Eventbrite Analyst Predicts Attractive Risk-Reward, 'Meaningful Margin Expansion'

Shares of Eventbrite Inc EB spiked in early trading on Thursday, ahead of the release of the company’s quarterly report next week.

With operational improvements, the company is heading toward a margin inflection, according to KeyBanc Capital Markets.

The Eventbrite Analyst: Justin Patterson upgraded the rating for Eventbrite from Sector Weight to Overweight, while keeping the price target unchanged at $14.

The Eventbrite Thesis: The scaling of demand generation products “creates a flywheel” that supports more than 20% of the company’s annual revenue growth through 2025 and “meaningful margin expansion,” Patterson said in the upgrade note.

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“In mid-June, Eventbrite disclosed its Boost and Ad products had reached an $11M annualized revenue run rate, up from $8M in 1Q23 and $6M in 4Q22,” the analyst wrote. As this product scales, it will benefit the company’s ticket volumes, take rate, and margins, he added.

“Given the scarcity of SMID-cap Internet businesses with product catalysts, 20%+ growth, a path to 20% margins, and no major competitive threats, we find risk/reward attractive,” Patterson wrote.

EB Price Action: Shares of Eventbrite had risen by 8.26% to $10.62 at the time of publication Thursday.

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