Why StubHub Plunged 35% in March

Shares of StubHub (NYSE: STUB) plunged 34.8% in March, according to data from S&P Global Market Intelligence.

StubHub delivered its second-ever earnings report after going public last September, but fourth-quarter results underwhelmed expectations. Moreover, management also hinted that 2026 might not see a significant upswing in the company's direct ticketing revenue as some might have expected; meanwhile, a portion of the secondary ticketing industry has also come under regulatory scrutiny in recent weeks.

Still, after StubHub's stock has fallen from an IPO price of $23.50 to just above $6, shares look somewhat enticing at these low levels.

Investors are still getting a feel for StubHub's business model

In the fourth quarter, StubHub saw a 15.8% decline in revenue to $449.2 million, with adjusted (non-GAAP) losses per share of ($0.05). Both figures missed expectations.

On top of the missed expectations, management disclosed a few other tidbits that may have turned off investors.

First, the company has been making efforts to expand from event ticket resales into direct ticketing. On the call, management said it is not going to rush this out but will instead invest in developing the tech tools that make it easier for rights holders to use StubHub's marketplace. So, management said not to expect material direct ticketing revenue this year.

Additionally, management acknowledged some recent headlines regarding possible regulation of secondary-market "scalping," or buying tickets in bulk and reselling them at marked-up prices. Management stated that it believes about 10% of StubHub's gross merchandise volume (GMV) was comprised of these types of sellers. 10% doesn't sound like much, but it could have a significant near-term impact if regulators clamp down on digital "scalping" all at once.

All this being said, things might not be as dire as they seem on the surface. Management noted that in the event space, there is significant quarter-to-quarter lumpiness in event timing, so it's best to look at full-year results. For the full year 2025, StubHub grew underlying GMV by 6%, and by an even more impressive 18% when factoring out the end of the Taylor Swift Eras tour in 2024.

In addition, other one-time events skewed results. In May of 2025, the Federal Trade Commission mandated "all-in" pricing, requiring ticketing platforms to disclose the full ticket cost upfront rather than waiting until checkout to reveal the additional platform fee. In response, StubHub lowered its take-rate fees and increased its marketing spend to gain market share. But those lower fees led to a slight revenue decline, even though full-year GMV grew 6%.

Image source: Getty Images.

Looking ahead

Management did give full-year 2026 guidance on the call that signaled better things ahead, forecasting 9% GMV growth and adjusted EBITDA (earnings before interest, taxes, depreciation, and amortization) to nearly double from $232 million last year to $410 million in 2026 at the midpoint.

StubHub's enterprise value, or its market cap plus net debt, has now fallen to around $3.3 billion. So, if management hits its 2026 guidance, shares now trade at just eight times forward EBITDA. That's a very reasonable valuation for a company growing around 10%.

As such, StubHub stock may be worth a look down here, as it appears undervalued if it can, in fact, reverse last year's declines and return to growth.

Billy Duberstein and/or his clients have no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.