On Friday, Piper Sandler adjusted its stance on Eventbrite Inc. (NYSE: NYSE:EB), downgrading the stock from Overweight to Neutral and significantly reducing the price target to $4.00 from the previous $9.00.
The revision follows Eventbrite's announcement of a strategy shift and another revision of estimates. The company has reported an expected stagnation in its 2024 revenue growth, attributing it to a continued decline in paid ticket volumes.
Eventbrite's management has decided to reverse its capacity-based organizer fees to attract creators back to its platform. Despite this strategic pivot being seen as a positive move, the anticipated recovery in paid ticket volume has been delayed further.
According to the company, this metric is anticipated to worsen before any improvement is observed. In response to the revised growth expectations, Eventbrite has also announced a workforce reduction of approximately 11%.
The downgrade reflects concerns over the immediate future of Eventbrite's business, as the company grapples with its growth strategy. While there are potential growth opportunities ahead, Piper Sandler has emphasized the need for Eventbrite to demonstrate consistent momentum in paid ticket volumes over multiple quarters before a more positive outlook can be justified.
The reduction in the price target and stock rating comes as Eventbrite faces the challenge of reinvigorating its business model and regaining growth momentum.
The company's efforts to adjust its strategy and operations, including the headcount reduction, are aimed at aligning with the new revenue projections and market conditions.
Eventbrite's next steps will be closely watched as it strives to stabilize and potentially increase its paid ticket volumes in the face of a challenging business environment.
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