StubHub Holdings, Inc. (STUB) stock intrinsic value fair value estimate & owner earnings analysis

StubHub Holdings runs a global online marketplace for live-event tickets. It uses the StubHub brand and, in some international markets, viagogo. It earns a fee on each ticket that changes hands. In 2025 fans bought $9.2 billion of tickets through it. That was up 6%, or 18% if you leave out the prior year's Taylor Swift "Eras" tour. Revenue was $1.75 billion in 2025, compared with $1.77 billion in 2024 and $1.37 billion in 2023. About 85% of 2025 fees were booked in the United States, 11% in Switzerland (where the international business books its sales) and the rest elsewhere. The company went public in September 2025 and used the money to repay $910 million of debt. How we measured earnings. We start from the cash the business generates. We then take out the swing in money it holds for buyers and sellers: fans pay before events and sellers are paid later, so that balance swells in busy periods. It grew by $472 million in the first half of 2026 alone, but it belongs to customers, not owners. We subtract stock-based pay as a real cost, and we subtract the capital spending needed to keep the platform running. On that basis owners earned about $150 million in 2023 and $75 million in 2024, and lost $36 million in 2025. Two judgements matter. First, at the IPO the company booked $1.40 billion of stock pay at once, for awards earned over earlier years. We treat that as a one-time catch-up, not a 2025 cost, because the dilution it created already shows up in today's larger share count: about 382 million diluted shares, against 304 million in 2024. We value the business per current share. Second, those earlier years understate what paying staff in stock costs on an ongoing basis. In the first half of 2026 the company expensed $100 million of stock pay and put another $34.5 million into capitalized software costs. That is a pace of roughly $250 million a year. The business today. Before stock pay and interest, the business generated about $392 million in 2023, $317 million in 2024 and $205 million in 2025. The company blames the 2025 fall on lower fee rates, heavier spending to win customers and new initiatives. We use the middle year, $317 million, as the starting level. Two costs come out of it. Interest is roughly $85 million a year on $1.42 billion of term loans due March 15, 2030; first-half 2026 interest expense was $39.5 million, against $86.3 million a year earlier. Stock pay is about $250 million a year. That leaves owners roughly break-even today, and this is the central fact of the valuation. The first half of 2026 was encouraging: revenue rose 23%, and owner earnings were about $22 million against a $5 million loss a year earlier. But the company itself warns that events such as the FIFA World Cup do not happen every year, so two quarters are not enough for us to raise the starting level. Base case ($5.32 a share). Earnings before stock pay grow 6% a year for ten years. That matches 2025 ticket-volume growth and is below the 13% yearly revenue growth from 2023 to 2025. Stock pay eases from $250 million to $215 million by 2028, as the $165.7 million of already-granted awards still unexpensed at the end of 2025 is used up. After that it grows 4% a year. Interest stays near $85 million. Owner earnings rise from about break-even in 2026 to roughly $200 million by 2035. We hold that level for another twenty years, then assume nothing further. What keeps it going is the depth of buyers and sellers on both sides of the marketplace, which makes it hard to displace. Bear case (-$1.79 a share). The 2025 pattern of fee cuts and heavy marketing continues. Earnings before stock pay stay near $205 million and grow only 2% a year, while stock pay and interest stay where they are. Owner earnings are a loss of $55 million to $130 million a year for a decade, then fade out over five more years. In this case the company appears to owe more than it is worth, by roughly $0.7 billion, or about $1.79 a share. Its debt is larger than the value of a business that earns little once it has paid its people in stock. The filing names the pressures behind this case: - the Federal Trade Commission's all-in pricing rule, in effect since May 2025 - state ticket-resale laws - a $10 million amount set aside for a U.S. regulatory investigation - a possible $13 million loss from a non-U.S. investigation - competition in ticketing Bull case ($13.68 a share). Volume grows close to 2025's underlying 18% rate and the first-half 2026 pace. Earnings before stock pay rise 12% a year for five years and 7% for five more. Stock pay settles near $200 million and then grows 3% a year. The resulting owner earnings of roughly $450 million a year last for thirty years after 2035. We gave no value to the cash held for customers, or to refinancing the 2030 loans on better terms, because we cannot point to evidence for either. What would make this wrong. Stock pay is the biggest swing factor: a lasting difference of $50 million a year moves the base value by about $1.80 a share. A return to 2023 fee levels would raise the value; further fee cuts would push it toward the bear case. With owners roughly break-even today, a bear case below zero and debt due in 2030, the margin-of-safety price is about $2.25 a share, and it applies only once profits after stock pay prove lasting.