On Tuesday, Zeta Global (NYSE:ZETA) Holdings Corp (NYSE: ZETA) received a new coverage with a Buy rating and a $15.00 stock price target from DA Davidson. The firm's decision is based on an estimated 3.25 times enterprise value to revenue ratio, highlighting Zeta Global's consistent growth, solid enterprise client relationships, and an emerging profitability profile.
DA Davidson sees Zeta Global's current market position as undervalued compared to peers in the sales and marketing sector, attributing this to misunderstandings about the company's revenue model and value proposition. The firm anticipates that upward revisions to the company's 2025 financial projections could act as a catalyst for stock appreciation in the short term.
The coverage further notes that Zeta Global stands to benefit from long-term secular trends and an increasing demand for digital marketing solutions. These factors are expected to support sustained double-digit revenue growth and an improvement in profit margins from current levels.
The analyst from DA Davidson points to Zeta Global's resilience in growth and its strong enterprise relationships as key factors for the positive outlook. The company's trajectory towards profitability is also emphasized as a significant element of the Buy rating.
Zeta Global's stock is anticipated to gain from positive adjustments to its 2025 estimates, which could lead to near-term share value increase. The firm's analysis suggests that the company is well-positioned to capitalize on the ongoing shift towards digital marketing, which is likely to drive its performance in the future.
InvestingPro Insights
Following the coverage by DA Davidson, it is worth noting that Zeta Global Holdings Corp (NYSE: ZETA) has garnered attention from analysts, with six of them revising their earnings upwards for the upcoming period.
This optimism is reflected in the company's strong return over the last three months, with a 28.69% price total return, and a significant price uptick of 32.8% over the last six months, indicating a robust market sentiment.
From a financial standpoint, Zeta Global operates with a moderate level of debt and has liquid assets that exceed short-term obligations, providing a stable financial base. While the company has not been profitable over the last twelve months, analysts predict that Zeta Global will turn profitable this year. This aligns with the positive outlook from DA Davidson, highlighting the company's potential for growth and profitability.
InvestingPro data indicates that Zeta Global has a market capitalization of $2.28 billion and a high Price / Book multiple of 12.67, suggesting a premium valuation by the market. The company's revenue growth has been impressive, with a 23.31% increase in the last twelve months as of Q4 2023.
Moreover, the company does not pay a dividend, which may be attractive to investors looking for companies that reinvest earnings back into growth opportunities.
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