We came across a bullish thesis on Zeta Global Holdings Corp. (NYSE:ZETA) on wallstreetbets Subreddit Page by jasmichelle7. In this article, we will summarize the bulls’ thesis on ZETA. Zeta Global Holdings Corp. (NYSE:ZETA)’s share was trading at $18.74 as of Jan 2nd. ZETA’s forward P/E was 31.75 according to Yahoo Finance.
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Zeta Global (NYSE:ZETA), a digital marketing and advertising technology company, was significantly impacted by a short report in November 2024, which led to its stock price falling by nearly half from its all-time high of around $40. Despite the temporary setback, Zeta demonstrated resilience by disproving the allegations, with executives backing the company by purchasing millions of dollars worth of shares. This action, coupled with a proactive approach to addressing concerns, has positioned Zeta for a potential rebound, and its stock can be considered an attractive opportunity for investors, especially as earnings reports approach in February 2025.
Founded in 2007 and headquartered in New York City, Zeta operates primarily as a Software-as-a-Service (SaaS) platform specializing in AI-powered marketing automation, data analytics, and omnichannel advertising. In 2023, Zeta’s revenue reached $1.1 billion, up 22% year-over-year, driven by its strong customer base of over 1,200 enterprise clients. Despite not yet being consistently profitable, the company posted positive free cash flow and improved margins, signaling operational efficiency and a clear path toward sustainable growth. Its annual recurring revenue (ARR) stood at $700 million, with a retention rate of over 90%, reflecting strong customer satisfaction and loyalty.
Zeta differentiates itself in the competitive advertising technology space through its robust data capabilities, particularly its first-party data network of over 250 million consumer profiles. This network allows Zeta to offer targeted, high-conversion ads, giving it an edge over competitors that rely on third-party data. Its platform integrates the entire marketing lifecycle, from customer acquisition to retention, making it a one-stop solution for marketers. The company’s strategic acquisitions, like its purchase of LiveIntent, have further strengthened its position by expanding its data-driven capabilities.
However, risks remain, notably Zeta’s path to consistent profitability, economic sensitivity, and the evolving landscape of data privacy regulations such as GDPR and CCPA. Despite these challenges, Zeta’s growth prospects are promising. The company plans to expand its presence in high-growth markets like e-commerce, healthcare, and financial services, while investing in AI to improve marketing effectiveness. Additionally, international expansion and successful integration of acquisitions could provide significant upside potential.
With a market cap of $3.5 billion, Zeta’s valuation is attractive for investors willing to take on some risk, given its strong technological edge and potential for growth. If it can achieve sustained profitability and continue to innovate, Zeta offers significant upside potential in the digital marketing space.
Zeta Global Holdings Corp. (NYSE:ZETA) is not on our list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 31 hedge fund portfolios held ZETA at the end of the third quarter which was 27 in the previous quarter. While we acknowledge the risk and potential of ZETA as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than ZETA but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article was originally published at Insider Monkey.