Earnings Update: Here’s Why Analysts Just Lifted Their Eventbrite, Inc. Price Target To US$20.00

Eventbrite, Inc. (NYSE:EB) just released its quarterly report and things are looking bullish. Revenues and losses per share were both better than expected, with revenues of US$82m leading estimates by 7.3%. Losses were smaller than analysts expected, coming in at US$0.36 per share. Analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. We’ve gathered the most recent forecasts to see whether analysts have changed their earnings models, following these results.

See our latest analysis for Eventbrite

NYSE:EB Past and Future Earnings, November 9th 2019
NYSE:EB Past and Future Earnings, November 9th 2019

Taking into account the latest results, the latest consensus from Eventbrite’s six analysts is for revenues of US$365m in 2020, which would reflect a solid 14% improvement in sales compared to the last 12 months. Losses are forecast to balloon 31% to US$0.58 per share. Before this latest report, the consensus had been expecting revenues of US$362m and US$0.53 per share in losses. There was no real change to the revenue estimates, but analysts do seem more bullish on earnings, given the earnings per share expectations following these results.

Despite expectations of heavier losses next year, analysts have lifted their price target 6.4% to US$20.00, perhaps implying these losses are not expected to be recurring over the long term. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company’s valuation. The most optimistic Eventbrite analyst has a price target of US$23.00 per share, while the most pessimistic values it at US$18.00. The narrow spread of estimates could suggest that the business’ future is relatively easy to value, or that analysts have a clear view on its prospects.

Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether analysts are more or less bullish relative to other companies in the market. We would highlight that Eventbrite’s revenue growth is expected to slow, with forecast 14% increase next year well below the historical 27%p.a. growth over the last three years. Compare this to the 132 other companies in this market with analyst coverage, which are forecast to grow their revenue at 15% per year. Factoring in the forecast slowdown in growth, it looks like analysts are expecting Eventbrite to grow at about the same rate as the wider market.

The Bottom Line

The most important thing to take away is that analysts reconfirmed their loss per share estimates for next year. They also reconfirmed their revenue estimates, with the company predicted to grow at about the same rate as the wider market. There was also a nice increase in the price target, with analysts feeling that the intrinsic value of the business is improving.

With that said, the long-term trajectory of the company’s earnings is a lot more important than next year. At Simply Wall St, we have a full range of analyst estimates for Eventbrite going out to 2023, and you can see them free on our platform here..

You can also see our analysis of Eventbrite’s Board and CEO remuneration and experience, and whether company insiders have been buying stock.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.