Craig-Hallum launched formal coverage of StubHub Holdings (NYSE: STUB) on Thursday, assigning a Hold rating and establishing a $12 price objective. That target sits below StubHub's then-current market price of $14.27, although InvestingPro data referenced by the research firm indicates a separate Fair Value assessment that may imply the stock is undervalued.
The research note singled out StubHub as the dominant secondary ticket marketplace, with the StubHub brand operating in the United States and viagogo serving international markets. Craig-Hallum highlighted rapid market share gains, which the firm attributes in part to heavy performance marketing investment.
Those share gains are consistent with StubHub's recent top-line trajectory: revenue increased 14.9% over the last twelve months, bringing total revenue to $1.83 billion. Craig-Hallum identified several potential avenues for future revenue and profitability expansion, including the growth of direct issuance, additional advertising revenue, and "more rational" marketing spend designed to support margin improvement.
Despite acknowledging those opportunities, the analyst expressed doubts about the pace and scale of direct issuance growth that many on the Street appear to assume. Craig-Hallum's checks did not corroborate expectations that direct issuance gross merchandise sales (GMS) would climb from roughly $225 million in 2025 to $2 billion in 2026 and exceed $4 billion in 2027. The research firm views that projected acceleration as unlikely based on its industry checks.
InvestingPro data cited in the coverage note further underpins Craig-Hallum's cautious stance: StubHub is not currently profitable, with an EBITDA of negative $1.22 billion. The firm also raised questions about the plausibility of achieving both sizable market share gains and rapid margin expansion at the same time.
Craig-Hallum detailed the expectations it is contesting. Current forecasts examined by the firm imply North American market share gains of roughly 5 percentage points per year, putting StubHub above a 60% share by 2027. At the same time, those forecasts assume EBITDA margin expansion from about 13% in 2025 to roughly 30% in 2026 and 35% in 2027. Craig-Hallum flagged this combination of outcomes - steep share growth paired with aggressive margin improvement - as potentially inconsistent.
The research firm's checks suggest the majority of StubHub's incremental share gains have been driven by performance marketing. That observation implies a possible trade-off between growth and profitability: maintaining heavy marketing to capture share could constrain margin expansion, while stepping back on performance spend might slow market share momentum.
Market sentiment has mirrored some of those doubts. Over the past six months the stock has fallen 32.09%, and it is trading 49% below its 52-week high of $27.89.
Craig-Hallum's initiation also points to operational initiatives StubHub is pursuing. The company announced an app integration with ChatGPT that offers a conversational interface for discovering live events, enabling users to view real-time ticket inventory and pricing within the platform. StubHub has likewise expanded local partnerships across the United States, working with events including Washington D.C.'s "Duel in the District" and Southern California's BeachLife Festival while employing its Direct Issuance technology to provide primary ticket access.
On the international front, StubHub has been named the official ticket partner for the World Sevens Football Championship, managing ticket distribution in North America and enabling global sales via viagogo.
Other sell-side moves have tracked the mixed tenor of the story. Citizens downgraded StubHub from Market Outperform to Market Perform, pointing to expected intensifying competition by 2026 that could pressure market share and increase marketing expenses. Bank of America Securities kept a Neutral rating on the stock, noting potential regulatory headwinds in the U.K., a market that accounts for a meaningful portion of StubHub's international revenue.
Craig-Hallum's Hold initiation and the accompanying $12 price target underscore the tensions facing StubHub: the company is gaining scale in the secondary market and exploring new revenue streams, but the research firm views some of the Street's near-term growth and margin expectations as aggressive relative to industry checks and current profitability metrics.
For further reading: InvestingPro provides additional ProTips and a comprehensive Pro Research Report that the firm says offers more detailed analysis of StubHub's financial profile and growth prospects.