On Thursday, RBC Capital Markets adjusted its outlook on shares of Zeta Global Holdings Corp (NYSE:ZETA), a data-driven marketing technology company, by increasing the price target from $23.00 to $29.00. The firm sustained its Outperform rating on the stock.
The revision comes after Zeta Global reported a robust financial quarter, marked by significant growth in Average Revenue Per User (ARPU). This increase was attributed to successful up-selling and cross-selling initiatives, as well as brand expansions among agency customers.
The company's management highlighted that its revenue gains were a direct result of the traction its AI solutions gained across all three of its product lines, each of which grew by over 25%. This milestone is the first of its kind for the company's product suite.
In light of these developments, RBC Capital has raised its target price for Zeta Global's shares, also increasing the multiple to 6.0x CY/25E EV/S from the previous 5.0x. This adjustment reflects the firm's confidence in the company's revenue trajectory for the second half of 2024, bolstered by the ARPU inflection.
The analyst from RBC Capital underscored the company's strong quarter and the impact of AI solutions on its product lines, suggesting a promising revenue ramp for the latter part of the year.
In other recent news, Zeta Global Holdings Corp has been the subject of several significant developments. The company reported surpassing revenue expectations in its second quarter, leading to a 3% increase in its full-year 2024 projections.
This news prompted Morgan Stanley to adjust its stance on Zeta Global, downgrading the stock from Overweight to Equalweight, despite raising the price target to $30.00. Meanwhile, RBC Capital and B.Riley revised their price targets for Zeta Global to $23 and $24 respectively, anticipating positive results in the upcoming earnings report.
Truist Securities initiated coverage on Zeta Global with a Buy rating and a $23.00 price target, highlighting the company's potential in the marketing technology sector. In addition, Zeta Global has announced a partnership with RallyPoint to enhance support for the military and veteran community, leveraging Zeta's artificial intelligence capabilities to improve engagement and communication channels.
Furthermore, Zeta Global launched the Zeta Economic Index (ZEI), a new measure of the US economy's status, utilizing the company's proprietary data and Generative AI to analyze consumer behavior and provide real-time snapshots of economic trends.
InvestingPro Insights
Following the upbeat assessment by RBC Capital Markets, current metrics and InvestingPro Tips offer additional insights into Zeta Global Holdings Corp's financial landscape. Notably, the company's market capitalization stands at approximately $4690M, showcasing its significant presence in the marketing technology sector. Despite a negative P/E ratio of -20.75, reflecting its current lack of profitability, analysts have revised their earnings upwards for the upcoming period, signaling potential for future profit generation.
The firm's strong performance is further underscored by a robust revenue growth of 23.1% over the last twelve months as of Q1 2024, indicating a healthy expansion trajectory. Moreover, Zeta Global's liquid assets surpass its short-term obligations, providing financial flexibility and stability. With a high Price / Book multiple of 24.46, the company is trading near its 52-week high, reflecting investor confidence and a strong market valuation.
Investors looking for more comprehensive analysis and additional InvestingPro Tips can find them on the InvestingPro platform, where 12 more tips related to Zeta Global are available. These tips could provide deeper insights for those considering an investment in the company's evolving narrative.
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