StubHub shares rose Friday after Citi upgraded the ticket marketplace to Buy, arguing that stronger app activity could translate into better third-quarter results and push full-year profit toward the top of management’s outlook.
The stock gained 4.3% to $6.20, extending a modest rebound from its 52-week low but leaving it roughly 74% below the $23.50 price at which StubHub went public almost exactly one year ago.
Citi expects third-quarter app downloads to reach about 1.4 million, up from 1.2 million during the second quarter, and sees potential for StubHub to meet or exceed the high end of its $400 million to $420 million adjusted EBITDA forecast.
The analyst still lowered its price target to $7 from $9, however, leaving only modest upside from Friday’s closing price and reflecting continued concerns around event demand and longer-term competitive risks.
That makes the upgrade less a declaration that StubHub’s problems are over than a bet that expectations may finally have fallen far enough.
StubHub’s business has been growing much faster than its share price suggests. The harder question is whether that growth can translate into durable profit after the extraordinary lift from this summer’s FIFA World Cup fades.
The World Cup Produced Record Numbers
StubHub’s second quarter was its strongest revenue quarter as a public company.
Gross merchandise sales, which measure the total value of tickets sold through the marketplace, jumped 34% from a year earlier to $3.1 billion. Revenue increased 33% to $573.1 million.
Adjusted EBITDA nearly doubled to $105.7 million, while the adjusted EBITDA margin widened to 18% from roughly 13% a year earlier.
The company also reported $14.6 million of GAAP net income, reversing a $53.8 million loss in the same quarter last year.
The World Cup was a major contributor.
StubHub said North American and international marketplace growth was led by the tournament, which created unusually high demand for premium tickets and helped push quarterly GMS to a company record.
Management consequently increased its full-year GMS forecast to $10.1 billion to $10.3 billion from $9.9 billion to $10.1 billion.
It did not raise adjusted EBITDA guidance.
That was one reason investors remained cautious after the report. A significant portion of the second-quarter growth came from an event that will not repeat every year, while management explicitly took a more conservative view of growth in the second half.
The next two quarters need to show that StubHub can retain customers acquired during the World Cup rather than simply cycling through a one-time demand surge.
App Downloads Offer an Early Signal
Citi’s upgrade is largely based on evidence that customer activity may be holding up better than feared.
The firm estimates StubHub app downloads will increase to around 1.4 million during the third quarter from approximately 1.2 million in the second.
Downloads are not revenue.
A customer still has to search for an event, purchase a ticket and generate transaction fees before that engagement reaches StubHub’s income statement.
But stronger app adoption matters for a marketplace where customer acquisition costs can consume a large portion of revenue.
StubHub spent heavily on marketing while preparing for its IPO and expanding market share. Improving the percentage of traffic arriving directly through its app or brand can reduce dependence on paid search and other acquisition channels.
There are already signs of operating leverage.
Adjusted sales and marketing expenses have been declining as a percentage of revenue, while adjusted EBITDA margins reached 18% in the second quarter.
Management expects margins to improve further during the second half as the event mix normalizes following the World Cup.
That is one of the most important assumptions underlying the company’s recovery case.
The Stock Is Cheap on Sales, but That Is Not the Whole Valuation
The Yahoo Finance analysis focused heavily on StubHub’s price-to-sales ratio.
At roughly $6.20 a share and about 382 million Class A and Class B shares outstanding, StubHub has an equity market value of approximately $2.4 billion.
Trailing revenue is close to $1.9 billion, putting the stock near 1.2 times sales.
That is dramatically below the valuation investors placed on the company at its IPO and below some internet marketplace businesses.
The comparison becomes less flattering once debt enters the calculation.
StubHub reported company-adjusted net debt of approximately $931 million at the end of June after accounting for its cash position and amounts owed to ticket sellers.
Adding that debt to the market capitalization produces an enterprise value of roughly $3.3 billion.
Against the midpoint of StubHub’s $400 million to $420 million full-year adjusted EBITDA forecast, the company trades around eight times expected 2026 adjusted EBITDA.
That is still a considerably more modest valuation than investors were willing to pay after the IPO, but it is not the extreme bargain that looking only at the 1.2-times sales multiple might suggest.
The balance sheet is improving.
StubHub reduced debt by $200 million during the first seven months of 2026 and by approximately $1.1 billion over the preceding 12 months. Net leverage fell to 3.0 times trailing adjusted EBITDA from 4.5 times at the end of 2025.
Its IPO itself played a large role in that cleanup.
StubHub raised roughly $758 million of net proceeds when it sold shares at $23.50 in September 2025 and subsequently used $750 million to repay term-loan principal.
Investors have effectively marked down the equity even as the company has become less leveraged.
Profitability Has Been Inconsistent
That discount did not appear without reason.
StubHub generated $1.75 billion of revenue in 2025 but adjusted EBITDA fell to $232.4 million from $298.7 million a year earlier.
Free cash flow declined to $158.2 million from $255.1 million.
The company also reported a $1.9 billion GAAP net loss, though the figure was heavily distorted by roughly $1.45 billion of stock-based compensation associated largely with the IPO.
The underlying problem was still visible after stripping out that accounting charge: StubHub entered public markets with margins moving in the wrong direction and then issued a 2026 outlook that fell well short of expectations.
Performance has improved considerably since.
First-half 2026 revenue reached roughly $1.02 billion, up 23% from a year earlier, while adjusted EBITDA increased to $177.7 million from $102.3 million.
The second quarter accelerated that improvement.
What remains unclear is how much of the acceleration came from enduring improvements in StubHub’s marketplace and how much came from the World Cup.
Third Quarter Becomes the Cleaner Test
The next earnings report should provide a much cleaner read.
By then, most of the unusually concentrated World Cup demand will have moved through the marketplace. StubHub will have to rely more heavily on its ordinary mix of concerts, professional sports and international events.
Citi’s app-download data suggest engagement remained strong after the tournament.
If that translates into GMS growth while adjusted EBITDA moves toward or above the upper end of StubHub’s $420 million full-year forecast, the stock’s post-IPO collapse will look increasingly disconnected from current operating performance.
If downloads rise but ticket activity slows, the low sales multiple will make more sense.
The next report therefore needs to settle a question that a price-to-sales ratio cannot answer: whether StubHub is becoming a sustainably more profitable marketplace, or whether its strongest quarter of 2026 was mainly the product of the biggest sporting event in the world.