Why StubHub Holdings Stock Zoomed More Than 35% Higher in May

For the second month in a row, StubHub Holdings (NYSE: STUB) stock landed well in positive territory in May. Bullish investors pushed the ticket company's equity to a gain of over 35%, with much of this coming from a surprise net profit it posted in its latest quarterly earnings report. Several analyst price target bumps didn't hurt either.

That's the ticket!

StubHub's first-quarter figures were released on May 13, and they offered plenty of reasons for investors to be cheerful. Firstly, the company reported a 12% year-over-year revenue gain to $446 million. On top of that, gross merchandise sales (GMS) also headed north, rising by 7% to hit $2.2 billion.

Image source: Getty Images.

Even more encouraging was the bottom-line result. StubHub flipped into the black during the quarter, with net income under generally accepted accounting principles (GAAP) totaling $48 million, or $0.06 per share, from the year-ago loss of almost $22.2 million.

Both figures easily topped the consensus analyst estimates. Pundits tracking the company were collectively projecting $425 million for revenue, and only $0.01 per share on the bottom line.

StubHub reiterated its rather bullish guidance for the entirety of 2026. It's expecting to book GMS of $9.9 billion to $10.1 billion, which would exceed 2025's $9.2 billion. Non-GAAP (adjusted) earnings before interest, taxes, depreciation, and amortization (EBITDA) is forecast at $400 million to $420 million. That compares most favorably to last year's result of $232 million.

Management attributed the better-than-expected improvements to frothiness across both its foundational live-tickets business and its resale marketplace. Consumers are still very eager to witness one-off entertainment experiences, and are willing to pay relatively high prices for the privilege.

Several analysts who follow StubHub didn't waste much time adjusting their takes for the better after those numbers were made public. One of the more bullish of these pundits was Eric Sheridan of white-shoe investment bank Goldman Sachs. He raised his price target by $1 per share to $16 and maintained his buy recommendation.

According to reports, Sheridan was particularly encouraged by StubHub's gains in market share and by the aforementioned lively events space in which it operates. He also pointed out that there were high-demand events coming later in the year; many of these tickets should be transacted through the company's system.

Peak popularity, perhaps

It might be telling, however, that other analysts updating their views on StubHub after earnings didn't move from their hold recommendations. The reasons varied; personally, I'd worry that the company's business is either at or near a peak. Live events in particular have become awfully expensive, to the point where even dedicated fans on a decent budget have to rethink whether they really want/need to attend a game, concert, etc.

I don't feel the present situation is sustainable and, no matter how clever and talented StubHub's management, the company will struggle with this. I'd avoid the stock, myself.

Eric Volkman has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Goldman Sachs Group. The Motley Fool has a disclosure policy.