Anticipated Price Reduction for Zeta Global at RBC before Q1 Financial Reports
Zeta Global, famous for its marketing software, found itself under the microscope on a bustling Monday. Investment firm RBC Capital lowered its price target for the company ahead of the upcoming first-quarter results.
In the midday trading session, the stock remained relatively stable.
RBC's decision to revise its target is based on their own industry checks and a close look at competing companies[1][3]. However, RBC remains optimistic about Zeta's upcoming performance, hinting at "solid results"[1].
Now, let's delve into Zeta's previous financial performance. The company celebrated record-breaking results in Q4 2024, with:- A whopping 50% year-over-year revenue growth, reaching a staggering $315 million[4][5]- A significant 57% surge in adjusted EBITDA, hitting $70 million[5]- Zeta's first GAAP net profit as a public company ($15.2 million)[5]- An impressive $92 million in annual free cash flow with 9.2% margins[5]
As we approach Q1 2025, expectations are high. Analysts forecast a revenue of $253.5 million, marking a 30% year-over-year increase[2]. Meanwhile, EPS is predicted to jump by over 100% to $0.12[2].
So, what's driving this growth? AI integration and the adoption of the Zeta Direct platform, derived from the acquisition of LiveIntent[2][5], are key factors. Additionally, Zeta intends to expand its reach within the automotive, retail, and political advocacy sectors[2]. The company is also seeing its customer base grow, with 527 scaled customers (+17% YoY)[5], and boasting a remarkable 114% net retention rate[5].
Investors are keeping a close eye on whether Zeta can uphold its 2025 guidance of $1.24 billion in revenue (+23%) and $256.5 million in adjusted EBITDA[5]. This scrutiny is particularly intense given RBC’s cautious optimism regarding potential macroeconomic pressures[1][3]. It's an exciting time for Zeta, and we'll soon see if the company can continue to outshine expectations.
- RBC Capital's focus on Zeta Global, amidst the bustling Monday business, led to a revised price target ahead of the first-quarter results, despite remaining optimistic about the company's solid results.
- On a certain Monday, during the midday trading session, Zeta Global's stock remained relatively stable.
- The technology integration, particularly AI and Zeta Direct platform, and expansion into various sectors like automotive, retail, and political advocacy, are key factors driving Zeta Global's investment opportunities and financial growth.
- In light of Zeta Global's strong performance in Q4 2024, where it reported significant revenue growth, increased adjusted EBITDA, and first-ever GAAP net profit as a public company, investors are now scrutinizing the company's potential to meet its 2025 guidance of increased revenue and EBITDA.
- Analysts anticipate Zeta Global's Q1 2025 revenue to surge by 30%, while EPS is expected to more than double, but uncertainty remains due to potential macroeconomic pressures, as hinted by RBC Capital.
