Live Experiences And DIY Tools Will Unlock Market Potential

Key Takeaways

• Emphasis on scalable self-service tools, high-margin products, and disciplined cost management is enhancing profitability and operating leverage.
  
• Strategic focus on larger creators and immersive events is driving platform monetization and supporting sustained revenue and earnings growth.
  
• A shift toward smaller events, intense competition, changing monetization, and rising costs threaten Eventbrite's revenue growth, profitability, and long-term earnings stability.

Catalysts

Operates a two-sided marketplace that provides self-service ticketing and marketing tools for event creators in the United States and internationally.

• Rising demand for live experiences, particularly among younger demographics who increasingly prioritize events over material goods, continues to generate more opportunities for individual and small group event organizers-the core users of Eventbrite's platform-supporting a rebound and potential acceleration in paid ticket revenue growth.
  
• Continued adoption and improvement of Eventbrite's self-service and DIY tools for event organizers are lowering customer acquisition and support costs, thereby structurally improving net margins and operating leverage as the company scales.
  
• The expansion and international roll-out of high-margin products such as Eventbrite Ads, coupled with investments in discovery and personalization tools, are set to increase both overall platform monetization and gross margin.
  
• Eventbrite's increased focus and investment in acquiring larger, higher-volume creators and expanding into high-impact event series (e.g., immersive experiences) are expected to boost the average tickets sold per creator, directly benefiting both revenue and long-term earnings growth.
  
• Structural operating expense reductions and a disciplined capital management approach are already leading to notable improvements in adjusted EBITDA margins, positioning the company for improved profitability and stronger future cash flows as top-line growth resumes.

Eventbrite Future Earnings and Revenue Growth

Assumptions

• Analysts are assuming Eventbrite's revenue will grow by 7.5% annually over the next 3 years.
• Analysts assume that profit margins will increase from -6.9% today to 2.1% in 3 years time.
• Analysts expect earnings to reach $7.9 million (and earnings per share of $0.06) by about August 2028, up from $-20.9 million today. However, there is a considerable amount of disagreement amongst the analysts with the most bullish expecting $15.5 million in earnings, and the most bearish expecting $-4.4 million.
• In order for the above numbers to justify the analysts price target, the company would need to trade at a PE ratio of 49.4x on those 2028 earnings, up from -12.0x today. This future PE is greater than the current PE for the US Entertainment industry at 32.1x.
• Analysts expect the number of shares outstanding to grow by 0.42% per year for the next 3 years.
• To value all of this in today's terms, we will use a discount rate of 12.19%, as per the Simply Wall St company report.

Eventbrite Future Earnings Per Share Growth

Risks

• Eventbrite is experiencing a shift toward smaller events and lower-volume creators returning faster than larger, high-volume organizers, resulting in fewer tickets sold per creator and creating a gap in revenue outlook-a trend that, if it persists, could lead to weaker revenue growth and impact long-term earnings.
  
• The company's net revenue declined 14% year-over-year, with a 10% drop in ticketing revenue and significantly reduced marketplace revenue due to the elimination of organizer fees, suggesting that Eventbrite may struggle with maintaining or growing top-line revenue in the face of changing monetization models.
  
• Intense competition from both large platforms and smaller players in the event-ticketing landscape is ongoing; if Eventbrite cannot continue to attract larger, high-volume organizers or loses mid-market share, its revenue streams and scalability could be at risk, impacting operating leverage and potential margin expansion.
  
• Despite recent OpEx reductions and improved adjusted EBITDA margins, Eventbrite remains unprofitable on a GAAP basis with a net loss of $2.1 million this quarter, underscoring persistent challenges in achieving sustainable GAAP profitability and leaving the business sensitive to cost or revenue shocks that could erode net margins and long-term earnings.
  
• While Eventbrite highlights secular tailwinds in live events, broader shifts toward hybrid or virtual events, increased regulation, and rising cybersecurity/compliance costs (not specifically mentioned in the call, but persistent industry risks) could drive up operating expenses and potentially dampen ticket demand or user trust, posing a risk to future revenue and margin stability.

Valuation

• The analysts have a consensus price target of $2.85 for Eventbrite based on their expectations of its future earnings growth, profit margins and other risk factors.
  
• In order for you to agree with the analyst's consensus, you'd need to believe that by 2028, revenues will be $374.1 million, earnings will come to $7.9 million, and it would be trading on a PE ratio of 49.4x, assuming you use a discount rate of 12.2%.
  
• Given the current share price of $2.6, the analyst price target of $2.85 is 8.8% higher. The relatively low difference between the current share price and the analyst consensus price target indicates that they believe on average, the company is fairly priced.
  
• We always encourage you to reach your own conclusions though. So sense check these analyst numbers against your own assumptions and expectations based on your understanding of the business and what you believe is probable.