Coverage Initiated: $45 Price Target, Strong Buy for Eventbrite
While Eventbrite is more than a decade old, the company is continuing to grow at breakneck speed. We are predicting revenue will grow by 35% to $390M and EBDITA will climb to $35-40M in 2019. Eventbrite’s product portfolio is stronger than any other competitor and positions the company to capture the fast-growing events space.
Eventbrite’s Co-Founder and CEO, Julia Hartz has proven to her stakeholders a strong commitment to innovation and solid financial performance. Hartz stepped up from President in 2016 and has previous experience at FX Networks and MTV Networks. In a recent interview with the NYTimes, Hartz highlighted her intense focus on people and fostering a good company culture.
Eventbrite’s moat in the events business is unbeatable, which places the company as a potential acquisition. We believe that the company could be a potential target for Square, Inc. or Facebook, Inc. Square’s relationship with small businesses and efficient payment processing abilities could create substantial synergies, while Facebook’s interest in fostering more meaningful relationships could drive the company to enter the in-person events space.
The company’s stagnant stock price presents an opportunity for investors, falling 14% from its IPO price in September. We believe that Eventbrite’s strong growth, solid cash position, and aggressive EBITDA margins presents a large upside. We are setting a price target of $45 per share, 45% higher than the current margin price.
Price Target: $45
Recommendation: Strong Buy
Disclaimer: Prenzler holds a small long position in Eventbrite, Inc.