Cameron Mansson-Perrone, an analyst from Morgan Stanley, maintained the Hold rating on Vivid Seats (SEAT – Research Report). The associated price target is $7.50.
Cameron Mansson-Perrone’s rating is based on a nuanced view of Vivid Seats’ current business strategies and financial outlook. He acknowledges the company’s aggressive investment in international expansion, which is anticipated to lower adjusted EBITDA in the short term but has the potential to significantly increase the total addressable market (TAM) in the long run. However, the success of these investments is not yet certain, and there is an evident need for proof that these efforts will indeed lead to higher growth. Moreover, the observed decline in the take rate in 2023 introduces an element of uncertainty regarding the competitive landscape and the company’s ability to maintain or grow its margins in such an environment.
Additionally, Mansson-Perrone notes that while Vivid Seats has maintained its guidance for growth in gross order value (GOV) and revenue, the decrease in the adjusted EBITDA forecast for 2024 due to these international investments suggests near-term margin pressures. Despite this, there is a positive sign in the form of rising repeat purchase rates, which could lead to lower future marketing costs and improved margins. However, the overall mixed financial indicators and the early stages of the company’s geographic expansion mean that Vivid Seats must demonstrate the effectiveness of these investments before a more bullish outlook can be justified. Hence, the Hold rating reflects a cautious optimism tempered by the need for further evidence of sustainable growth and margin improvement.
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Vivid Seats (SEAT) Company Description:
Horizon Acquisition Corp is a blank check company.
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- Vivid Seats to Report Fourth Quarter and Full Year 2023 Financial Results
