On Tuesday, Oppenheimer has increased the price target for Zeta Global Holdings Corp (NYSE:ZETA) to $42, up from the previous target of $33, while continuing to recommend the stock as Outperform. The adjustment follows Zeta Global's recent report of robust quarterly growth, highlighting significant increases in revenue, EBITDA, and average revenue per user (ARPU) in the third quarter.
The firm's management has provided a forecast of 17% organic revenue growth for 2025, excluding contributions from LiveIntent. This projection represents a notable slowdown from this year's low 30% organic growth rate. However, the new guidance is perceived as conservative by Oppenheimer, potentially lowering the risk for investors and setting up the company for a possible pattern of exceeding expectations and upward revisions in the future.
Despite the seemingly cautious 2025 revenue outlook, which may initially appear challenging, the guidance still positions Zeta Global as a company with a low 20% organic growth rate after adjusting for a four-to-five point reduction due to decreased political advertising spending. Oppenheimer acknowledges the company's consistent operational performance and considers the acquisition of LiveIntent as a strategic move that enhances Zeta Global's narrative.
The analyst from Oppenheimer concludes by reiterating the Outperform rating and emphasizing the raised price target to $42 from $33. This reflects a positive stance on Zeta Global's ability to continue its growth trajectory and possibly outperform market expectations.
In other recent news, Zeta Global Holdings Corp has been experiencing robust growth, with its Q3 2024 earnings showing a 42% year-over-year increase in revenue to $268 million and a 59% rise in adjusted EBITDA to $54 million.
These positive results have led to an increased full-year revenue outlook for 2024, set at $986 million, marking a 35% growth from the previous year. Analyst firms Needham, RBC Capital, Barclays (LON:BARC), and DA Davidson have acknowledged this strong performance, raising their price targets for Zeta Global.
The company's growth has been driven by strategic acquisitions, key contracts, partnerships, and an increased focus on AI-driven marketing solutions. Zeta Global's management has expressed confidence in retaining more advocacy revenue in FY25, based on the company's performance compared to previous election cycles.
Analysts from the aforementioned firms have shown optimism about Zeta Global's future performance and market position.
InvestingPro Insights
Zeta Global Holdings Corp's recent performance aligns with several InvestingPro metrics and tips, providing additional context to Oppenheimer's bullish outlook. The company's stock has shown remarkable strength, with a 345.87% return over the past year and a 132.53% return in the last six months. This impressive performance is reflected in the InvestingPro Tip noting a "significant return over the last week" and "high return over the last year."
The company's revenue growth remains strong, with a 32.61% increase in the most recent quarter, supporting Oppenheimer's observation of robust quarterly growth. However, investors should note that Zeta is currently trading at a high revenue valuation multiple, which could be a consideration given the projected slowdown in organic growth for 2025.
Despite not being profitable over the last twelve months, with an adjusted operating income of -$131.48 million, InvestingPro Tips indicate that analysts predict the company will be profitable this year. This aligns with Oppenheimer's view that the conservative 2025 guidance may set the stage for potential upward revisions.
For investors seeking a more comprehensive analysis, InvestingPro offers 16 additional tips for Zeta Global Holdings Corp, providing a deeper understanding of the company's financial health and market position.
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