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KeyBanc maintains Overweight on Zeta stock, positive on long-term revenue guidance

EditorAhmed Abdulazez Abdulkadir
Published 12/11/2024, 17:34
ZETA
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On Tuesday, Zeta Global Holdings Corp (NYSE:ZETA) maintained its Overweight rating and $40.00 price target according to a KeyBanc analyst. The analyst's recent remarks highlighted the company's substantial election-related revenue, which surpassed expectations in the quarter and forecasts for Q4. While revenues excluding political contributions were described as more muted, the overall assessment remained positive.

The commentary from Zeta Global's management regarding the outlook for 2025 was also seen as encouraging, with the company expressing comfort with the consensus estimates for ex-political revenue growth of around 21%. The management aimed to set conservative expectations, instilling confidence in the company's future performance.

The analyst emphasized that the recent results are part of a consistent trend of strong performance from Zeta Global, which predates KeyBanc's coverage initiation. There was no indication of a need to change the investment thesis based on the latest financial disclosures. The reiteration of the Overweight rating and the $40 price target reflects continued confidence in the company's trajectory.

Zeta Global's financial results have indicated a significant contribution from election-related activities, which have exceeded what was anticipated for the quarter and the upcoming fourth quarter. Despite the less impressive results from non-election related revenues, the company's forward-looking statements regarding revenue growth have been positively received.

In summary, the KeyBanc analyst stands by the Overweight rating and $40 price target for Zeta Global, citing a history of good results and a positive outlook for the company's growth, particularly in terms of revenue excluding political contributions. The analyst's comments suggest that Zeta Global is on a path to continue its strong performance into the future.

In other recent news, Zeta Global Holdings Corp has experienced significant growth, with a 42% year-over-year increase in Q3 2024 revenue to $268 million and a 59% rise in adjusted EBITDA to $54 million. This strong performance led to an upward revision of its full-year 2024 revenue outlook to $986 million, indicating a 35% growth from the previous year.

Analysts from Craig-Hallum, Truist Securities, Oppenheimer, and Needham have acknowledged this growth by raising their price targets for Zeta Global. The company's growth has been attributed to strategic acquisitions, key contracts, partnerships, and an increased focus on AI-driven marketing solutions.

Furthermore, the recent acquisition of LiveIntent and the expansion of the sales force are expected to contribute to Zeta Global's future growth. The company's strategy also involves increasing the penetration of their existing customer base, which represents over $100 billion in total marketing spend. While Zeta Global's management has provided a forecast of 17% organic revenue growth for 2025, analysts from Oppenheimer deem this outlook as conservative and expect the company to continue its growth trajectory.

InvestingPro Insights

Zeta Global Holdings Corp (NYSE:ZETA) has been experiencing significant momentum, as evidenced by recent InvestingPro data. The company's stock has shown remarkable performance, with a 345.87% total return over the past year and an impressive 316.55% year-to-date return. This aligns with the KeyBanc analyst's positive outlook and Overweight rating.

InvestingPro Tips highlight that analysts anticipate sales growth in the current year, which supports the company's optimistic stance on future revenue growth. Additionally, the tip indicating that analysts predict the company will be profitable this year corroborates management's comfort with consensus estimates for ex-political revenue growth.

While the company's revenue growth is strong at 25.16% for the last twelve months, it's worth noting that Zeta is currently trading at a high revenue valuation multiple. This suggests investors are pricing in significant future growth, in line with the analyst's maintained $40 price target.

For investors seeking a deeper understanding of Zeta Global's potential, InvestingPro offers 13 additional tips that could provide valuable insights into the company's financial health and market position.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.

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