STUBHUB HOLDINGS, INC. (STUB): what the price requires
At today's price, STUBHUB HOLDINGS, INC. (STUB) is priced for +11.4% growth. boothcheck doesn't publish a fair value or a price target; it shows what the price assumes, so you can judge whether that bar is too high.
Generated: 2026-07-14 · Exported: 2026-07-17 · Source: https://boothcheck.com/report/STUB
Headline
| Field | Value |
|---|---|
| Ticker | STUB |
| Company | STUBHUB HOLDINGS, INC. |
| Sector / Industry | Communication Services |
| Current price | $10.39/sh |
What The Price Requires (Inversion)
The assumption today's price embeds, recovered by inverting the valuation.
| Field | Value |
|---|---|
| Inversion basis | revenue-multiple |
| EV / sales paid | 2.2x |
| Steady-state operating margin assumed | 18.5% |
| Implied growth | 11.4% |
The company earns no operating profit yet; the inversion runs on the revenue multiple and an assumed steady-state margin.
Solve inputs: computed at a 11.2% cost of capital with 4% terminal growth over a 5-year stage, holding a 18.5% terminal operating margin (the 75th percentile of its own demonstrated operating margins); each 1pp of cost of capital moves the implied revenue growth ~5.6pp.
Reconcile: at the x-ray's 9.3% required return this reads ~0.9%/yr; the models below use their own rates.
How unusual the bet is: within-range (limited comparison data)
| Reference | Value |
|---|---|
| sustained it ~5 years at this level | 52% |
| implied end-window share | 0% |
Valuation X-Ray
The price is supported by earnings-power value, while asset-based/relative-multiple land below the price. A value/asset-supported name, not a pure growth bet.
How the valuation models price the stock relative to the market price. Price/FV above 1.0 means the market pays more than that lens defends (expensive); at or below 1.0 the lens can defend the price.
| Family | Median price/FV | Models | Reads |
|---|---|---|---|
| Asset | 2.79x | 3 | expensive |
| Earnings | 0.56x | 1 | justifies |
| Relative | 2.15x | 1 | expensive |
| Growth | — | 0 | — |
Families that justify the price: Earnings Families that call it expensive: Asset, Relative
The models below discount at their own flat-beta convention rates (cost of equity 9.3%, WACC 7.0%); the inversion above states its own rate.
Per-Model Detail (n=5)
| Model | Family | FV | Price/FV | Applicable | Methodology |
|---|---|---|---|---|---|
| DCF Perpetual Growth | Growth | $72.88 | 0.14x | no | FCF base $0.7B, growth 10% (input: historical growth), terminal g 4.0%, WACC 7.0%, 6yr projection |
| DCF Exit Multiple | Growth | $0.00 | — | no | Negative/zero FCF or EBITDA — equity value floored at $0 |
| Relative Valuation | Relative | $4.83 | 2.15x | yes | P/S fallback (negative EPS): Sector P/S 2.0x × TTM revenue — excluded from consensus |
| Simple DDM | Growth | — | — | no | — |
| Two-Stage DDM | Growth | — | — | no | — |
| Simple Excess Return | Asset | $4.13 | 2.51x | yes | Reference only (book value floor): BV/sh $4.13, ROE negative |
| Two-Stage Excess Return | Asset | $3.72 | 2.79x | yes | Reference only (book value with convergence): BV/sh $4.13, ROE converges to ke |
| Discounted Future Market Cap | Growth | $9.14 | 1.14x | no | Rev $0.9B, growth 10% (input: historical growth; tapered), Terminal P/S: 3.6x / 4.3x / 5.0x (bear / base = today's held flat / bull, cap 8x) |
| Peter Lynch Fair Value | Relative | $0.00 | — | no | Negative/zero EPS — earnings-based value floored at $0 |
| Margin Trajectory | Growth | — | — | no | — |
| Earnings Power Value | Earnings | $0.86 | 12.08x | no | Normalized EBIT (latest-period EBIT; under 3y history) $0.03B × (1−21%) / WACC 7.0% → EPV (no growth) |
| Residual Income | Asset | — | — | no | — |
| Graham Number | Asset | — | — | no | — |
| EV/EBITDA Relative | Relative | — | — | no | — |
| FCF Yield | Earnings | $18.58 | 0.56x | yes | FCF $647.2M / Kₑ 9.3% — zero-growth perpetuity |
| SBC-Adj FCF Yield | Earnings | — | — | no | — |
| Ben Graham Formula | Earnings | — | — | no | — |
| ROIC-Justified P/B | Asset | $0.79 | 13.15x | yes | BV $4.13 × (ROIC 1.3% / WACC 7.0%) |
| P/Sales Sector | Relative | $4.83 | 2.15x | no | Revenue $0.91B × sector P/S 2.0x |
| PEG Fair Value | Relative | — | — | no | — |
| Earnings Yield | Earnings | — | — | no | — |
| Funds From Operations Multiple | Relative | — | — | no | — |
| Clinical Phase NPV | Growth | — | — | no | — |
| Merton | Asset | — | — | no | — |
| V5 Mechanical | — | — | — | no | — |
Solvency
| Field | Value |
|---|---|
| Net cash | $30.0m |
| Interest coverage | -9.1x |
| Burning cash | no |
Operating profit is negative or near zero and the company has no demonstrated through-cycle (mid-cycle) operating margin to normalize against, so years-to-repay cannot be computed honestly.
Bullet Takeaways
- StubHub is a two-sided ticket marketplace whose GAAP statements currently hide the business: the 10-K shows the company "recognized $1,400.7 million" of stock-based compensation upon its IPO, swamping an operation that generated about $647 million of trailing free cash flow against a $4.2 billion market cap.
- The defining risk is moat erosion at the supply end, with the filing conceding competitors "may include more favorable terms or pricing or exclusivity with certain venues or events", which is how primary ticketing giants and direct issuance could shrink the resale pool StubHub lives on.
- The 2026 World Cup, running through the July 19 final in East Rutherford, is the largest resale event on the calendar and lands in the current quarter; full-year guidance of $9.9 to $10.1 billion in gross merchandise sales and $400 to $420 million of adjusted EBITDA was reaffirmed with the first-quarter beat.
Bull Case
Marketplace businesses are chronically misread in their first year as public companies, because the accounting noise of going public buries the take-rate economics that actually run them. StubHub is the current exhibit: the IPO triggered recognition of $1.4 billion of stock-based compensation, driving trailing GAAP operating results deeply negative, while the underlying machine kept converting roughly 20 percent of each ticket transaction into revenue and generated about $647 million of trailing free cash flow. Against a $4.2 billion market cap, that is a free-cash-flow yield north of 15 percent, and the cash-flow lens reads today's $11.09 as sitting about 40 percent below what a zero-growth perpetuity on that cash stream would support. Cheapness like that on a scaled consumer-internet asset usually signals either a broken business or a misread one.
The first quarter argued for misread. Revenue rose 12 percent year over year to $446 million, beating expectations of about $425 million; gross merchandise sales rose 7 percent to $2.2 billion; the company swung to net income of $48 million from a $22.2 million loss a year earlier; and adjusted EBITDA climbed to $72.1 million with margins expanding more than 400 basis points to 16 percent. Management reaffirmed full-year guidance of $9.9 to $10.1 billion of gross merchandise sales and $400 to $420 million of adjusted EBITDA, and the back half carries the single largest resale catalyst in the company's history: a 104-match World Cup on home soil, culminating July 19 in East Rutherford, for which StubHub is actively selling inventory under its FanProtect guarantee.
The strategic case is the flywheel the filing describes: by aggregating "buyers and sellers at scale, we unlocked a powerful flywheel effect and created an efficient monetization engine for sellers with a broad selection of tickets for fans". Liquidity begets inventory begets buyers, and the company is extending the model up the funnel into direct issuance, selling primary tickets on the same rails, while adding "inventory management and pricing intelligence" tools that deepen seller lock-in. The balance sheet keeps the bet self-funded: $1.53 billion of liquid assets slightly exceeds the $1.50 billion of gross debt, so a business generating over half a billion dollars of annual free cash can fund its growth, service its term loan, and still deleverage. At 2.4x revenue for a marketplace guided to grow double digits, the market is pricing StubHub like a mature media asset while it is executing like a growth one.
Bear Case
StubHub's moat is liquidity in other people's inventory, and the owners of that inventory are working to route around it. The 10-K names the mechanism plainly: the business faces "significant competition from other international, national, regional and local original issuance and secondary ticketing service providers", some of whom compete with "more favorable terms or pricing or exclusivity with certain venues or events". Exclusivity is the operative word. Primary ticketing platforms that control venue relationships can bolt resale onto the original sale, keep the ticket inside their walled garden, and starve independent marketplaces of supply. StubHub's own push into direct issuance is a tacit admission that pure resale is a shrinking perimeter, and the filing flags the risk that if direct issuance adoption cannot be expanded "in a cost-effective manner, our growth prospects would be adversely affected". A marketplace fighting for supply it does not control, against competitors who do, is a moat eroding at the source.
The financial history counsels similar caution. The company reached its September 2025 IPO with an accumulated deficit of $3,410.6 million, and the stock has been cut roughly in half from its $23.50 offer price in under a year. The filing itself warns that "recent rapid growth may not be sustainable or indicative of future growth" and that operating expenses will keep rising, including continued stock-based compensation, which is a real, recurring transfer to employees even when adjusted metrics look past it. Growth also flatters to deceive in 2026 specifically: the World Cup pulls demand into a single summer, so the comparisons in 2027 inherit a hole the size of the tournament.
What the price asks is modest but not trivial: at about 2.4x revenue, it implies the business eventually earns operating margins around 18.5 percent, the top quartile of what it has itself demonstrated, while growing revenue roughly 13.4 percent a year for several years. About 47 percent of comparable fast-growers sustained that pace for five years, so this is nearly a coin flip on execution, before layering on fee-transparency regulation that compresses take rates, a $1.5 billion term-loan stack that consumes cash at meaningful rates, and a supply base that the primary platforms would prefer to repossess. The bear case is not that StubHub collapses; it is that take-rate pressure and supply leakage grind growth toward the single digits, at which point 2.4x revenue for a marketplace with a 16 percent adjusted EBITDA margin stops looking cheap and starts looking fair.
Valuation
Two measurement bases have to be separated before this price makes sense. On the EDGAR trailing basis, operating income is a $1.3 billion loss, but that figure is dominated by the $1.4 billion of stock-based compensation the 10-K says the company recognized upon its IPO; on the underlying operating basis the engine prices, trailing operating income was positive at roughly $0.3 billion. Because trailing profit sits below the steady-state level the price assumes, the price is read against sales: at about 2.4x revenue, today's $11.09 (July 10, 2026) implies StubHub eventually earns an operating margin near 18.5 percent (the 75th percentile of its own demonstrated range) while growing revenue about 13.4 percent annually for the next several years. Roughly 47 percent of comparable fast-growers sustained that combination for five years, which is why the priced-in assumption reads as within range rather than stretched.
The methods that can see through the accounting split from the ones that cannot. The cash-flow lens is the outlier in the stock's favor: trailing free cash flow of about $647 million capitalized with no growth at all lands well above the price, reading the market as paying roughly 60 cents on the dollar for the existing cash stream. The sales-multiple and book-value frames read the price as 2 to 3 times their central estimates, but both have known blind spots here: book equity is thin at $4.13 per share for an asset-light marketplace, and the sector sales multiple treats every revenue dollar as average when StubHub's converts to cash at an unusually high rate. The honest synthesis is that this is a cash-flow-supported price with a growth assumption layered on, not a speculative multiple.
Solvency is closer to neutral than the marketplace label suggests. Liquid assets of $1.53 billion sit just above gross debt of $1.50 billion, a legacy term-loan structure (the filing details Euro and USD Term Loan B facilities with effective rates around 7.29 percent before the 2024 refinancing), so the enterprise carries essentially no net debt but does carry a real interest bill against GAAP earnings that are still IPO-charge-depressed. The concrete what-has-to-be-true: revenue keeps compounding low-double-digits, the adjusted EBITDA margin keeps walking toward the high teens as guided (Q1 delivered 16 percent, up 400 basis points), and stock-based compensation normalizes so GAAP catches up with cash. The first of those gets its stress test this quarter, with the World Cup running through July 19.
Catalysts
The 2026 World Cup is the quarter's defining event: 104 matches across North America ending with the July 19 final in East Rutherford, with StubHub selling resale inventory across the tournament under its FanProtect guarantee. Tournament volume lands in second and third quarter gross merchandise sales, and the second-quarter report (expected in August on the company's cadence) will show whether the surge is tracking toward the reaffirmed full-year guidance of $9.9 to $10.1 billion in GMS and $400 to $420 million of adjusted EBITDA.
The first quarter set the trajectory to beat: revenue of $446 million (up 12 percent, ahead of the roughly $425 million consensus), GMS of $2.2 billion (up 7 percent), a swing to $48 million of net income from a year-ago loss, and adjusted EBITDA of $72.1 million at a 16 percent margin, up more than 400 basis points. The margin walk is the number to keep re-checking, since full-year guidance embeds continued expansion into the seasonally heavy second half.
Strategic threads worth tracking into year-end: the pace of direct issuance adoption (the company's expansion from resale into primary ticketing, which the 10-K flags as both the growth vector and a cost risk), any venue or league exclusivity announcements by primary-ticketing competitors that shrink accessible resale supply, and regulatory movement on ticket-fee transparency, which affects take-rate economics across the industry. With the stock still trading less than half its $23.50 September 2025 IPO price, estimate revisions after a World Cup quarter are the most plausible re-rating mechanism in either direction.
Peer Cohorts (Per Segment, With Filing Citations)
StubHub (consolidated) (reported)
- LYV (LIVE NATION ENTERTAINMENT, INC.)
- (no filing in the citation store)
- EBAY (eBay Inc.)
- (no filing in the citation store)
- ETSY (ETSY, INC)
- (no filing in the citation store)
Methodology Note
- Priced-in inversion: the valuation is inverted on the current price to recover the operating-income growth, duration, and steady-state margin the price embeds (ROE for financials, FFO growth for REITs).
- Valuation x-ray: the valuation models, grouped into four families (asset, earnings, relative, growth). Each model is expressed as a price/FV ratio (distance from price), not a point fair-value estimate. The spread across families is the disagreement.
- Solvency: net cash/debt, net-debt-to-NOPAT, interest coverage, and share-count CAGR from EDGAR financials (net debt / FFO and fixed-charge coverage for REITs; regulatory-capital framing for financials).
- Peer cohorts: per-segment comparables with deep-linkable SEC filing citations.
Fundamentals sourced from SEC EDGAR filings. Current price from Databento. The priced-in inversion and valuation x-ray are computed by the boothcheck engine; narrative composed by AI from the structured data.
Sources
company Q1 2026 results, May 2026 · StubHub World Cup event pages, 2026 · company Q1 2026 results · company Q1 2026 earnings release and coverage, May 2026