Zeta Global stock price has rebounded in the past few months, moving from a low of $10 in April to $20.7 today. It is hovering at its highest point since February, giving it a market capitalization of over $4.5 billion.
Zeta Global growth is accelerating
Zeta Global is a top company that provides an AI-powered, data-driven platform offering enterprises with consumer intelligence and marketing automation software. Its goal is to help them target, connect, and engage consumers.
Zeta Global serves top companies like For, Williams-Sonoma, Ally Bank, and MGM Resorts. It counts about 44% of the Fortune 100 companies as clients.
Its growth has accelerated in the past few years as companies look for ways to boost their businesses and engage with their users.
Its financials show that the annual revenue rose from $368 million in 2020 to over $1 billion in 2024. Most importantly, it has continued to narrow its losses, and analysts expect that it will turn a profit this year. Its annual loss moved from $279 million in 2022 to $69 million last year.
The most recent results showed that Zeta Global’s revenue rose by 35% in the second quarter,the 14th straight quarter of over 20% growth. Part of this growth was because of its acquisition of LiveIntent.
Its EBITDA margin improved by 210 basis points to 52%, while its free cash flow growth rate was 69%. It experienced 18 consecutive quarters of EBITDA growth.
Most importantly, more customers are moving to Zeta, with the total count growing to 567 from 425 in the second quarter of 2023.
Growth and valuation
As a result, the management boosted its for this year and its targets for 2028. It expects that its 2028 revenue will hit $2.1 billion, up from this year’s estimate of $1.2 billion. The EBITDA will be $525 million, and the free cash flow $340 million.
Wall Street analysts expect its revenue growth this year to come in at $1.26 billion, representing a 25% annual increase, followed by $1.48 billion next year. Also, the earnings per share (EPS) this year will be 66 cents followed by 86 cents next year.
Still, the main concern is that Zeta Global is a bit overvalued based on the rule-of-40 metrics. Its forward revenue growth is about 20%, while its net income margin is minus 3.16% and its free cash flow margin is 12%.
Zeta Global stock price technical analysis
Zeta stock chart | Source: TradingView
The daily timeframe chart shows that the ZETA stock price bottomed at $10.5 in April last year and then moved to the current $20.7. It recently formed the highly bearish golden cross pattern, which happens when the 50-day and 200-day Exponential Moving Averages (EMA) cross each other.
Zeta Global has also jumped above the Ichimoku cloud indicator and formed an ascending channel.
Therefore, the most likely scenario is where the stock continues rising as bulls target the extreme overshoot level of the Murrey Math Lines tool at $28, which is about 36% above the current level.
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