lofty expectations for the segment unable to materialize as anticipated,” Wedbush analysts wrote.
The firm also cited regulatory risks, particularly the industry’s all-in pricing change, which it said could constrain market growth until mid-2026, and longer-term risks from AI-enabled disintermediation.
StubHub guided for total GMS growth of about 9% in 2026, reaching roughly $10 billion at the midpoint, well below earlier estimates of $12.1 billion. Management also projected adjusted EBITDA of $410 million this year, equal to roughly 4.1% of GMS, far below Wedbush’s prior estimate of $750 million and the Street’s $691 million.
Wedbush said the stock trades at about six times its 2027 adjusted EBITDA estimate and remains discounted compared with peers in the online travel and events sector. Analysts said investors will likely look for stronger growth in the core resale business and adoption of the direct issuance model before regaining confidence.
Following the results, Wedbush cut its forecasts for first-quarter 2026, expecting GMS of $2.2 billion, revenue of $428 million, and adjusted EBITDA of $64 million.
Shares of Stubhub were down 12.6% on Thursday afternoon.