Mizuho initiates StubHub stock with Outperform rating, $24 price target

Mizuho initiated coverage on StubHub Holdings (STUB) with an Outperform rating and a $24 price target, citing the stock's inexpensive valuation at 9x its $980 million adjusted EBITDA estimate for 2026, despite strong gross profit margins and revenue growth. This positive sentiment is widely shared, with Citizens, JPMorgan, BMO Capital, Evercore ISI, and Goldman Sachs also initiating coverage with favorable ratings and price targets ranging from $24 to $46, collectively highlighting StubHub's dominant market position, accelerating market share gains, and potential for future growth driven by a long-term trend favoring experiential spending.

Analysis

StubHub Holdings (STUB) has garnered significant positive attention from multiple financial institutions, with Mizuho initiating coverage with an Outperform rating and a $24.00 price target. The firm views STUB as inexpensive at 9x its $980 million adjusted EBITDA estimate for 2026, contrasting with the current share price of $18.89 which implies a much lower 2026 EBITDA of $500-600 million. The stock has already seen an 11.6% gain over the past week, reflecting initial market enthusiasm.

This bullish sentiment is echoed by Citizens, JPMorgan, BMO Capital, Evercore ISI, and Goldman Sachs, all initiating coverage with Outperform or Buy ratings and price targets ranging from $24.00 to $46.00. Analysts highlight StubHub's impressive 81% gross profit margins, 19% year-over-year revenue growth, dominant market position in North America, accelerating market share gains, and the favorable long-term trend towards experiential spending. These factors collectively underpin the strong growth outlook.

Despite the positive outlook on future earnings, InvestingPro data indicates a relatively high current EV/EBITDA multiple of 56.3x. Mizuho's analysis suggests a substantial upside potential to $45.00 in a bull case scenario, driven by multiple expansion to 16x, but also cautions of a 50% downside risk in a bear case if the direct issuance business underperforms and core operations require further investment, leading to EBITDA contraction and a 10x multiple.

Key Decisions for Investors

• Investors should consider initiating or increasing long positions in STUB, given the strong analyst consensus, robust fundamentals, and significant upside potential indicated by multiple price targets.
• Closely monitor StubHub's progress towards its 2026 adjusted EBITDA targets, as the current valuation disparity hinges on achieving these future projections.
• Evaluate the risks associated with the direct issuance business and potential for multiple contraction, as outlined in Mizuho's bear case, before making investment decisions.