On Tuesday, Zeta Global Holdings Corp (NYSE: ZETA) saw its price target increased from $15.00 to $19.00 by DA Davidson while the firm maintained a Buy rating for the stock. The adjustment follows Zeta Global's first-quarter 2024 performance, which exhibited significant business momentum, marked by enhanced sales productivity, new client acquisitions, and higher-than-anticipated contributions from the insurance and automotive sectors.
Zeta Global reported a substantial top-line beat, with revenue growth accelerating to 24% compared to 20% in the previous quarter, driven by increased spending from new customers. These positive results are anticipated to continue throughout the year, prompting the company's management to revise both the top and bottom-line guidance for 2024 upward.
DA Davidson's revised price target of $19 is based on a 4x enterprise value to revenue (EV/Revenue) multiple. This valuation reflects Zeta Global's consistent performance and a developing profitability profile. The company's recent achievements and the optimistic outlook for the remainder of the year underpin the decision to reiterate the Buy rating.
InvestingPro Insights
Following the upbeat assessment by DA Davidson, real-time data from InvestingPro provides additional context to Zeta Global's financial health and market performance. With a market capitalization of $2.84 billion, Zeta Global is navigating the competitive landscape with a notable Price / Book multiple of 15.72, which indicates a premium valuation compared to book value. This could be reflective of the market's expectations for future growth, especially considering the revenue growth of 23.31% over the last twelve months as of Q4 2023.
An interesting facet of Zeta Global's financials is its substantial gross profit margin of 62.33%, which suggests that the company is effective at controlling the cost of goods sold and could potentially leverage this efficiency as it scales. However, it's important to note that the company is currently not profitable, with a negative P/E ratio of -10.82 and an adjusted P/E ratio of -15.88. Despite this, analysts are optimistic, predicting profitability this year, which could signal a turning point for the company's financial trajectory.
Investors may also take into consideration the InvestingPro Tips which highlight that Zeta Global's liquid assets exceed its short-term obligations, indicating a solid liquidity position. Additionally, the company operates with a moderate level of debt, which might offer some financial flexibility in its growth ventures. For those looking to delve deeper into Zeta Global's prospects, InvestingPro offers a total of 11 additional tips, providing a more nuanced understanding of the company's potential.
To access these insights and more, readers can take advantage of a special offer using the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription at InvestingPro.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.