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On Friday, B.Riley analysts downgraded Eventbrite Inc. (NYSE:EB) stock from Buy to Neutral and reduced the price target to $3.50 from the previous $5.00. According to InvestingPro data, the stock currently trades at $3.10, having declined over 46% in the past year, with analyst targets ranging from $4.00 to $7.00. The downgrade follows Eventbrite’s fourth-quarter results, which surpassed the low expectations set by Wall Street. However, the company’s outlook for 2025 fell short of the consensus, primarily due to the anticipated continued impact from the loss of revenue following the reintroduction of free listings. Despite challenges, the company maintains a strong balance sheet with more cash than debt, and a healthy current ratio of 1.56.
Eventbrite’s key performance indicators (KPIs) indicate that the return of the free listing tier and various growth initiatives are beginning to positively influence the number of paid creators and the volume of paid tickets. Nevertheless, this progress is not as rapid as B.Riley had initially expected. As a result, the forecast for 2025 is not meeting the expectations previously set by the analysts.
The analysts noted that while they anticipate the launch of a redesigned mobile app in 2025 and a broader adoption of Eventbrite Ads by creators to further support the company’s recovery, they have decided to adopt a more cautious stance. The uncertainty surrounding the financial impact of these initiatives and their timing has contributed to the decision to downgrade the stock rating.
B.Riley justified the new price target by referring to the valuation of Eventbrite at 7.5 times its 2025 enterprise value to adjusted EBITDA. This valuation led the analysts to conclude that the risk/reward profile is now balanced, prompting the reduction in the price target alongside the rating change. The firm’s analysts look forward to seeing how Eventbrite’s strategies will unfold but have chosen to remain neutral until there is more clarity on the outcomes. InvestingPro analysis suggests the stock is currently undervalued, with additional insights available in the comprehensive Pro Research Report, which provides detailed analysis of Eventbrite’s financial health, valuation metrics, and growth prospects.
In other recent news, Eventbrite Inc. reported its financial results for the fourth quarter of 2024, revealing a significant miss on earnings per share (EPS). The company posted an EPS of -$0.09, falling short of analysts’ forecast of -$0.05. Despite this, Eventbrite’s revenue slightly exceeded expectations, reaching $76.5 million compared to the anticipated $75.67 million. The company continues to focus on strategic adjustments for long-term growth, including the elimination of organizer listing fees to drive expansion. Eventbrite’s total ticketing volume showed a modest recovery with a 2% year-over-year increase. Analysts from B. Riley and Morgan Stanley (NYSE:MS) have shown interest in Eventbrite’s partnership with TikTok and efforts to win back creators, emphasizing the importance of these initiatives for future growth. Furthermore, Eventbrite provided guidance for Q1 2025, projecting revenue between $71 million and $74 million, and anticipates full-year revenue for 2025 to range from $295 million to $310 million. The company expects mid-single-digit EBITDA margins and aims for paid ticket volume growth in the second half of 2025.
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