StubHub Holdings entered the second half of 2026 with one of the strongest quarters in its history, powered by record demand surrounding the FIFA World Cup.
Gross merchandise sales jumped 34% year over year to a record $3.1 billion, while revenue climbed 33% to $573.1 million, according to the company’s second-quarter earnings release.
StubHub (STUB) also reported adjusted EBITDA of $105.7 million, up 94% from a year earlier, as the ticket marketplace benefited from a wave of demand tied to the tournament.
Despite those numbers, Bank of America analyst Justin Post came away from the quarter with a more cautious view of what happens once the World Cup catalyst fades.
In a note given to TheStreet, Post downgraded StubHub to Underperform from Neutral and cut his price objective to $7.50 from $11.
The analyst believes the strength of the second quarter could be masking a much slower growth setup for the remainder of 2026 and into next year.
StubHub’s World Cup boom sets a high bar
StubHub’s record quarter also produced a sharp improvement in cash generation.
The company generated $321.9 million in operating cash flow and $309.7 million in free cash flow during the quarter, according to its SEC filing. Net leverage fell to 3.0 times trailing 12-month adjusted EBITDA from 4.5 times at the end of 2025.
Management raised its full-year GMS outlook to between $10.1 billion and $10.3 billion, up from its previous forecast of $9.9 billion to $10.1 billion.
However, StubHub left its adjusted EBITDA guidance unchanged at $400 million to $420 million.
BofA estimated that second-quarter GMS came in roughly $500 million above Wall Street expectations, while StubHub increased its full-year GMS guidance by only about $200 million.
Post said the high end of the new outlook implies second-half GMS growth of roughly 4%.
The analyst now expects third-quarter GMS of about $2.46 billion, representing growth of just 1% year over year, before growth improves to around 7% in the fourth quarter.
BofA sees a risk that World Cup demand pulled ticket purchases forward or temporarily changed StubHub’s market-share dynamics during the quarter.
Bank of America sees slower growth ahead
The bigger concern extends into 2027.
BofA cut its 2027 GMS estimate by roughly 5% to about $10.8 billion from $11.3 billion. The firm also reduced its 2027 adjusted EBITDA estimate to $499 million from $521 million.
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Post expects StubHub’s GMS growth to trail the broader internet sector next year, while the company will also face difficult comparisons against its World Cup-driven performance in the second quarter of 2026.
The analyst also changed the way BofA values the company, moving from a sum-of-the-parts approach to a total EBITDA methodology.
BofA now applies a 7.8 times multiple to projected 2027 EBITDA, less estimated net debt, producing the new $7.50 price objective.
Post argues that StubHub deserves a discount to the roughly 13 times multiple assigned to BofA’s broader gig economy and entertainment comparison group because of its slower expected growth.
The Federal Trade Commission confirmed an April settlement requiring StubHub to provide $10 million in consumer redress over allegations involving mandatory ticket-fee disclosures.
House Oversight Committee Democrats also sent CEO Eric Baker a letter in July requesting information about StubHub’s relationships with professional ticket resellers and an affiliated investment fund.
Stronger NFL and NBA ticket demand, major 2027 concert tour announcements, improving advertising initiatives, and strong free-cash-flow conversion could all provide upside.
Related: StubHub unveils first-of-its-kind program for festival fans
