The latest analyst coverage could presage a bad day for Eventbrite, Inc. (NYSE:EB), with the analysts making across-the-board cuts to their statutory estimates that might leave shareholders a little shell-shocked. Both revenue and earnings per share (EPS) forecasts went under the knife, suggesting the analysts have soured majorly on the business.
Following the downgrade, the consensus from seven analysts covering Eventbrite is for revenues of US$322m in 2024, implying a small 5.3% decline in sales compared to the last 12 months. Per-share losses are expected to explode, reaching US$0.24 per share. However, before this estimates update, the consensus had been expecting revenues of US$365m and US$0.14 per share in losses. So there's been quite a change-up of views after the recent consensus updates, with the analysts making a serious cut to their revenue forecasts while also expecting losses per share to increase.
The consensus price target fell 39% to US$5.30, with the analysts clearly concerned about the company following the weaker revenue and earnings outlook.
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 forecasts are more or less bullish relative to other companies in the industry. These estimates imply that sales are expected to slow, with a forecast annualised revenue decline of 10% by the end of 2024. This indicates a significant reduction from annual growth of 6.3% over the last five years. By contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to see their revenue grow 8.8% annually for the foreseeable future. It's pretty clear that Eventbrite's revenues are expected to perform substantially worse than the wider industry.
The Bottom Line
The most important thing to note from this downgrade is that the consensus increased its forecast losses this year, suggesting all may not be well at Eventbrite. Regrettably, they also downgraded their revenue estimates, and the latest forecasts imply the business will grow sales slower than the wider market. After such a stark change in sentiment from analysts, we'd understand if readers now felt a bit wary of Eventbrite.
Still, the long-term prospects of the business are much more relevant than next year's earnings. We have estimates - from multiple Eventbrite analysts - going out to 2026, and you can see them free on our platform here.
Another way to search for interesting companies that could be reaching an inflection point is to track whether management are buying or selling, with our free list of growing companies backed by insiders.
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