On Tuesday, Zeta Global Holdings Corp (NYSE: ZETA) saw its price target increased by a Craig-Hallum analyst to $45.00, up from the previous target of $37.00. The analyst has also reaffirmed a Buy rating on the company's shares. The revision comes amid a period of significant growth for Zeta Global, with the company showcasing accelerated Average Revenue Per User (ARPU) growth over the past three quarters, jumping from 11% to 33%.
The analyst highlights the positive impact of the recent acquisition of LiveIntent and the potential for increased monetization through the cross-selling capabilities of the combined sales team. Zeta Global's consistent performance, marked by 13 consecutive quarters of beating and raising expectations, has been noted as a strong indicator of the company's momentum.
The analyst is optimistic about Zeta Global's future growth, pointing to several opportunities. These include the expansion of the sales force with LiveIntent's cross-selling integration, the evolution of the publisher cloud, the penetration of the agency opportunity, and the continued momentum in the artificial intelligence revolution.
Zeta Global's strategy to enhance growth involves increasing the penetration of their existing customer base, which represents over $100 billion in total marketing spend. The company has made significant strides with some customers, who are now allocating 5-10% of their marketing budgets to Zeta's services. The goal is to replicate this success across more customers in the chain.
The analyst's commentary underscores the company's strong track record and the belief in Zeta's potential to leverage its customer base for further growth. The anticipation of these developments has contributed to the positive outlook and the raised price target for Zeta Global's stock.
In other recent news, Zeta Global's Q3 2024 earnings report revealed a 42% year-over-year increase in revenue to $268 million and a 59% rise in adjusted EBITDA to $54 million. This strong performance led to an upward revision of its full-year 2024 revenue outlook to $986 million, indicating a 35% growth from the previous year. The company's growth has been attributed to strategic acquisitions, key contracts, partnerships, and an increased focus on AI-driven marketing solutions.
Several analyst firms, including Truist Securities, Oppenheimer, Needham, RBC Capital, Barclays (LON:BARC), and DA Davidson, have acknowledged this growth by raising their price targets for Zeta Global. Notably, Truist Securities increased its price target to $42.00, while Oppenheimer and Needham set their targets at $42 and $43 respectively. All the firms maintained a positive rating on the stock.
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 growth, with a 32.61% increase in quarterly revenue as of Q2 2024. This robust growth is reflected in the stock's performance, with a remarkable 345.87% price return over the past year.
InvestingPro Tips highlight that Zeta operates with a moderate level of debt and has liquid assets exceeding short-term obligations, which supports the company's financial stability as it pursues growth opportunities. The strong return over the last month and three months, as noted in the InvestingPro Tips, corroborates the analyst's positive sentiment and the raised price target.
While Zeta is currently trading at a high revenue valuation multiple and is not profitable over the last twelve months, analysts predict the company will be profitable this year. This projection aligns with the analyst's expectations of continued growth and improved monetization through cross-selling initiatives.
For investors seeking a deeper understanding of Zeta's potential, InvestingPro offers 16 additional tips, providing a comprehensive analysis of the company's financial health and market position.
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