We feel now is a pretty good time to analyse Eventbrite, Inc.'s (NYSE:EB) business as it appears the company may be on the cusp of a considerable accomplishment. Eventbrite, Inc. operates a self-service ticketing and experience technology platform that serves event creators in the United States and internationally. With the latest financial year loss of US$55m and a trailing-twelve-month loss of US$50m, the US$922m market-cap company alleviated its loss by moving closer towards its target of breakeven. The most pressing concern for investors is Eventbrite's path to profitability – when will it breakeven? We've put together a brief outline of industry analyst expectations for the company, its year of breakeven and its implied growth rate.
According to the 5 industry analysts covering Eventbrite, the consensus is that breakeven is near. They anticipate the company to incur a final loss in 2024, before generating positive profits of US$14m in 2025. Therefore, the company is expected to breakeven roughly 2 years from now. What rate will the company have to grow year-on-year in order to breakeven on this date? Using a line of best fit, we calculated an average annual growth rate of 65%, which is rather optimistic! Should the business grow at a slower rate, it will become profitable at a later date than expected.
We're not going to go through company-specific developments for Eventbrite given that this is a high-level summary, though, keep in mind that generally a high forecast growth rate is not unusual for a company that is currently undergoing an investment period.
Before we wrap up, there’s one issue worth mentioning. Eventbrite currently has a debt-to-equity ratio of over 2x. Typically, debt shouldn’t exceed 40% of your equity, and the company has considerably exceeded this. A higher level of debt requires more stringent capital management which increases the risk around investing in the loss-making company.
This article is not intended to be a comprehensive analysis on Eventbrite, so if you are interested in understanding the company at a deeper level, take a look at Eventbrite's company page on Simply Wall St. We've also put together a list of essential factors you should further research:
Valuation: What is Eventbrite worth today? Has the future growth potential already been factored into the price? The intrinsic value infographic in our free research report helps visualize whether Eventbrite is currently mispriced by the market.
Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on Eventbrite’s board and the CEO’s background.
Other High-Performing Stocks: Are there other stocks that provide better prospects with proven track records? Explore our free list of these great stocks here.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
Join A Paid User Research Session
You’ll receive a US$30 Amazon Gift card for 1 hour of your time while helping us build better investing tools for the individual investors like yourself. Sign up here