On Friday, B.Riley increased the price target for Zeta Global Holdings Corp (NYSE:ZETA) shares to $24.00, up from the previous $18.50, while maintaining a Buy rating on the stock.
The firm anticipates that Zeta Global's upcoming second-quarter results, set to be released after the market closes on July 31, 2024, will likely meet or potentially exceed expectations. This optimism is based on the company's consistent performance and positive guidance reaffirmed in a recent regulatory filing.
The analyst predicts that the company's second-quarter performance will be supported by sustained strength in its core business and a recovery in key industry verticals such as automotive and insurance.
Additionally, growth is expected from Zeta's agency channel, which has partnerships with five major holding companies, and from new revenue opportunities related to its intelligent agent and mobile offerings.
Zeta Global, which has seen its shares increase by approximately 130% year-to-date, is expected to continue its upward trajectory. The revised price target is derived from an increased enterprise value to sales multiple of approximately 5 times for the fiscal year 2025, up from the previous 4 times. This reflects an enterprise value to adjusted EBITDA multiple of around 25 times for the same period, an increase from the earlier estimate of 20 times.
The company's robust first-party consumer data set and artificial intelligence-powered marketing automation platform are seen as significant advantages. These assets are expected to help Zeta Global continue to capture market share during a period when many companies are looking to upgrade their marketing cloud technologies. The firm's analysis suggests that Zeta Global is well-positioned for durable growth and further financial success in the following years.
InvestingPro Insights
As Zeta Global Holdings Corp (NYSE:ZETA) prepares to release its second-quarter results, the company's stock movement and financial metrics provide a broader picture of its market position. According to recent InvestingPro data, Zeta has a market capitalization of $4.44 billion and has experienced a significant revenue growth of 23.7% in Q1 2023. Furthermore, the company's impressive one-week price total return of 14.84% aligns with the optimistic outlook presented by B.Riley.
InvestingPro Tips highlight that analysts have revised their earnings upwards for the upcoming period, which may further support the positive sentiment around Zeta's stock. Additionally, the company's strong performance is reflected in the substantial returns over the last week, month, and three months, suggesting a robust short-term trend. For investors looking for a deeper analysis or additional insights, InvestingPro offers more tips on Zeta Global, which can be accessed with an exclusive offer using the coupon code PRONEWS24 for up to 10% off a yearly Pro and a yearly or biyearly Pro+ subscription.
It's worth noting that despite the stock being in overbought territory according to the RSI, Zeta's liquid assets exceed short-term obligations, and the company operates with a moderate level of debt. These factors could contribute to the resilience of the stock in the near term. For those interested, there are 14 additional InvestingPro Tips available, providing a comprehensive outlook on Zeta Global's financial health and market potential.
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