On Monday, UBS updated its assessment of Zenvia Inc. (NASDAQ: ZENV) shares. The firm's price target was increased to $3.30, up from the previous target of $1.30, while the analyst retained a Neutral rating on the stock.
The revision follows Zenvia's major restructuring in February 2024, which involved the renegotiation of banking debt and acquisitions earn-out. Additionally, the company received a R$50 million capital injection from its founder.
These efforts, combined with Zenvia's fourth-quarter earnings and guidance for 2024 that were well-received by the market, led to a 30% increase in the stock's value since the announcement.
UBS's new price target reflects nearly a tripling from the previous target, taking into account the recent positive developments within the company. Zenvia's increased revenue and margin predictability post-restructuring have been significant factors in the revised valuation.
Despite the increase in the price target, the firm notes that Zenvia's stock multiples appear to already reflect the company's improvements.
With 2025 estimated multiples around 1x sales, 6x EBITDA, and greater than 100x 2025 estimated P/E, UBS suggests that there is limited potential for a re-rating of the stock. The firm forecasts mid-teens growth and low-double EBITDA margins for Zenvia in the coming years.
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