StubHub: Attractive Model, But I'm Staying On The Sidelines

StubHub (STUB) delivered record Q2 revenue and GMS, but adjusted earnings and leverage raise caution. After a sharp post-earnings selloff, STUB trades near all-time lows despite strong topline growth and raised outlook. Adjusting for stock-based compensation and customer deposits reveals higher leverage and lower free cash flow than headline numbers suggest. Regulatory risk, reputation issues, and founder control warrant a Hold rating for STUB stock, though marketplace leadership and expansion ambitions remain attractive.

The secondary market ticket-sales leader, StubHub Holdings, Inc. (STUB), caught my eye on August 12 when it fell nearly 20% after announcing its latest earnings. I always tend to look at least briefly when some well-known