Core Viewpoint - Zeta Global Holdings (ZETA) has received a Zacks Rank 2 (Buy) upgrade, indicating a positive outlook based on rising earnings estimates, which significantly influence stock prices [1][3]. Earnings Estimates and Stock Performance - The Zacks rating system emphasizes the importance of earnings estimate revisions, which are strongly correlated with stock price movements [4][6]. - For the fiscal year ending December 2025, Zeta is expected to earn $0.69 per share, unchanged from the previous year, but the Zacks Consensus Estimate has increased by 27.4% over the past three months [8]. Zacks Rating System - The Zacks Rank system classifies stocks into five groups based on earnings estimates, with only the top 20% receiving a "Strong Buy" or "Buy" rating, indicating superior earnings estimate revisions [9][10]. - Historically, Zacks Rank 1 stocks have generated an average annual return of +25% since 1988, showcasing the effectiveness of the rating system [7].

Core Viewpoint - Wall Street shows strong bullish sentiment towards the stocks discussed, with price targets indicating significant upside potential, although analysts tend to avoid sell ratings due to potential conflicts of interest [1]. Group 1: Stocks to Sell - **Shoe Carnival (SCVL)**: - Current trading price is $16.84 per share, with a consensus price target of $22, suggesting a 30.6% implied return [3][5]. - The stock is valued at 11.3x forward EV-to-EBITDA, indicating potential overvaluation [5]. - **CarMax (KMX)**: - Current stock price is $31.45, with a consensus price target of $55.50, implying a 76.5% upside [6][8]. - Valuation ratio stands at 11.7x forward P/E, suggesting that there may be better investment opportunities available [8]. Group 2: Stock to Buy - **Zeta Global (ZETA)**: - Consensus price target is $29.36, indicating a 50.2% implied return [9]. - The company has faced weak same-store sales trends over the past two years, indicating a need for changes in pricing and marketing strategies [9][10]. - Zeta Global operates a data-driven cloud platform powered by AI, processing over one trillion consumer signals monthly to enhance personalized marketing [11].

Core Insights - Zeta Global Holdings Corp. (NYSE:ZETA) experienced a significant stock price increase of 19.40% to close at $19.94, driven by strong earnings and a positive outlook for 2025 [1][3] - The company reported a narrowed net loss of 79% in Q3, reducing it to $3.6 million from $17.37 million year-on-year [2] - Revenue for Zeta Global increased by 25.7% to $337.17 million, surpassing previous guidance [3] - The company raised its revenue guidance for full-year 2025 to a range of $1.273 billion to $1.276 billion, up from the previous outlook [4] - Adjusted EBITDA expectations were also increased to $273.2 million to $274.1 million [5] - Initial guidance for full-year 2026 projects revenues of $1.54 billion, indicating nearly 21% growth from the updated 2025 outlook [5] Financial Performance - Q3 net loss narrowed to $3.6 million, a significant improvement from $17.37 million in the same quarter last year [2] - Revenue growth of 25.7% to $337.17 million compared to $268.29 million year-on-year, exceeding prior guidance of $327 million to $329 million [3] - Adjusted EBITDA is now expected to be between $273.2 million and $274.1 million, an increase from the previous estimate [5] Future Outlook - Revenue guidance for 2025 has been raised to $1.273 billion to $1.276 billion, up from $1.258 billion to $1.268 billion [4] - Initial revenue guidance for 2026 is set at $1.54 billion, reflecting a nearly 21% growth from the updated 2025 forecast [5] - The CEO highlighted the role of artificial intelligence and data products in driving growth, emphasizing their competitive advantage [3][4]

Economic Expansion - The Zeta Economic Index has shifted from contracting to expanding for the first time in six months, increasing by 150 basis points to 67.7%, indicating a healthy economic state [1][2]. Consumer Behavior - Despite concerns over a potential government shutdown, consumer spending remains robust across various sectors, including financial services, travel, entertainment, retail, automotive, and technology, all showing simultaneous expansion [4]. Moving and Credit Trends - There is a notable contraction in the moving index and credit expansion intent, attributed to high interest rates and the reluctance of consumers to give up low-cost mortgages [5][6]. - Consumers are less willing or able to take on new credit, with credit line expansion intent falling at a reduced rate compared to the previous month, suggesting a cautious approach to borrowing [7][8]. Mortgage Market Dynamics - Many consumers are hesitant to move due to the disparity between current low mortgage rates (2-3%) and higher rates (6-7%) available in the market, leading to increased costs associated with moving [9].

Core Insights - Zeta Global's shares increased by 14% following the announcement of its earnings, marking the 17th consecutive quarter of exceeding expectations with a sales growth of 26% and free cash flow growth of 83% [1][2] - The company is projecting at least 20% sales growth for 2026, indicating a strong growth trajectory [2] - Zeta's AI marketing capabilities are gaining traction among major enterprises, with 44% of the Fortune 100 as customers [3] Financial Performance - Zeta's net income margin has improved significantly from -40% to -4% over the past three years, indicating a path toward profitability [5] - Stock-based compensation is expected to decrease from 51% in 2022 to 15% in 2025, reflecting better operational efficiency [5] Product Development - The launch of the conversational AI agent, Athena, in Q3 highlights Zeta's commitment to integrating AI into advertising [4] - Zeta has received high rankings from Forrester, achieving the highest score in 13 out of 22 categories, solidifying its position as a leader in next-gen advertising [4] Market Position - Despite the complexity of its operations, Zeta's leadership rankings and rapid growth suggest it could be a strong investment opportunity, trading at 29 times forward earnings [6] - The company is recognized as a leader in its niche, with a strong market response to its recent earnings report [7]

Core Viewpoint - Zeta Global's stock is considered substantially undervalued based on a new DCF model that relies on management's targets rather than traditional assumptions [1]. Group 1: Financial Analysis - The DCF model is deemed highly reliable due to Zeta's management's performance and targets [1]. - The analysis indicates a potential for significant upside in Zeta Global's stock price based on current valuations [1]. Group 2: Management and Expertise - The company has a strong management team with extensive experience in finance, particularly in oilfield and real estate industries [1]. - The management's focus on equity research and analysis is highlighted, indicating a commitment to informed investment decisions [1].

Core Insights - Zeta Global Holdings (ZETA) is experiencing significant growth in the AI marketing cloud sector, marking its 17th consecutive quarter of beating and raising expectations due to increasing demand for its services [1] Company Performance - The company has demonstrated a strong trajectory of expansion in business software, indicating robust operational performance and market acceptance [1] Market Position - Zeta Global is positioned as a leader in AI marketing solutions, capitalizing on the growing trend of digital marketing and the need for advanced analytics in business strategies [1]

Financial Performance - Total revenues for Q3 2025 reached $337,169,000, a 25.7% increase from $268,295,000 in Q3 2024[21] - Operating expenses for Q3 2025 totaled $328,417,000, compared to $280,674,000 in Q3 2024, reflecting an increase of 17.0%[21] - The net loss for Q3 2025 was $3,634,000, significantly improved from a net loss of $17,375,000 in Q3 2024[21] - The company reported a basic loss per share of $0.02 for Q3 2025, an improvement from a loss of $0.09 per share in Q3 2024[21] - For the nine months ended September 30, 2025, the net loss was $38,048, compared to a net loss of $85,007 for the same period in 2024, representing a 55.3% improvement[30] - The net loss for the three months ended September 30, 2025, was $3.6 million, compared to a net loss of $17.4 million for the same period in 2024[154] Cash and Assets - Cash and cash equivalents increased to $385,184,000 as of September 30, 2025, up from $366,157,000 at the end of 2024[20] - Total current assets rose to $689,061,000, a 11.7% increase from $616,540,000 as of December 31, 2024[20] - The company’s total assets reached $1,150,767,000 as of September 30, 2025, compared to $1,111,373,000 at the end of 2024, reflecting a growth of 3.5%[20] - Stockholders' equity increased to $689,206,000 as of September 30, 2025, up from $676,801,000 at the end of 2024, representing a growth of 1.9%[20] - Cash and cash equivalents at the end of the period were $385,184, a decrease from $418,538 at the end of 2024[30] Liabilities and Equity - Total liabilities increased to $461,561,000, compared to $434,572,000 at the end of 2024, marking a rise of 6.2%[20] - The total accumulated deficit increased to $1,066,350,000, reflecting ongoing financial challenges[22] - As of September 30, 2025, the Company had long-term borrowings of $196,884, slightly up from $196,288 as of December 31, 2024[75] Revenue Sources - Total revenues for the nine months ended September 30, 2025, were $910,030, a 31.7% increase from $691,081 in 2024[51] - Direct platform revenue accounted for 75% of total revenue for the nine months ended September 30, 2025, compared to 68% in 2024, indicating a shift towards more direct revenue generation[45] - The increase in revenue was driven by $63.0 million from new customers, including approximately $20.6 million from the acquisition of LiveIntent, and $5.9 million from existing customers[155] Expenses - Research and development expenses for the nine months ended September 30, 2025, were $87,203,000, up from $66,407,000 in the same period of 2024, indicating a 31.2% increase[21] - General and administrative expenses increased by $5.9 million, or 11.7%, for the three months ended September 30, 2025, compared to the same period in 2024[157] - Selling and marketing expenses rose by $0.8 million, or 0.9%, for the three months ended September 30, 2025, driven by higher employee-related costs[158] - Research and development expenses increased by $7.0 million, or 30.7%, for the three months ended September 30, 2025, primarily due to higher employee-related costs[159] Acquisitions and Investments - The Company finalized the acquisition of LiveIntent for a total consideration of $276,976, which included $176,456 recognized as goodwill[69] - The proposed acquisition of Marigold enterprise software business is valued at up to $325,000, consisting of $100,000 in cash and $100,000 in Class A Common Stock[73] - The company incurred capital expenditures of $10,558 for the nine months ended September 30, 2025, down from $17,458 in 2024, reflecting a 39.5% reduction[30] Stock and Shareholder Actions - The company repurchased shares totaling 2,673,451, reflecting a strategy to manage equity and enhance shareholder value[22] - The Company authorized a stock repurchase plan (2025 SRP) of up to $200,000 for Class A Common Stock through December 31, 2027, supplementing the previous plan (2024 SRP) of $100,000[105] - During the nine months ended September 30, 2025, the Company repurchased 5,958,584 shares of Class A Common Stock for a total value of $85,092, with $198,944 remaining available for future purchases[106] Tax and Compliance - The company recorded an income tax provision of $3,676 for the nine months ended September 30, 2025, with an effective tax rate of negative 10.7% on a pre-tax loss of $34,372[117] - The income tax provision increased by $2.6 million, or 239.7%, for the nine months ended September 30, 2025, yielding an effective tax rate of negative 10.7%[176] Operational Insights - The company experienced a foreign currency translation adjustment loss of $112,000 during the quarter[22] - The company recognized $20,930 in revenues from deferred revenues during the nine months ended September 30, 2025, compared to $18,819 in 2024, a 11.2% increase[40] - The company is not currently involved in any litigation that would materially adversely affect its business, operating results, cash flows, or financial condition[214] Risk Factors - There have been no material changes to the risk factors previously disclosed in the 2024 Annual Report, except for new risks related to technology operations in India[215] - The reliance on technology and development resources in India may expose the company to unanticipated costs and liabilities, potentially affecting cost savings[216] - Enforcement of intellectual property rights in India may be less effective than in the U.S., leading to potential litigation and significant cash expenditures[217]

Group 1 - The article does not provide any relevant content regarding company or industry insights [1]

Financial Data and Key Metrics Changes - In Q3 2025, revenue reached $337 million, representing a 28% year-over-year increase when excluding political and LiveIntent contributions, marking an acceleration from Q2's growth rate [5][15] - Adjusted EBITDA was $78 million, up 46% year-over-year, with a margin of 23.2%, reflecting a 320 basis point improvement [5][18] - Free cash flow was $47 million, an 83% increase year-over-year, achieving a margin of 14%, the highest in the company's history [5][19] Business Line Data and Key Metrics Changes - The total scaled customer count grew to 572, a 20% year-over-year increase, with 180 super scaled customers, up 25% year-over-year [15][16] - Quarterly revenue per user (RPU) for scaled customers was $579,000, a 4% increase year-over-year, while super scaled customer RPU was $1.6 million, up 1% year-over-year [16] Market Data and Key Metrics Changes - Seven of the top ten verticals grew faster than 20% year-over-year, with notable growth in telecom, retail, travel, hospitality, and automotive sectors [17] - The direct revenue mix was 75%, consistent with Q2 and up from 70% in the previous year, indicating successful agency direct channel adoption [17] Company Strategy and Development Direction - The company is focused on AI-powered marketing, with the launch of Athena, an AI conversational agent designed to enhance client interactions and operational efficiency [8][10] - The acquisition of Marigold's enterprise software business is expected to enhance data capabilities and accelerate growth, with a completion target by the end of the year [12][13] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving a record pipeline and raised 2025 revenue guidance by $11 million, anticipating continued organic growth [7][22] - The company aims for durable, predictable, and profitable growth, with a target of over $100 million in incremental business from Zeta Live [8][41] Other Important Information - The company repurchased 1.7 million shares for $28 million in Q3, totaling 6 million shares for $85 million year-to-date, with zero net dilution reported [20] - The company plans to provide clear distinctions between organic and acquired revenue post-acquisition of Marigold [21] Q&A Session Summary Question: How does Zeta's ROI compare to walled gardens? - Management stated that Zeta's platform delivers a 6X return on investment, putting it on par with major competitors in the media space [30] Question: What is the target for incremental business after Zeta Live? - Last year, the company closed $57 million in business post-event and aims for $100 million this year, with a strong pipeline already in place [41] Question: How is the integration of LiveIntent performing? - Management expressed satisfaction with LiveIntent's performance, noting that they are accruing at 100% of their earnout and seeing new product synergies [44] Question: What are the expectations for sales and marketing investment? - Management indicated that while sales and marketing expenses decreased slightly, productivity from existing sales reps has been high, and they are actively hiring more [58] Question: What is the outlook for the telecom vertical? - Management noted strong momentum in telecom, with significant wins and a focus on this sector contributing to overall growth [102]