On Monday, BofA Securities updated their outlook on Zeta Global Holdings Corp (NYSE: ZETA), a marketing and advertising technology company. The firm raised its price target to $20.00 from the previous $18.00 while maintaining a Buy rating on the stock.
Zeta Global has emerged as a top performer within Bank of America's small and mid-cap (SMID) software sector, with an impressive year-to-date increase of 75%. This accomplishment is particularly remarkable given the sector's overall 17% decline. It is expected that Zeta Global will continue to outperform its peers.
According to the analyst from BofA Securities, Zeta Global is considered an underappreciated entity within its market, which currently has a total addressable market (TAM) of approximately $10.6 billion. This assessment was initially detailed in a report released on July 6, 2021. The company's first-party data offering is seen as challenging for competitors to replicate, which could provide Zeta with a competitive edge.
The firm's artificial intelligence capabilities were highlighted as a potential catalyst for future growth. The analyst expressed confidence that Zeta Global's AI-driven offerings could become significant drivers of the company's continued expansion. This expectation is supported by the company's consistent performance, which has often resulted in financial results that surpass projections.
The revised price objective of $20.00 is based on a 4.4 times enterprise value to calendar year 2025 estimated revenue multiple. This valuation is a step up from the previous 3.9 times multiple and stands above the 3.5 times average multiple of Zeta's small-cap software peers. The premium is justified by Zeta's strong execution trend since its initial public offering (IPO).
BofA Securities reaffirmed its optimistic stance on Zeta Global, citing the company's promising trajectory and the increasing confidence in its execution capabilities. The new price target reflects an anticipation of continued outperformance by Zeta in its market segment.
In other recent news, Zeta Global has made significant strides in its corporate governance and financial prospects. The AI-powered marketing solutions company recently welcomed Imran Khan, a notable figure in the technology investment sector, to its Board of Directors. Khan's experience, spanning roles at Snap Inc (NYSE:SNAP)., Credit Suisse, and JPMorgan Chase (NYSE:JPM), is expected to provide valuable strategic insight to Zeta Global.
Several investment firms have also revised their price targets for Zeta Global. Needham upgraded its share target from $18.00 to $20.00, citing strong demand and ongoing innovation at the company. Roth/MKM raised its target to $33 from $21, while Craig-Hallum increased its target from $15.00 to $22.00. Barclays also upgraded its stock price target for Zeta to $18.00 from the previous $15.00.
Furthermore, analysts have projected robust financial health for Zeta Global, with estimated revenue for 2024 at $897.1 million and an EBITDA estimate of $170.2 million. These projections, coupled with the company's consistent financial performance, have led to positive sentiments from firms like Roth Capital Partners, D.A. Davidson & Co., Barclays Capital Inc., Craig-Hallum, and Oppenheimer, all issuing a "Buy" rating for Zeta Global.
The recent developments indicate a promising trajectory for Zeta Global, with the company poised for growth and value appreciation in the digital marketing sector.
InvestingPro Insights
With the spotlight on Zeta Global's positive outlook from BofA Securities, recent data from InvestingPro echoes some of the optimism surrounding the company. Zeta's year-to-date price total return stands at an impressive 77.1%, significantly outperforming the sector. This is complemented by a strong return over the last three months, which saw a 41.36% increase, and an even more remarkable six-month price total return of 74.33%. These figures highlight the company's robust growth in the short term, aligning with the bullish sentiment expressed by analysts.
Moreover, Zeta Global's financial health is underlined by InvestingPro Tips, which note that the company's liquid assets surpass its short-term obligations, and it operates with a moderate level of debt. These indicators suggest a solid financial foundation, which may reassure investors of the company's ability to sustain its growth trajectory. Additionally, analysts predict that Zeta will turn profitable this year, a milestone that could further bolster investor confidence.
For those interested in a deeper dive into Zeta Global's financials and future prospects, there are 9 additional InvestingPro Tips available, providing a comprehensive analysis for informed investment decisions. To explore these insights, visit InvestingPro and consider using the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription.
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