Eventbrite Plummets 30% On Lower Guidance, But This Analyst Remains Bullish

Ticketing and event company Eventbrite Inc EB reported mixed fourth-quarter earnings and concerning first-quarter guidance. The company sees first-quarter sales of $80-$84 million, lower than the $91.1-million estimate.

RBC remains a bull on the stock although with a "less constructive" tone.

The Analyst

RBC Capital Markets' Mark Mahaney maintains an Outperform rating on Eventbrite with a price target lowered from $37 to $30.

The Thesis

Eventbrite's earnings were mixed as the company likely "hit some execution hurdles," Mahaney said in a research report. The main takeaways from the print include:

• Paid ticket growth of 18 percent year over year to 26.7 million versus expectations of 25.3 million;
• Revenue per paid ticket of $2.84 slightly missed estimates of $2.88;
• A new payment provider was launched in international markets, which can handle transactions in local currencies; and
• The company ended the quarter with $438 million in cash.

Overall fourth-quarter trends were "mixed-to-positive" and Mahaney said the stock's sell-off& can be attributed to challenges around the Ticketfly migration. The migration is likely to be complete by the second quarter, so the bullish stance on the stock remains "fully intact," especially at six times EV/sales.

The company continues to target the "very large and fragmented" total market opportunity, which Mahanaey said could result in a premium revenue growth rate of 20 percent or more.

Price Action

Shares of Eventbrite were trading lower by 27 percent at $23.49 Friday morning.

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