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On Friday, KeyBanc analysts maintained their Sector Weight rating for Zeta Global Holdings Corp (NYSE: ZETA), indicating a neutral stance on the company’s stock. The assessment follows Zeta Global’s recent earnings call, where CEO David Steinberg hinted at potential acquisition interest in the company. The marketing technology firm, currently valued at $3.2 billion, has attracted attention from potential buyers.
Zeta Global, a data-driven marketing technology company, has been performing well according to traditional metrics. In the latest earnings report, the company showcased impressive 38% revenue growth, maintained a healthy 60% gross margin, and demonstrated strong cash conversion. According to InvestingPro data, the company maintains robust liquidity with a current ratio of 3.09, indicating strong short-term financial health. The company raised its guidance while accounting for potential market slowdowns which it hasn’t experienced, and has been actively repurchasing its shares.
Despite these positive indicators, Zeta Global’s stock fell by 4.7% following the earnings announcement, contributing to a significant 51.6% decline over the past six months. InvestingPro analysis suggests the stock is currently trading below its Fair Value, presenting a potential opportunity for value investors. This decline occurred even after Steinberg’s revelation during the earnings call that he has received inquiries from parties interested in purchasing Zeta Global, not just its software.
KeyBanc’s analysts had previously downgraded Zeta Global’s stock in the aftermath of a short report released last fall. The downgrade was partly due to a perceived discrepancy between the company’s fundamental performance and its stock market valuation. The recent earnings report and subsequent stock price movement seem to have reinforced KeyBanc’s decision to maintain a neutral rating on the stock.
The mention of potential acquisition interest, however, did raise eyebrows and may be seen as a factor that could influence the stock’s future performance. For now, KeyBanc remains satisfied with a neutral view, citing the market’s apparent lack of response to Zeta Global’s strong fundamental performance.
In other recent news, Zeta Global Holdings Corp reported its Q1 2025 financial results, showcasing a mixed performance. The company achieved a revenue of $264 million, surpassing the forecasted $254.43 million, marking a 36% increase year-over-year. However, the earnings per share (EPS) fell short, recording -0.1 against the projected 0.12. This discrepancy in EPS reflects challenges in profitability despite strong revenue growth. Zeta’s adjusted EBITDA also showed a significant increase, reaching $47 million, up 53% year-over-year. The company continues to benefit from its AI-driven solutions, which have contributed to revenue growth and customer adoption. Analysts from Truist Securities noted the company’s consistent performance and its strategic focus on expanding use cases and customer engagement. Looking forward, Zeta projects a revenue midpoint of $1.242 billion for 2025, representing a 23% growth, with adjusted EBITDA expected to grow by 34% to $258.5 million.
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