Zeta Global Holdings (NYSE: ZETA)
has emerged as one of the more compelling companies in the rapidly evolving
world of AI-driven marketing technology. While the stock has faced noticeable
pressure over the past year, the company’s Q3 2025 results tell a far more
encouraging story one defined by accelerating revenue growth, improving
margins, stronger free cash flow, and increasing analyst confidence. 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
Zeta Global, founded in 2007 by
David A. Steinberg and John Sculley and headquartered in New York City,
positions itself as an “AI-Powered Marketing Cloud.” Its Zeta Marketing
Platform (ZMP) blends identity data, machine learning, and omnichannel activation
to help enterprises acquire, engage, and retain customers. With a vast
proprietary opt-in consumer database and reach across email, social, web, SMS,
and connected TV, Zeta has expanded through innovation and strategic
acquisitions, establishing a strong foothold in the MarTech and AdTech
landscape.
Zeta Global Financial
Performance
Zeta Global’s Q3 2025 financial
performance highlights strong momentum across key metrics. Revenue for the
quarter reached $337.17 million, up 25.67% from $268.3 million in Q3 2024,
while EPS improved sharply from –$0.09 to –$0.02, a 77.78% increase. On a TTM
basis, revenue climbed to $1.22 billion, up 35.87% from $901.4 million a year
earlier, and EPS improved from –$0.69 to –$0.11, a substantial 84.06%
improvement. Free cash flow per share (TTM) rose 37.04% from $0.54 to $0.74.
Profitability are okay with 60.84% gross margin, -1.86% net profit margin and 13.03%
free cash flow margin with –1.98% return on assets and –3.92% return on equity,
alongside a conservative 0.3 debt-to-equity ratio, indicating a stable balance
sheet. Although profitability is still negative, this is expected since Zeta’s
EPS remains negative on a GAAP basis.
Over the past five years, Zeta
Global has grown its revenue at a 28.8% CAGR and its free cash flow at 39.1%.
GAAP net income remains negative but is projected to turn positive in 2026.
Zeta has demonstrated consistent growth over time, and the rapid expansion of
its free cash flow makes the stock particularly attractive.
Zeta Global Fiscal 2025
Financial Forecast
Looking ahead, Analysts expect
revenue in 2025 to reach $1.27 billion, a 26.76% increase over
2024’s $1.01 billion, with non-GAAP EPS projected at $0.68, up 4.11%
from $0.65 in 2024. Wall Street maintains a Buy rating, with a
consensus price target of $29.36 offering potential 73.93%
upside, and a highest target of $44, implying potential upside of 160.59%.
ZETA Stock Price Performance
and Valuation
At the time this article was written ZETA stock was trading at $16.88 per share. Zeta Global’s stock performance has been mixed, with a –23.3% decline over the past year, significantly underperforming the S&P 500’s 12.2% gain during the same period. However, since its IPO in June 2021, the stock has risen 104.1%, outperforming the S&P 500’s 56.1% increase.
From a valuation standpoint, Zeta remains attractively priced for a high-growth
company, with a P/S ratio (TTM) of 3.04, forward P/S of 3.27, non-GAAP P/E
(TTM) of 22.56, forward non-GAAP P/E of 25.62, and P/FCF (TTM) of 25.44.
Based on Fiscal.ai data, looking
at valuation metrics since 2021, the forward P/S, forward P/E, and P/FCF ratios
are all below their historical averages. This indicates potential
undervaluation, especially since Zeta Global is still projected to grow rapidly
in the coming years.
Zeta Global Growth Potential
Zeta global growth potential remains robust driven by several factors.
- Accelerating Revenue Growth
and Market Expansion
Zeta Global achieved outstanding revenue growth in Q3 2025, reporting $337 million, a 25% increase year-over-year and surpassing analyst estimates of $328 million. The company now forecasts 15.5% annual revenue growth, significantly higher than the U.S. market’s 10.4% forecast. Management raised full-year 2025 guidance and projects 2026 revenue at $1.54 billion, a 21% increase from 2025, reflecting confidence in ongoing expansion. This consistent outperformance highlights Zeta’s ability to capture market share in AI-driven marketing automation.
The company’s repeated beats on consensus estimates validate its strong market position and execution. With targets of $2.1 billion revenue by 2028, Zeta aims for transformative growth fueled by strategic initiatives including the Athena AI platform and the Marigold acquisition, positioning it for sustained double-digit growth through medium-term expansion. - OneZeta Cross-Sell Momentum
and Multi-Use Case Expansion
The OneZeta initiative is a strategic driver focused on expanding product adoption within Zeta Global's existing customer base, creating a strong flywheel for revenue and lifetime value growth. Data shows customers adopting multiple use cases such as acquisition, growth, and retention on the unified platform generate significantly higher revenue. For example, a large retailer consolidated three use cases resulting in a contract 3.5 times larger than typical, while another retailer increased quarterly spend from $700K to $2M after adding a use case.
Year-over-year, the count of customers with two or more use cases more than doubled, accelerating multi-product adoption. The pending Marigold acquisition adds over 100 enterprise customers currently on single use cases, alongside 20 top advertisers and 40+ Fortune 500 firms, substantially expanding the cross-sell opportunity. This approach increases switching costs, deepens customer reliance, and strengthens retention. - Strategic Customer Acquisition
and Zeta Live Pipeline Generation
Zeta Global’s Zeta Live 2025 event achieved record attendance with a 35% increase, generating a pipeline targeting over $100 million in additional deal closures, nearly doubling last year’s figure. The event featured 38 sessions, 95 speakers, and over 120 product demonstrations to 1,500 high-value attendees, representing more than $100 billion in annual marketing spend. This strong engagement contributed to a substantial near-term opportunity, with management indicating the pipeline could surpass $100 million.
The company’s customer base expanded 20% YoY to 572, with particular strength in adding multi-use case clients, including the upcoming Marigold acquisition, which adds over 100 enterprise customers and top-tier brands. This momentum highlights Zeta’s ability to accelerate customer acquisition, deepen client relationships, and boost revenue through strategic events and expanded product adoption.
Risks to Consider
While Zeta Global looks like a
good stock, we should be mindful of potential risks
- Competitive and Execution
Risks
Zeta Global competes in a challenging ad tech market alongside major companies like Google and Meta. Its success relies heavily on acquiring and keeping clients amid ongoing shifts in AI technologies and evolving privacy laws. The rapidly changing landscape demands careful execution; any missteps in adapting to these regulatory and technological changes could slow revenue growth and negatively impact the company’s profitability and market position. - Regulatory Risks
Increasing scrutiny and tighter regulations on data protection and AI in the tech sector are raising compliance costs and operational challenges for Zeta Global. The company faces multiple federal privacy laws, like the American Data Privacy and Protection Act, with compliance expenses in the millions annually. Zeta invests heavily in data privacy infrastructure, AI governance, and consent management to meet these standards, but ongoing regulatory changes require constant adaptation, affecting its cost structure and operations. - Legal and Financial Risks
The company has recently been under investigation due to claims of improper board conduct and questionable financial reporting. Allegations include unethical data collection practices and inflated financial results, which have severely shaken investor confidence and caused a significant stock price drop. These issues raise concerns over Zeta’s transparency and governance, potentially leading to lasting financial and reputational consequences if not addressed promptly and decisively.
Read More: Hims & Hers Stock (HIMS) Great Growth and Good Value in Q3 2025
Conclusion
Zeta Global presents a compelling
blend of strong growth, improving profitability, and reasonable valuation. The
company continues to expand revenue at a rapid pace, strengthen free cash flow,
and enhance its financial outlook, supported by rising analyst confidence and
significant upside potential. Despite short-term stock underperformance, Zeta’s
solid fundamentals, AI-driven platform, and large addressable market position
it well for long-term success. For investors seeking a high-growth opportunity at
an attractive price, Zeta Global remains a promising investment candidate.
Comments
Post a Comment