Zeta Global Stock Before Q4 Earnings: Smart Buy or Risky Move?

Zeta Global ZETA will report its fourth-quarter 2024 results on Feb. 25, after market close.

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The consensus estimate for total earnings is pinned at 23 cents per share, implying a 35.3% year-over-year rise. The Zacks Consensus Estimate for revenues in the to-be-reported quarter is pegged at $295 million, suggesting 40.3% growth on a year-over-year basis.

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The company’s earnings surpassed the Zacks Consensus Estimate twice in the trailing four quarters and missed in the remaining two, delivering an average negative earnings surprise of 10.5%.

Zeta Global Holdings Corp. Price, Consensus and EPS Surprise

Zeta Global’s Lesser Chance of Q4 Earnings Beat

Our proven model does not conclusively predict an earnings beat for ZETA this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. But that is not the case here. You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.

Zeta Global has an Earnings ESP of 0.00% and a Zacks Rank #3 at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

AI Led Innovations to Have Been ZETA’s Driver in Q4

Zeta Global’s AI-powered intelligent mobile solution allows marketers to leverage AI to activate and coordinate bespoke cross-channel campaigns that deliver improved customer experiences. We anticipate this innovation to have enhanced consumer interactions, thereby driving more business and resulting in better business outcomes.

Furthermore, the expanded lineup of gen-AI in the company’s marketing platform has been evident in boosting customer demand. Such outcomes lead us to believe that the top line is likely to have grown on the back of customer wins and expansion in existing contracts.

Zeta Global Stock Soars

ZETA shares have skyrocketed 133.7% in a year, outperforming the 111.2% surge of its industry and the 24.4% growth of the Zacks S&P 500 composite. The company’s industry peers, LiveRamp RAMP and BIT Mining Limited BTCM have underperformed ZETA significantly. RAMP has lost 8.3% and BTCM has plummeted 42.6% over the same period.

One-Year Price Performance

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ZETA Global’s stock is looking cheaper and is currently trading at a trailing 12-month price-to-earnings ratio of 28.5, well below the industry’s 47.8X.

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ZETA’s Investment Considerations

Zeta Global is building upon its existing assets via the LiveIntent Buyout, which expands publisher monetization, augments the company’s brand-new mobile and retail solutions, and improves ZETA’s data cloud. The rising capabilities are being recognized by industry analysts in the marketplace.

The company benefits from a rising Request for Proposal pipeline, driven by ZetaLive and positive industry analyst recognition pointing at future deal wins. Improvement in scale customer average revenues per user portrays ZETA’s efficient customer base monetization capabilities. This, coupled with increasing total scaled customers and brands, paves a path for sustained growth for Zeta Global, making it an attractive investment opportunity.

Meanwhile, investors might investigate the company's aim to pay a bulk of LiveIntent’s acquisition-related expenses in the fourth quarter of 2024, which might affect the bottom line. Furthermore, Zeta Global’s agency customers take a longer time to pay their bills, which might affect the cash flow. No intentions to pay dividends could be concerning for investors.

Final Thoughts: Hold Zeta Global for Now

ZETA’s long-term growth is vested in its ability to deliver promising results to its customers using AI-led innovations. Top-line growth is attributable to the surge in customer demand. Buyouts, including LiveIntent, can act in good faith toward expanding Zeta Global’s footprint and improving service offerings. However, rising expenses pose a threat to its bottom line, and delays in customer payments can shake cash flows.

While ZETA remains fundamentally strong and possesses a discounted valuation, a better entry point could emerge if the stock undergoes some correction.

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