William Blair analyst Arjun Bhatia has reiterated their bullish stance on ZETA stock, giving a Buy rating yesterday.
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Arjun Bhatia has given his Buy rating due to a combination of factors surrounding Zeta Global Holdings Corp’s strategic acquisition of Marigold’s enterprise business. This acquisition, valued at up to $325 million, is poised to enhance Zeta’s capabilities by integrating Marigold’s marketing automation and loyalty management software, which includes notable platforms like Cheetah Digital and Selligent. The deal is anticipated to be accretive to Zeta’s adjusted EBITDA and free cash flow within the first year, aligning with the company’s financial targets for 2028.
Furthermore, Bhatia highlights the acquisition’s potential to expand Zeta’s customer base by adding approximately 100 enterprise-grade clients, many of which are Fortune 500 companies. This move not only introduces new loyalty functionalities but also enriches Zeta’s platform with valuable data. Additionally, the acquisition increases Zeta’s presence in EMEA and APAC regions and enhances the company’s subscription revenue mix from 50% to 60%. The cross-selling opportunities between Zeta and Marigold’s customer bases present a significant growth potential, making this acquisition a strategically sound investment.
In another report released yesterday, Roth MKM also reiterated a Buy rating on the stock with a $44.00 price target.