(Reuters) -StubHub Holdings' shares rose nearly 5% in premarket trading on Monday, as Wall Street analysts backed the ticketing platform's potential for long-term growth despite the stock's rocky debut last month.
Brokerages began coverage on StubHub on an upbeat note after the end of the industry-mandated quiet period.
"We believe through its well-established, dominant position in the secondary ticketing market, StubHub will be able to establish a formidable entry into the materially larger primary
ticketing market," Evercore ISI analysts said, assigning an "outperform" rating.
At $19.81 on Monday, the shares are already below its IPO price of $23.50, which suggests the market is not fully convinced about StubHub's ability to grow quickly or compete with bigger players, according to analysts.
Its industry rivals have also struggled in the public market, except Ticketmaster-parent Live Nation.
StubHub's stock performance contrasts sharply with recent tech IPOs such as Klarna and Figma, which saw double-digit gains in early trading days.
"We believe STUB shares, trading at a discount to peers, offer compelling risk/reward as we expect strong execution in core resale and ads, while direct issuance expectations seem muted," J.P. Morgan analysts said while initiating coverage with an "outperform" rating.
The company raised nearly $800 million in its long-awaited U.S. IPO, with proceeds earmarked for reducing its $2.4 billion debt. The listing marked StubHub's return to public markets after multiple delays, following its $4.05 billion acquisition by Viagogo in 2020 and earlier ownership under eBay.
Founded in 2000, StubHub operates a ticketing marketplace in more than 200 countries, enabling buyers to purchase tickets for live events, including sports and music performances.
J.P. Morgan and Goldman Sachs led a 14-firm underwriting syndicate for StubHub's IPO.
(Reporting by Rashika Singh in Bengaluru; Editing by Leroy Leo)
