RBC Capital has adjusted its outlook on Zeta Global (ZETA, Financial), reducing the price target from $30 to $25, while maintaining an Outperform rating. This decision follows the company's strong performance at the beginning of the year, where both revenue and adjusted EBITDA exceeded expectations. Despite these positive results, the price target adjustment reflects concerns over peer multiple compression, as stated by an analyst in a research note.
Wall Street Analysts Forecast
Based on the one-year price targets offered by 12 analysts, the average target price for Zeta Global Holdings Corp (ZETA, Financial) is $30.17 with a high estimate of $44.00 and a low estimate of $15.00. The average target implies an upside of 123.62% from the current price of $13.49. More detailed estimate data can be found on the Zeta Global Holdings Corp (ZETA) Forecast page.
Based on the consensus recommendation from 14 brokerage firms, Zeta Global Holdings Corp's (ZETA, Financial) average brokerage recommendation is currently 2.0, indicating "Outperform" status. The rating scale ranges from 1 to 5, where 1 signifies Strong Buy, and 5 denotes Sell.
Based on GuruFocus estimates, the estimated GF Value for Zeta Global Holdings Corp (ZETA, Financial) in one year is $14.02, suggesting a upside of 3.93% from the current price of $13.49. GF Value is GuruFocus' estimate of the fair value that the stock should be traded at. It is calculated based on the historical multiples the stock has traded at previously, as well as past business growth and the future estimates of the business' performance. More detailed data can be found on the Zeta Global Holdings Corp (ZETA) Summary page.
ZETA Key Business Developments
Release Date: May 01, 2025
- Revenue: $264 million, up 6% year over year.
- Adjusted EBITDA: $47 million, up 53% year over year.
- Net Cash Provided by Operating Activities: $34.8 million, up 41% year over year.
- Free Cash Flow: $28.2 million, up 87% year over year, with a margin of 10.7%.
- GAAP Net Loss: $22 million, improved from $40 million in the first quarter of 2024.
- Scaled Customer Count: 548, up 19% year over year.
- Superscale Customer Count: 159, up 10% year over year.
- Scaled Customer Quarterly ARPU: $467,000, increased 12% year over year.
- Superscale Customer Quarterly ARPU: $1.4 million, increased 23% year over year.
- Adjusted EBITDA Margin: 17.7%, 200 basis points higher year over year.
- Share Repurchase: 1.6 million shares for $25 million during the quarter.
- 2025 Revenue Guidance: $1.242 billion at the midpoint, representing 23% reported growth.
- 2025 Adjusted EBITDA Guidance: $258.5 million, representing a 34% year-over-year increase.
- 2025 Free Cash Flow Guidance: $131.5 million, representing 43% year-over-year growth.
- Stock-Based Compensation Expense: Expected to be $190 million for 2025.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Zeta Global Holdings Corp (ZETA, Financial) reported its 15th consecutive quarter of beating and raising guidance, showcasing strong performance and market share gains.
- The company achieved a 6% year-over-year revenue growth to $264 million and a 53% increase in adjusted EBITDA to $47 million, both exceeding guidance.
- Zeta's AI-driven platform continues to deliver measurable ROI, with significant customer success stories in telecommunications, insurance, and finance sectors.
- The launch of AI Agent Studios and Agentic Workflows is expected to enhance marketer productivity and drive further adoption of Zeta's AI capabilities.
- Zeta's agency business is experiencing momentum, with new agreements and increased platform adoption among independent agencies and large holding companies.
Negative Points
- Despite strong performance, Zeta Global Holdings Corp (ZETA) is adopting a conservative approach to guidance due to macroeconomic uncertainties.
- The company faces potential challenges from macroeconomic conditions, which could impact customer spending and growth projections.
- Zeta's ARPU growth is impacted by the integration of LiveIntent, which has smaller average customer sizes.
- The company is experiencing headwinds in working capital due to growth with agency clients, affecting free cash flow conversion.
- Zeta's exposure to macroeconomic risks, such as potential slowdowns in key verticals like automotive and retail, remains a concern despite current resilience.
