On Thursday, Canaccord Genuity maintained a positive stance on Zeta Global Holdings Corp (NYSE:ZETA), raising the price target to $28 from $20 while reiterating a Buy rating on the stock. The firm's first-party data asset is recognized for enabling significant marketing personalization at scale, which is a key factor in achieving a high return on investment (ROI).
Additionally, Zeta's integration of data, Customer Data Platform (CDP), and activation channels positions it as a consolidated solution for Chief Information Officers (CIOs) and Chief Marketing Officers (CMOs).
The analyst highlighted that CMOs are actively seeking practical applications for Generative AI (GenAI), and Zeta's offerings make these applications more tangible, which supports the sales process in the current challenging market environment.
The recent expansion in the company's multiple is seen as a sign that the stock's value is starting to be recognized. Despite this expansion, Zeta's stock is still considered slightly undervalued, trading at 4.6 times Enterprise Value to Revenue (EV/R) based on the calendar year 2025 estimates, especially when compared to other companies that meet or exceed the Rule of 40+ metrics, which measure growth plus profitability.
The upward revision in Zeta Global's price target reflects the anticipation that the company will continue to deliver positive news over the next few quarters. The firm's comprehensive solutions and the tangible benefits they offer to CMOs are expected to sustain the company's growth trajectory and justify the ongoing investment recommendation.
In other recent news, Zeta Global Holdings Corp has been receiving considerable attention from various analyst firms following a strong second quarter performance.
Needham and RBC Capital Markets have raised their price targets for Zeta Global to $28 and $29 respectively, and Morgan Stanley adjusted its stance, downgrading the stock from Overweight to Equalweight, but raised the price target to $30.00.
B.Riley also increased its price target for Zeta Global to $24.00, citing strong growth prospects, while Truist Securities initiated coverage on Zeta Global with a Buy rating and a $23.00 price target.
The company's recent success is attributed to its agency channel's effectiveness in attracting new brands, which led to a significant increase in scaled customer Average Revenue Per User (ARPU).
Zeta Global also continued its growth trajectory by securing net new business, adding eight new logos during the quarter, and raised its full-year 2024 guidance.
In addition to financial developments, Zeta Global has formed a partnership with RallyPoint to enhance support for the military and veteran community, leveraging its artificial intelligence capabilities.
The company also launched the Zeta Economic Index, a new measure of the US economy's status, utilizing its proprietary data and Generative AI.
InvestingPro Insights
InvestingPro data provides a deeper look into Zeta Global Holdings Corp's financials, revealing a market capitalization of $4.69 billion and a significant revenue growth of 23.1% over the last twelve months as of Q1 2024. Despite the company not being profitable in the last twelve months, with a P/E ratio of -20.75, analysts have revised their earnings upwards for the upcoming period, indicating a positive outlook. Zeta's stock is trading near its 52-week high, with a price 98.08% of this peak, reflecting strong investor confidence bolstered by a 139.33% return over the last year.
Two InvestingPro Tips that can further inform investors are: Zeta's liquid assets exceed its short-term obligations, providing a cushion for operational needs, and the company operates with a moderate level of debt, suggesting a balanced approach to financing. For those seeking more comprehensive analysis, InvestingPro offers additional insights with a total of 13 tips available for Zeta Global, which can be found at https://www.investing.com/pro/ZETA.
These metrics and tips highlight the potential for Zeta Global as a solid investment option, especially considering the company's strong revenue growth and the analysts' predictions of profitability this year. With Canaccord Genuity's positive outlook and the data-backed insights from InvestingPro, Zeta Global stands out as a company worth watching in the tech sector.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.