Eventbrite (NYSE:EB) Research Report

Eventbrite is a quickly growing high switching cost event management tool and live experience marketplace benefitting from an extremely fragmented online ticketing industry. Eventbrite trades at a reasonable valuation of 9x EV / steady state EBITDA and 10x EV / NTM AEBITDA due to, as we believe, ignorance regarding the churn of Eventbrite’s core and non-core customers of shares. 

Eventbrite is down nearly 40% YTD following Q4 results showing significant churn due to large price increases. Investors and sell-side were spooked when management did not seem to have a concrete strategy to mitigate the lower projected growth. But our research tells us the churn was mostly felt among non-core infrequent customers. In light of this, we think the market has overreacted, with a margin of safety large enough where even mediocre performance won’t lose us money. 

Eventbrite makes money by taking a portion of ticket sales and a fixed amount for each ticket sold as well as a subscription fee (or per event fee) which gives access to the dashboard, tools, and marketing suite. In 2020, amidst collapsing sales, Eventbrite eliminated its on-premises solutions, which were resource-intensive and could not compete with the monopolistic Ticketmaster. Despite this resulting in the loss of half their customers, mostly festivals/music, led to a self-serve platform tailored for smaller frequent event creators which usually hosted events monthly with <100 attendees. These now make most of the sales. Eventbrite was now fully competing in the extremely fragmented self-serve space, which has thousands of tiny players.

Eventbrite (NYSE EB) Research Report.pdf

Download PDF • 4.82MB