Zeta Global Holdings Corp, a marketing technology company known for its AI-powered marketing solutions, reported a significant upturn in its stock performance in 2024, registering a 125.83% increase year-to-date. This growth considerably outpaced the NYSE Composite index, which saw a rise of only 14.98%. As of Thursday's market close, Zeta's shares reached $18.97, marking an increase of 1.23% on the day.

In contrast, Zeta's peers have faced considerable setbacks, with Freshworks Inc. experiencing a decline of 27.26% and Temenos ADR down 21.52% during the same timeframe. Despite Zeta's performance, technical analysis indicates a short-term bearish trend. The stock has closed below its eight and 50-day moving averages, which stand at $19.52 and $21.69 respectively, and also its 200-day moving average of $24.42, suggesting a potential downward trajectory. The company’s relative strength index is at 38.38, indicating that the stock is moderately oversold but remains in a neutral position.

Zeta Global is poised to further enhance its market position following the merger between Omnicom and Interpublic, two major players in the marketing landscape. David A. Steinberg, co-founder, chairman, and CEO of Zeta, expressed optimism about the merger, stating, “We are proud of our extensive relationships with the top Holdcos, including both Omnicom and IPG, and believe that today's announcement is a positive one for the industry and Zeta." The company anticipates leveraging the enhanced data infrastructure and financial strength stemming from this acquisition to deepen AI-powered customer insights while expanding their market reach.

The recent acquisition of LiveIntent is expected to bolster Zeta’s capabilities substantially. Steinberg mentioned that it could contribute "vast data assets, direct channel capabilities, and a premium publisher network to the Zeta Marketing Platform," which would increase gross margins and facilitate a shift in revenue generation from agency clients to direct channels. This strategic integration aligns with Zeta's intent to take advantage of the newly formed Omnicom-Interpublic conglomerate.

Looking ahead, Zeta's financial forecasts appear robust, with Benzinga estimating fourth-quarter revenues of $265.73 million. This figure indicates a substantial 26.34% growth compared to last year's revenue of $210.32 million for the same quarter. Earnings per share for the fourth quarter are projected at 21 cents, up from 16 cents in the previous fiscal year, reflecting a 31.25% increase.

Additionally, Zeta has demonstrated a strong liquidity position with a current ratio of 3.319, significantly above the industry average of 2.16. This robust liquidity level has surged by 67.7% compared to the previous quarter, suggesting the company is well-positioned to meet its short-term financial obligations.

Market analysts have mixed views on Zeta’s stock. The consensus among analysts suggests a ‘hold’ rating with a price target of $32.59, while the highest target was set by Craig-Hallum at $45, reflecting a ‘buy’ recommendation. Analyst Jason Kreyer commended Zeta Global’s strong performance, attributing it to the successful merger with LiveIntent and the potential for cross-selling opportunities. Meanwhile, Goldman Sachs initiated coverage with a ‘neutral’ rating, setting a price target of $30 due to several medium-term risks including possible erosion of proprietary data value and the stringent privacy laws impacting its data-driven model.

While some analysts maintain a positive outlook for Zeta's continued growth, particularly stemming from its new acquisitions and market integration efforts, others emphasize the risks that may affect its future stability amid evolving consumer preferences and regulatory challenges. The lowest price target noted, from Credit Suisse, was adjusted to $9.5, still indicating a significant potential for growth as the average target across various analysts stands at $38.67, suggesting a potential upside of 105.13% for Zeta's stock.

Source: Noah Wire Services