Zeta Global Stock (ZETA) Strong Growth and Good Value in Q2 2025

Zeta Global (NYSE: ZETA) has delivered another standout financial performance in Q2 2025, showing strong growth in revenue, improving earnings trends, and robust cash generation. Despite recent share price weakness, the combination of its accelerating fundamentals and favorable valuation metrics makes Zeta Global an intriguing opportunity for investor attention in the AI-driven marketing space. In this article we will dive into Zeta Global recent earnings, stock performance & valuation, growth potential, and the risks investor should consider.

About Zeta Global

Founded in 2007 by David A. Steinberg and John Sculley, Zeta Global is a public marketing technology company headquartered in New York City. It went public via IPO in June 2021. Zeta offers the Zeta Marketing Platform (ZMP), a comprehensive AI-powered marketing cloud that unifies identity, intelligence, and omnichannel activation across email, social, mobile, CTV, and social media. Built atop one of the industry’s largest proprietary databases, the platform empowers over 450 enterprise “scaled” customers to personalize campaigns using rich consumer data and advanced analytics.

Zeta Financial Performance

In the second quarter of 2025, Zeta Global delivered an impressive financial performance, showing strong top-line growth and improving profitability trends. The company reported revenue of $308.44 million, a 35.38% increase compared to $227.84 million in Q2 2024, marking another solid quarter of accelerating growth. On the bottom line, Zeta significantly narrowed its losses, posting an EPS of –$0.06 versus –$0.16 in the same period last year, representing a 62.5% improvement year-over-year. On a trailing twelve months (TTM) basis, revenue climbed to $1.15 billion, up 40.6% from $822.09 million in Q2 2024, while EPS (TTM) improved to –$0.18 compared to –$0.87 previously, a remarkable 79.31% improvement. Additionally, the company’s Free Cash Flow (FCF) per share (TTM) reached $0.66, rising 34.69% from $0.49 a year ago, demonstrating Zeta’s increasing ability to generate positive cash flows despite GAAP losses. From a profitability perspective, Zeta reported a gross profit margin of 60.89%, a net profit margin of –3.16%, and a free cash flow margin of 11.83%, reflecting healthy operational efficiency alongside disciplined expense management. In terms of returns, Return on Assets (ROA) stood at –1.14%, while Return on Equity (ROE) was –8.21%, indicating gradual improvement but still reflecting the early stages of achieving sustained profitability. The company maintains a solid debt-to-equity ratio of 0.31, suggesting a healthy balance sheet and manageable leverage levels.

Over the past five years, Zeta's revenue has been growing at a 29% CAGR, free cash flow at 36.9%, while net income remains negative but is projected to turn positive this year. Zeta has been growing rapidly in the past, and this rapid growth is still projected to continue.

Zeta Fiscal 2025 Financial Forecast

Looking ahead, analysts remain optimistic about Zeta’s growth prospects, forecasting 2025 revenue of $1.26 billion, a projected 25.49% increase from $1.01 billion in 2024. Non-GAAP EPS for 2025 is estimated at $0.66, up 1.07% from $0.65 in 2024, indicating further improvements in earnings performance. Reflecting this positive outlook, Wall Street analysts have assigned a Buy rating on ZETA stock with a consensus price target of $26.67, representing a potential upside of 40.29%, while the highest target price reaches as high as $44, implying a potential upside of 131.4% from current levels.

ZETA Stock Price Performance and Valuation

At the time this article was written the stock was trading at $19.01 per share, reflecting a –21.58% decline over the past year, significantly underperforming the S&P 500, which gained 14.3% in the same period. However, taking a longer-term perspective, the stock has delivered impressive returns since its IPO in June 2021, surging 129.8% and outperforming the S&P 500’s 50.8% gain over the same timeframe. 

From a valuation standpoint, Zeta’s current price-to-sales (P/S) ratio stands at 3.52x on a trailing twelve-month basis, with a forward P/S ratio of 3.72x, indicating that the market expects continued revenue growth. On the earnings front, the company trades at a non-GAAP price-to-earnings (P/E) ratio of 30.02x TTM, with a forward P/E of 29.99x, reflecting improving profitability and confidence in future earnings expansion. Additionally, Zeta’s price-to-free-cash-flow (P/FCF) ratio is 33.11x, a reasonable valuation given the company’s strong free cash flow growth and positive cash generation despite GAAP losses.

Based on Fiscal.ai data, if we look at the valuation since 2022, the forward P/S is slightly above the average, while the forward P/E and P/FCF are below the average. This indicates potential undervaluation as Zeta's financial performance is still projected to grow rapidly in the future.

Zeta Growth Potential

Zeta growth prospect remains strong, driven by several factors.

• AI-Driven Platform Innovation and Market Leadership
  Zeta Global is a pioneer in AI-powered marketing technology, with its advanced Zeta Marketing Platform (ZMP) delivering significant differentiation from traditional solutions. Utilizing AI, ZMP processes trillions of consumer signals to create hyper-personalized customer experiences across multiple channels. The introduction of Zeta Answers, a prescriptive AI framework, has boosted customer engagement and ROI, driving clients’ consumption revenue growth by over 40% year-over-year, well above the company’s overall growth rate.
  The platform combines identity resolution, intelligence, and omnichannel activation into one solution, solving marketers’ challenges with fragmented data. As the global AI marketing market is expected to grow from $20.44 billion in 2024 to $82.23 billion by 2030 at a 25% CAGR, Zeta’s early leadership offers a strong competitive edge. Its AI Agent Studio further strengthens this by enabling automated, personalized customer journeys without third-party cookies in the evolving digital ad landscape.
• Robust Customer Growth and Expanding Market Penetration
  Zeta Global’s customer metrics reveal strong market traction, with a 21% year-over-year increase to 567 scaled customers and an 11% rise in quarterly ARPU to $532,000. Its client base includes 44% of Fortune 100 companies, 11 of the 17 largest Consumer & Retail firms, and 5 of the 10 largest Insurance companies worldwide. Super-scaled customers whose spending over $1 million annually grew 13% year-over-year to 148, with a quarterly ARPU of $1.73 million, up 31%.
  The direct platform revenue mix improved to 75% from 67%, boosting margins and lessening third-party reliance. The OneZeta initiative aims to cross-sell multiple use cases, with under 20% of customers currently using more than one, suggesting significant growth potential within the base. The net revenue retention rate stands at 114%, reflecting strong satisfaction. The agency segment is thriving, with independent agencies doubling in 2025 and large agencies growing 40%.
• Strategic Market Position and Long-Term Growth Framework
  Zeta Global’s long-term growth strategy, outlined in its "Zeta 2028" plan, targets revenue of $2.1 billion with a 20% organic CAGR, adjusted EBITDA of $525 million at a 25% margin, and free cash flow of $340 million with a 16% margin and 65% conversion. This is supported by 14 consecutive quarters of over 20% revenue growth and operational improvements. Operating in a large $83 billion U.S. Total Addressable Market growing 12-14% annually, Zeta also has promising international opportunities.
  Industry recognition, including leadership in the latest Forrester Wave with top scores in 13 of 22 categories, affirms its strong position. With a unique data asset of over 2 billion consumer profiles and 1.5 billion identities, Zeta creates barriers to entry and enables superior targeting. Its focus on integrating the fragmented MarTech stack against growing demand for AI solutions supports sustained market share gains amid sector consolidation.

Risks to Consider

While Zeta stock looks like a compelling investment opportunity, we should be mindful of potential risks.

• Hyper Competition
  Zeta Global contends with intense competition from leading tech giants like Adobe, Salesforce, Oracle, Google, and Microsoft, all of which have strong footholds in the marketing cloud and advertising technology sectors. This fierce rivalry continuously challenges Zeta to protect its market share and drive innovation, as these established companies aggressively advance their offerings. The competitive landscape demands Zeta to consistently evolve and differentiate itself to maintain relevance and growth in the market.
• Regulatory and Data Privacy Scrutiny
  Zeta Global faces ongoing compliance risks due to evolving data privacy laws and increased regulatory scrutiny, which may result in higher costs and operational difficulties. Managing vast amounts of personal data exposes the company to significant cybersecurity threats and potential data breaches. Such events could severely damage Zeta's reputation and undermine customer trust. To mitigate these risks, the company must implement strong security measures and stay compliant with changing regulations.
• Macroeconomic and Market Risks
  Macroeconomic factors such as rising inflation, increased interest rates, and geopolitical uncertainties including US tariffs on IT hardware pose significant risks to Zeta Global. These conditions could lead clients to reduce their marketing budgets, while also dampening investor confidence. As a result, Zeta’s revenue growth and market valuation as a growth stock may be adversely affected. The company must navigate these challenges carefully to sustain its financial performance and investor appeal.

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Conclusion

Zeta Global (ZETA) has demonstrated strong momentum with robust revenue growth, improving EPS trends, and expanding free cash flow generation in Q2 2025. Despite short-term stock price weakness, its solid fundamentals, healthy balance sheet, and promising AI-driven marketing solutions position the company for continued success. With analysts projecting significant revenue growth and a potential upside of over 40%, Zeta remains an attractive long-term investment opportunity for investors seeking exposure to a high-growth, data-driven technology leader.