On Thursday, DA Davidson adjusted its outlook on Vivid Seats Inc. (NASDAQ: SEAT), a ticket marketplace, by reducing its price target from $6.50 to $6.00, while still recommending a Buy rating for the stock. The firm's decision comes in light of a weakening live events supply noted throughout the third quarter of 2024.
The analyst from DA Davidson cited third-party data sources that indicated August had experienced a particularly soft performance for the live events industry, not just for Vivid Seats.
The scarcity of major A-list events in large venues during the quarter, especially compared to the same period in the previous year, is expected to challenge Vivid Seats' ability to surpass or even meet consensus expectations for the remainder of the year.
Despite the current challenges, the analyst expressed a cautiously optimistic view for the 2025 outlook. The anticipation of some 2025 events being announced and tickets going on sale in the fourth quarter of 2024 could lead to a significant sequential improvement in Vivid Seats' business.
This potential uptick is seen as a chance for the company to finish the year at the lower end of their latest full-year guidance, which projects revenues between $810 million and $830 million and adjusted EBITDA ranging from $160 million to $170 million.
The firm's revised estimates reflect the current state of the live events industry and its impact on Vivid Seats. Despite the price target reduction, the Buy rating indicates a continued positive outlook on the company's stock in the longer term.
In other recent news, Vivid Seats Inc. has been subject to several adjustments by analysts. Canaccord Genuity reduced its price target for the company to $7.00, citing potential normalization in the live event sector. Meanwhile, Craig-Hallum lowered its target to $8.00 due to a significant slowdown in the concert segment.
Benchmark also reduced its price target for Vivid Seats to $10, despite the company's robust Q1 2024 financial results. These results included over $1 billion in Gross Order Value (GOV), $191 million in revenues, and $39 million in adjusted EBITDA.
RBC Capital and DA Davidson also adjusted their price targets for Vivid Seats, reducing them to $7 and $6.50 respectively, citing various challenges facing the company. Despite these adjustments, analysts remain optimistic about Vivid Seats' long-term prospects.
In another development, Vivid Seats announced a multi-year media collaboration with I Am Athlete (IAA), aiming to produce exclusive content and offer unique fan engagement opportunities. These recent developments highlight the dynamic environment within which Vivid Seats operates.
InvestingPro Insights
As Vivid Seats Inc. navigates through a period of industry fluctuation, real-time data from InvestingPro offers additional context for investors considering the company's stock. With a market capitalization of approximately $847.94 million and a forward Price/Earnings (P/E) Ratio of 13.03, the company appears to be maintaining a moderate valuation in the market. Moreover, recent revenue growth figures are promising, with a 19.65% increase in revenue over the last twelve months as of Q2 2024, showcasing the company's capacity to expand its top-line figures even in challenging times.
However, an InvestingPro Tip highlights that analysts have recently revised their earnings expectations downwards for the upcoming period, which may be a point of concern for potential investors. Furthermore, the stock has seen a significant price drop over the last three months, with a 23.97% decrease, reflecting the market's reaction to the current headwinds faced by the live events industry. Nonetheless, it's worth noting that analysts predict Vivid Seats will be profitable this year, and the company has been profitable over the last twelve months, which could provide some reassurance amidst market volatility.
For investors seeking a deeper analysis, there are additional InvestingPro Tips available, offering a broader perspective on Vivid Seats' financial health and market position. These insights can be found at https://www.investing.com/pro/SEAT and may serve as a valuable resource for making more informed investment decisions.
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