Shares of online ticket exchange Vivid Seats Inc. (NASDAQ: SEAT) experienced a tumultuous journey, touching an all-time intraday low of $5.54 on February 2, 2024, amidst concerns over private equity overhang.
However, a subsequent rebound of around 10% has sparked investor interest. In this analysis, we delve deeper into Vivid Seats, exploring its business model, recent acquisitions, financial performance, and future outlook to provide informed investment recommendations.
Company Overview
Vivid Seats Inc., headquartered in Chicago, operates as an online ticket marketplace, facilitating transactions between buyers and sellers.
ed in 2001, Vivid Seats went public through a merger with special purpose acquisition company (SPAC) Horizon Acquisition Corporation in 2021. Currently trading at just over six dollars per share, Vivid Seats commands a market capitalization of nearly $1.3 billion.
Read More: Astronics Corporation (NASDAQ: ATRO) Sees Strong Year-On-Year Revenue Growth, But is it a Buy?
Business Model
Marketplace: Facilitates transactions between buyers and sellers, earning 10% of the gross order value (GOV) from sellers and additional revenue from service fees. The segment also offers buyer insurance, private label offerings, and fantasy sports, contributing significantly to revenue.
Resale: Involves Vivid Seats acquiring tickets for resale on secondary markets, including its own platform. This segment has shown steady growth, bolstering the company’s revenue.
Recent Acquisitions
Vivid Seats expanded its total addressable market (TAM) through strategic acquisitions. The acquisition of Vegas.com and Wavedash in 2023 increased its TAM by over 50%, positioning the company for future growth opportunities.
Vegas.com Acquisition: In November 2023, Vivid Seats acquired Vegas.com for $243.8 million, gaining access to a $6 billion TAM in the entertainment capital of the US.
Financial Performance: Despite facing challenges such as private equity overhang, Vivid Seats has demonstrated resilience in its financial performance.
Q3 2023 Highlights: Vivid Seats reported net income of $0.07 per share (GAAP) and Adjusted EBITDA of $33.4 million on revenue of $188.1 million, marking significant growth compared to the previous year.
Also Read: GoodRx Holdings Inc (GDRX) Delivers Mixed Results for Q4 and Full Year 2023: Is it Time to Buy?
Balance Sheet & Analyst Commentary
Vivid Seats maintains a strong balance sheet, with cash reserves of $105 million and access to a $100 million credit facility. Analyst sentiment remains mixed, with expectations of continued growth in revenue and earnings.
Investment Recommendation
While private equity overhang remains a concern, Vivid Seats’ recent acquisitions and improved valuation metrics present an attractive investment opportunity.
Trading at reasonable multiples and exhibiting solid cash generation, Vivid Seats merits consideration for a watchlist position, with potential for future growth.
As Vivid Seats navigates challenges posed by private equity overhang, investors should monitor its performance closely.
With a strong market position, strategic acquisitions, and favorable valuation metrics, Vivid Seats has the potential to unlock significant value for investors in the long term.
Additional Information
In addition to the analysis provided, Vivid Seats’ management has emphasized the importance of its loyalty program in driving repeat business.
Launched in 2019, the loyalty program offers incentives such as a buy 10 tickets get one free promotion, resulting in an increase in repeat buyers’ orders as a percentage of total transactions from 47% in 2018 to 56% in 2022.
Read Next: Genworth Financial Announces Fourth Quarter 2023 Results
DISCLAIMER
You should read and understand this disclaimer in its entirety before joining or viewing the website or email/blog list of SmallCapStocks.com (the “Publisher”). The information (collectively the “Advertisement”) disseminated by email, text or other method by the Publisher including this publication is a paid commercial advertisement and should not be relied upon for making an investment decision or any other purpose. The Publisher is engaged in the business of marketing and advertising the securities of publicly traded companies in exchange for compensation. The track record, gains, upside, and/or losses mentioned in the Advertisement, if any, should not be considered as true or accurate or be the basis for an investment. The Publisher does not verify the accuracy or completeness of any information included in the Advertisement. While the Publisher does not charge for the SMS service, standard carrier message and data rates may apply. To unsubscribe from receiving promotional text messages to your phone sent via an autodialer, using your phone reply to the sender’s phone number with the word STOP or HELP for help.
The Advertisement is not a solicitation or recommendation to buy securities of the advertised company. An offer to buy or sell securities can be made only by a disclosure document that complies with applicable securities laws and only in the states or other jurisdictions in which the security is eligible for sale. The Advertisement is not a disclosure document. The Advertisement is only a favorable snapshot of unverified information about the advertised company. An investor considering purchasing the securities, should always do so only with the assistance of his legal, tax and investment advisors. Investors should review with his or her investment advisor, tax advisor or attorney, if and to the extent available, any information concerning a potential investment at the web sites of the U.S. Securities and Exchange Commission (the "SEC") at www.sec.gov; the Financial Industry Regulatory Authority (the "FINRA") at www.FINRA.org, and relevant State Securities Administrator website and the OTC Markets website at www.otcmarkets.com. The Publisher cautions investors to read the SEC advisory to investors concerning Internet Stock Fraud at www.sec.gov/consumer/cyberfr.htm, as well as related information published by the FINRA on how to invest carefully. Investors are responsible for verifying all information in the Advertisement. As an advertiser, we do not verify any information we publish. The Advertisement should not be considered true or complete.
The Publisher does not offer investment advice or analysis, and the Publisher further urges you to consult your own independent tax, business, financial and investment advisors concerning any investment you make in securities particularly those quoted on the OTC Markets. Investing in securities is highly speculative and carries an extremely high degree of risk. You could lose your entire investment if you invest in any company mentioned in the Advertisement. You acknowledge that we are not an investment advisory service, a broker-dealer or an investment adviser and we are not qualified to act as such. You acknowledge that you will consult with your own independent, tax, financial and/or legal advisers regarding any decisions as to any company mentioned here. We have not determined if the Advertisement is accurate, correct or truthful. The Advertisement is compiled from publicly available information, which include, but are not limited to, no cost online research, magazines, newspapers, reports filed with the SEC or information furnished by way of press releases. Because all information relied upon by us in preparing an advertisement about an issuer comes from a public source, it is not reliable, and you should not assume it is accurate or complete.
By your subscription to our profiles, the viewing of this profile and/or use of our website, you have agreed and acknowledged the terms of our full disclaimer and privacy policy which can be viewed at the following link: www.SmallCapStocks.com/Disclaimer and www.SmallCapStocks.com/Privacy-Policy
By accepting the Advertisement, you agree and acknowledge that any hyperlinks to the website of (1) a client company, (2) the party issuing or preparing the information for the company, or (3) other information contained in the Advertisement is provided only for your reference and convenience. The advertiser is not responsible for the accuracy or reliability of these external sites, nor is it responsible for the content, opinions, products or other materials on external sites or information sources. If you use, act upon or make decisions in reliance on information contained in any disseminated report/release or any hyperlink, you do so at your own risk and agree to hold us, our officers, directors, shareholders, affiliates and agents harmless. You acknowledge that you are not relying on the Publisher, and we are not liable for, any actions taken by you based on any information contained in any disseminated email or hyperlink.
Joel Gbolade is a seasoned financial writer with over seven years of experience in freelance content creation. Specializing in the financial niche and stock market, he has crafted engaging content for numerous websites. His background in technology extends to data processing and computer proficiency, enriching his comprehensive skill set in the financial realm.
