Zeta Global shares target raised on growth outlook By Investing.com

The stock price target for Zeta Global Holdings Corp (NYSE:ZETA) was increased to $37.00, up from $35.00, by an analyst at Craig-Hallum. The firm has maintained its Buy rating on the company’s shares. This adjustment follows the Zeta Live event, where the company showcased a series of product launches and insights into marketing trends.

The event emphasized Zeta’s unique market position and its ability to stay ahead of trends, which has been driving consistent market momentum. The analyst highlighted Zeta’s comprehensive platform and its use of advanced artificial intelligence, which leverages unique data assets. These factors are seen as key to Zeta’s potential to establish itself as a leading entity in the Software as a Service (SaaS) sector over the coming years.

Zeta’s new product offerings are expected to expand the company’s total addressable market (TAM). Additionally, ongoing developments with industry partners and the potential to develop new capabilities adjacent to its existing marketing services were cited as reasons for optimism about the company’s future performance.

The analyst noted that SaaS companies with double-digit growth typically trade at 10 times enterprise value to sales (EV/Sales) and 50 times enterprise value to earnings before interest, taxes, depreciation, and amortization (EV/EBITDA).

In comparison, Zeta trades at 6 times EV/Sales and 31 times EV/EBITDA, indicating a potential for multiple expansion. The firm’s reiteration of the Buy rating and the increased price target reflects confidence in Zeta’s strong positioning and growth trajectory.

Zeta Global has been the focus of multiple analysts’ attention. Truist Securities, RBC Capital, DA Davidson, and BofA Securities have all increased their price targets for the company, maintaining a Buy rating. The firms’ upgraded outlooks follow the unveiling of Zeta’s new product offerings and platform enhancements at the annual customer conference, Zeta Live.

The company’s financial performance also has been noteworthy, with a 33% increase in year-over-year revenue for the second quarter of 2024 and raised third-quarter expectations.

Zeta Global has also been active on the product front, launching the Zeta Media Engine in collaboration with Snowflake (NYSE:) and a new intelligent mobile solution. The company has expanded its AI Agents lineup as well, aiming to improve consumer interactions and business outcomes.

Zeta Global has made significant financial moves, including a public offering of 11 million shares of its Class A common stock and securing a $550 million loan facility for debt refinancing. These actions are expected to enhance the company’s financial structure and flexibility, potentially positioning it favorably for mergers and acquisitions.

InvestingPro Insights

Zeta Global Holdings Corp’s recent performance aligns with the analyst’s optimistic outlook. According to InvestingPro data, the company has shown impressive revenue growth of 25.16% over the last twelve months as of Q2 2024, with quarterly revenue growth reaching 32.61% in Q2 2024. This robust growth supports the analyst’s view on Zeta’s market momentum and expanding total addressable market.

InvestingPro Tips highlight that 5 analysts have revised their earnings upwards for the upcoming period, suggesting growing confidence in Zeta’s financial prospects. Additionally, the company has demonstrated a high return over the last year, with a remarkable 271.41% price total return over the past 12 months.

While the analyst report focuses on Zeta’s potential for multiple expansion, it’s worth noting that InvestingPro Tips indicate the company is currently trading at a high revenue valuation multiple. This could suggest that some of the growth expectations are already priced in.

For investors seeking a more comprehensive analysis, InvestingPro offers 7 additional tips for Zeta Global Holdings Corp, providing a deeper understanding of the company’s financial health and market position.

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