A dramatic change in one analyst’s opinion of StubHub (STUB +1.42%) took the stock well higher in recent trading days. According to data compiled by S&P Global Market Intelligence, StubHub’s shares clocked a gain of over 13% this week.
A fence-sitter becomes a bull
That professional StubHub watcher was Guggenheim’s Curry Baker. On Tuesday, the prognosticator raised his rating on the company’s equity to buy from his previous neutral. His price target is $12.50 per share.
Image source: Getty Images.
Baker’s new bullish outlook stems from several recent developments, according to reports. The first is his opinion that StubHub has “reset” investor expectations not only for the remainder of this year but also for the following twelve months. He also feels the company will do better than many expect in advertising and its direct-issuance primary ticketing business.
On top of that, Baker wrote that high-profile live events coming soon will be a boon for StubHub, not least next year’s soccer World Cup, which will be played across various venues throughout the U.S. The analyst also waxed positive on the regulatory environment, which he believes is becoming more favorable to the company, and its strong cash flow generation.
Today’s Change
(1.42%) $0.14
Current Price
$9.98
Key Data Points
Market Cap
$3.7B
Day’s Range
$9.68 – $10.20
52wk Range
$5.74 – $27.89
Volume
4.1M
Avg Vol
4.9M
Gross Margin
80.79%
Fading experiences?
In addition to these factors, I’d include StubHub’s embrace of next-generation technology to help its business, specifically its recently announced collaboration with leading artificial intelligence (AI) developer Anthropic.
That said, I feel we’re passing the peak of Experience Commerce, where consumers prioritize one-off events like live shows and sports over material objects. If the economy starts to slow, many will jettison these types of purchases, which won’t be good for ticketing companies. I’d stay on the sidelines with StubHub because of this.
Eric Volkman has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
