StubHub Had a Disappointing IPO. Buy the Stock, Wall Street Says.

The ticket reseller notched a series of Buy ratings from analysts working for the company’s underwriters. (Dreamstime)

Key Points

• StubHub’s stock fell over 6% on its IPO day and was down 14% from its $23.50 IPO price to $18.89 by Friday’s close.
• Analysts from Mizuho, J.P. Morgan, and Evercore ISI initiated coverage with ‘Buy’ or ‘Outperform’ ratings and price targets up to $29.
• Mizuho projects StubHub’s global resale revenue will grow 26% in 2026 and direct sales to reach $1.9 billion in 2026.

Interest in StubHub stock hasn’t been quite as electric as the demand for its sports and concert tickets, but Wall Street is feeling upbeat nonetheless.

Twenty-five days have passed since the ticket reseller’s initial public offering, which means analysts at the company’s underwriters are now free to cover the stock. The near-unanimous verdict: Buy the first-month dip.

StubHub sold 34 million shares at $23.50 apiece in the IPO, but the stock stumbled more than 6% in its first day of trading. The stock was down 14% from the IPO price to $18.89 at Friday’s close. At that level, “shares look inexpensive,” wrote Lloyd Walmsley of Mizuho Securities.

Mizuho issued an Outperform rating and a $24 price target for StubHub stock. Positive factors it cited include the company’s strong ticket-resale business and its emerging marketplace for newly issued tickets.

StubHub took a hit last year, Mizuho noted, as the Federal Trade Commission cracked down on hidden fees and required so-called all-in pricing. But the effects of those rules on sales and earnings also mean easier numbers to beat for the next few quarters. The firm projected StubHub’s global resale revenue to grow 26% in 2026.

Meanwhile, StubHub is in the very early innings of its primary ticket sales, or “direct issuance,” business. Mizuho forecasts direct sales will hit $1.9 billion in 2026, up nearly eightfold from $250 million in 2025.

“We like the company’s category leading position in resale ticketing space and expect the [direct issuance] development to help accelerate top-line growth with steady margin improvement down the road,” Walmsley wrote.

Analysts at J.P. Morgan, one of the lead underwriters for the IPO, were similarly optimistic. StubHub’s share of the ticket resale market is set to grow past 50% in fiscal 2026, J.P. Morgan said. Direct-issuance deals with partners such as Major League Baseball add to the momentum.

Potential regulatory hurdles such as caps on resale prices or measures to stop bots—automated nonhuman users that can rapidly snap up tickets to resell—remain a risk, the bank said. “However, STUB’s scale, brand strength, and tech-driven platform position it to navigate regulatory changes and defend share,” wrote analyst Doug Anmuth.

J.P. Morgan rated the stock Overweight with a $24 price target.

On the high end of the estimates released over the weekend, Evercore ISI initiated coverage with an Outperform rating and a $29 price target. Given StubHub’s dominance in the secondary ticket market, its direct- issuance business will be the main debate among investors, the firm wrote.

Evercore said its contacts in the ticketing industry were skeptical about StubHub’s aggressive one-to-two-year timeline for building the direct- issuance business. For now, Live Nation Entertainment’s Ticketmaster remains the entrenched leader in primary ticketing. But these experts also “broadly agreed” that StubHub can successfully expand into the $150 billion direct-issuance market, Evercore said.

Make no mistake. An overwhelming vote of confidence from analysts is never a bad thing. StubHub was up 4% to $19.65 on Monday as investors absorbed the series of research notes.

But the optimism comes with a couple of caveats. First, while analysts must provide their own independent judgments, firms associated with IPO underwriters rarely issue downright bearish opinions so soon after a deal. Second, given StubHub’s tumbling share price, Wall Street’s call is as much a valuation play as an endorsement of the company’s potential.

For instance, StubHub trades at nine times its expected 2026 earnings before interest, taxes, depreciation, and amortization, which is a 35% discount to its peers, analysts at Oppenheimer calculated. That is despite earnings growth double that of its peers, they said.

Oppenheimer issued an Outperform rating with a target of $23 for the price. That is notably below StubHub’s offering price, but still implies a tidy gain for investors buying in today.

Write to Nate Wolf at nate.wolf@barrons.com