Mitchell Martan
Investment Researcher for The Long Investor, Economics/Finance Background
Zeta Global is too cheap and its re-rating should continue after a 20th straight beat and raise with improving margins. Revenue was $443M versus $421M expected, up 44%, and super-scaled customers rose 17% to 197. FY26 guidance rose to $1.81-1.82B revenue and $404.1-406.3M adjusted EBITDA, both above estimates. The 12% knee-jerk drop was unjustified. x.com x.comÂ
Zeta Global's Palantir partnership validates Athena as a core enterprise AI application rather than another martech product, which the market undervalues. Palantir isn't just integrating Zeta into Foundry; it is helping bring Athena to its big enterprise customer base. CEO David Steinberg argues every enterprise will need an AI application layer on its data for real-time decisions. The roughly $100 million revenue figure is likely conservative, and successful deployments should bring more deals. x.com x.comÂ
Zeta Global's 20 straight beat-and-raise quarters, 44% Q2 revenue growth and new GAAP profitability support the bullish momentum call. The upper Bollinger Band trend puts the $38.20 all-time high within reach. x.comÂ
Zeta Global's contracted revenue gives growth more visibility. RPO expected to be recognized within 12 months reached $218.7M, up from $71.3M in Q3 2025. Management makes a compelling comparison with Salesforce's $5.66B Braze deal: Zeta has about twice Braze's forward revenue, higher guided FY26 free cash flow than Braze's FY26 actual, and a lower revenue multiple. That gap alone does not prove Zeta is undervalued; management sees a chance to win customers during integration. x.com x.comÂ
Zeta Global looks expensive at 52 times cash earnings, against the 30 times software companies usually get. Fair value sits at $16.62 to $21.15, based on 30 times next year's cash earnings give or take 12%, and the $32.63 price is 54% above the high end. That range leans on forecasts, with forward earnings 67% above trailing. This is a levels-only read off reported earnings and estimates, with no fundamental work. x.comÂ
Zeta Global looks cheap at about 2.9x forward sales while guiding 36-37% revenue growth, and could re-rate if seen as enterprise AI software rather than messy adtech. Q1 revenue rose 50% to $396M, and a Palantir partnership to rebuild its Data Cloud on Foundry could add over $100M of annual revenue in coming years. A July 6 Citi talk on its AI strategy is a near-term catalyst; 4.5x sales implies about $32. Risks include privacy issues, thin GAAP profit and customer concentration. x.comÂ
Zeta Global deserves a re-rating from marketing software to an AI data layer, backed by its 20th straight beat and raise. Q2 revenue rose 44% to $443 million, 28% organic, beating about $420 million expected, and 2026 guidance rose to $1.811-1.824 billion. Free cash flow jumped 73% to $58 million. Customers paying over $1M a year rose 17% to 197, with average revenue each up 17% to $1.8 million, and customers using 5+ channels rose 50%. x.comÂ
Zeta Global's growth is increasingly manufactured by acquisitions and lower-margin channels, masking organic deterioration. Excluding political spend and the Marigold acquisition, organic growth slowed to 28%, and the Direct Platform mix slipped to 72%. GAAP EPS of just $0.03 leaves no room for multiple expansion, and rising cost of revenue from agency traffic points to margin compression, explaining the 10% drop despite a beat. x.comÂ
Zeta Global could become a much larger company: at Zeta Live, executives with over $200 billion of decision-making power discussed what its keynote meant for their own companies, a firsthand sign of potential enterprise interest. Its 120% net dollar retention suggests existing customers get value, though future growth is uncertain. x.comÂ
Zeta Global's DCF model now matches its $52 technical target, reinforcing the case that it is undervalued. The stock broke out of a large bullish wedge, rising from $18 in May to $32 after holding the 200-week moving average and reclaiming the 50-week, and its fundamentals are among the strongest in the AI sector. x.comÂ
Zeta Global sells into an extremely competitive marketing-software space, and AI tools like Claude layered on top make it worse. Vendors like Zeta and Mixpanel used to compete hard just to win product-launch business, user acquisition costs are high, and a graveyard of better enterprise SaaS sits in private markets, unable to exit on slow growth and low margins. Others cite Zeta's 50% growth and 120% net revenue retention, but buying software here is trying to be too clever. x.com x.com x.com … Show more
Zeta Global's discount to software peers rests on temporary factors, and GAAP profitability in 2026 should open it to institutional buyers who cannot hold it today. Q1 2026 was its 19th straight beat-and-raise: revenue rose 50% to $396M and full-year guidance rose to 37% growth, with free cash flow outgrowing revenue. Yet it trades at 3.2x sales versus 4.3x for direct peers, below a $27.93 DCF value. The discount stems from a debunked 2024 short attack, GAAP losses and an unexciting story. x.comÂ
