STUB
StubHub Holdings, Inc.
$9.98
High-Growth Software
80%
Revenue × Terminal Margin DCF
Strong
·
Conviction
Undervalued
Trading 79.0% below fair value
You pay
$9.98
Bear
$19.13
Fair
$47.63
Bull
$70.27
Bear
$19.13
+91.7%
18% rev growth, 21% terminal margin
Fair
$47.63
+377.2%
30% rev growth, 28% terminal margin
Bull
$70.27
+604.1%
35% rev growth, 32% terminal margin
Key Value Driver
Revenue growth (30%) × margin expansion to 28%
Terminal Value % of EV
64%
Implied Market Multiple
2.2x
Summary
Our base-case estimate uses a discounted cash flow model based on revenue growth and long-run free cash flow margins. We then blend that result with the average analyst price target of $12.81 from 9 analysts, using a 20% weight on analyst consensus. That produces an estimated intrinsic value of $47.63 per share.
Warnings
Our estimate assumes profit margins grow from 11% to 28% over 10 years. If that improvement stalls, the company is worth considerably less.
Gross margin of 81% means each dollar of revenue is highly profitable. As the company grows, overhead costs should shrink as a share of revenue, boosting overall profits.
Wall Street's average price target is $12.81 (from 9 analysts). Our estimate is 340% above the consensus -- consider that gap carefully.
Key Risks
- Current FCF misleads — the model values future margins, not today's cash
- SBC dilution is the hidden tax: 2-4% annual share growth compounds fast
- Revenue deceleration is inevitable — the question is when and how steep