Shares of Eventbrite (NYSE:EB) are down more than 25% from their September 2018 IPO price of $23. The cause of the slump: a steep slowdown in revenue growth resulting from integration issues related to a recent acquisition. Yet there's a strong case to make that the event ticketing and planning company has a solid long-term growth story and that the recent slowdown in growth is just a momentary bump in the road. If so, the current stock price could represent an attractive buying opportunity.

Let's take a closer look.

An audience watching a performance on a stage

Image source: Eventbrite.

Slowing revenue growth

Shares of Eventbrite popped as much as 70% on their first day of trading. The company had a strong 2018, delivering revenue growth of 44.7%, and investors felt confident in the long-term growth story.

However, the company poured cold water on those growth prospects with its first earnings report as a public company. Eventbrite reported fourth quarter 2018 sales growth of 21.1% -- less than half the growth rate of prior quarters. That turned into a pattern when the company reported first quarter 2019 earnings showing sales growth of just 9.1% with disappointing forward guidance.

Investors came into Eventbrite's IPO with high hopes of continued strong growth similar to what the company experienced in 2018. But in the short span of just two earnings reports, the company has fallen far short of those expectations, causing many early investors to run for the exits.

Short-term pain from the Ticketfly acquisition

Eventbrite has blamed its disappointing results on issues related to its 2018 Ticketfly acquisition. The acquisition gave Eventbrite access to the 1,800-plus music promoters and venues Ticketfly serves in North America. The deal made strong strategic sense for Eventbrite, which wasn't particularly strong in the music category but wanted to grow into this area.

But instead of allowing Ticketfly to continue operating as a separate arm of the company, Eventbrite decided to shut down the Ticketfly platform and force customers to move over to its own platform. That decision has created an internal scramble, as the company has had to dedicate resources to ensure a smooth transition.

Ticketing is a core function of an events business, and ticketing software platforms are deeply embedded. Engineers have to get involved to help a customer switch over from one software platform to another, and sales reps have to hold customers' hands through the transition process, which includes retraining customers on the new software. Repeat this process for thousands of customers over a one-year period, and it's easy to see why migrating Ticketfly's customers has slowed down the overall company's growth plans.

The Ticketfly acquisition, in fact, has distracted many of Eventbrite's engineers and client sales and services personnel. And it comes at the expense of releasing new features and focusing on winning new clients. To make matters worse, some of Ticketfly's customers have chosen not to stay with Eventbrite.

The Ticketfly platform will be completely shut off by October. Until then, expect more muted growth from Eventbrite.

The longer-term story is still promising

While the Ticketfly acquisition has created some short-term distractions, Eventbrite's longer-term prospects are still encouraging.

While Live Nation is the leading ticketing provider for large events such as Beyonce concerts, Eventbrite is the leader in the mid-market event space, serving smaller venues and independent creators. The mid-market event space is underserved, because more constrained budgets mean venues have a tougher time promoting events and selling tickets. That situation has created an opportunity for Eventbrite to add value to its customers outside of ticketing. For example, the company offers data analytics and planning software to help independent event organizers better market their events. Though that's currently a small portion of Eventbrite's revenue, it could be a major source of growth.

Moreover, through monetizing live event ticketing, Eventbrite is riding a major social trend of consumers who choose to spend more money on experiences rather than on material items. According to the U.S. Bureau of Economic Analysis, spending on experiences has consistently surpassed overall spending growth since 2001. This "experience economy" is especially prominent among millennials and the younger generation.

Over the long term, Eventbrite's exposure to the growing live-events market and its ability to sell more services to existing customers is a recipe for attractive growth.

Looking ahead

Some investors probably feel as if Eventbrite pulled a bait and switch with its IPO by promising high growth and delivering underwhelming results so soon after its market debut. Yet the Ticketfly acquisition ultimately makes sense, given how Eventbrite chose to integrate the company. There have been headaches ever since the acquisition, but they should end when the Ticketfly platform is finally shut down later this year. If things don't pick up after that, then there may be deeper problems at hand.

For now, those interested in the long-term trend of growth in the experience economy would do well to consider Eventbrite as a good way to gain exposure. The company is a leader in ticketing for the mid-market live events space and has promising avenues of growth beyond just ticketing. The current share price is a significant discount from the original IPO price and may prove to be a good buying opportunity if the company can move past the bumps in the road from the Ticketfly acquisition.