Why Eventbrite Stock Fell 37.4% in May

What happened

Shares of event-ticketing company Eventbrite (NYSE: EB) slumped 37.4% in May, according to data from S&P Global Market Intelligence, after the company announced disappointing first-quarter 2019 results.

Shares plummeted more than 27% on May 2 alone after Eventbrite's quarterly report hit the wires. In it, the company confirmed that while revenue climbed 9.1% year over year, to $81.3 million, it lost $0.13 per share during the quarter. Analysts on average were looking for a narrower $0.08 loss on revenue closer to $83 million.

So what

Eventbrite's underlying business trends seemed encouraging at first glance. Self-sign-on gross ticket fees (GTF) climbed 21.2%, while paid tickets rose 14.5% to roughly 27 million. The company also touted progress integrating and migrating the Ticketfly platform, which it acquired from Pandora for around $200 million in late 2017.

At the same time, Eventbrite warned it will "continue to face hurdles that will inhibit revenue growth, including the focus on migration efforts and the churn from venues that decide not to migrate to our platform."

Now what

Looking ahead, Eventbrite also told investors to expect second-quarter revenue of $74 million to $78 million -- again, far below the roughly $82 million most analysts were modeling -- which should translate to adjusted EBITDA in the range of negative $4 million to roughly breakeven.

Bullish investors might view this steep plunge as an opportunity to pick up the stock at its lowest level since Eventbrite's IPO at $23 per share last September. But until it can prove it has what it takes to complete the Ticketfly migration, and translate that underlying business momentum to improved revenue growth -- and, ultimately, sustained profitability down the road -- I suspect Eventbrite shares will remain under pressure.

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Steve Symington has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.