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TL;DR (Too Long; Didn't Read)
Zeta Global (ZETA) is a high-growth, AI-powered marketing platform that just delivered its 15th consecutive "beat and raise" quarter with strong Q1 revenue growth of 36%. Despite this excellent execution and a clear long-term growth plan , the stock has fallen significantly from its 52-week high, creating a potential dislocation between fundamentals and price. The investment thesis is built on this opportunity, balanced by management's "conservative" outlook for the second half of the year and technical selling pressure that may lead to near-term consolidation
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We initiated our position in Zeta Global Holdings (ZETA) in September 2024 at $30, as price fell abruptly we exited on a loss, and built a position later starting slowly in the low $20. As our conviction grew stronger, we significantly increased in 2025. After Q1 earnings release the stock climbed 17% and then gave it all back, where we added and increased our position again. Today is our #5 position (behind HIMS, TMDX, OSCR and BTC).
Key Points
Zeta Global is redefining digital marketing with its AI-powered Zeta Marketing Platform (ZMP) and a proprietary data cloud covering 90% of U.S. adults.
Zeta delivered its 15th consecutive "beat and raise" quarter: Q1’25 revenue grew 36% YoY to $264 M and adjusted EBITDA rose 53% to $47 M.
The stock price was $12.25 as of the June 13, 2025 close, down significantly from its 52-week high of $38.20, which may offer a compelling entry point
Analyst price targets average $30.00, suggesting a +100% upside, despite recent bearish trends.
Company Overview
What Zeta Global Does
Zeta operates a cloud‑native, AI‑driven marketing platform (the Zeta Marketing Platform, or ZMP) that unifies customer identity, data, and omnichannel activation. Leveraging a proprietary data cloud covering 245 M U.S. individuals and >30 B daily signals, ZMP enables enterprises and agencies to acquire, grow, and retain customers with measurable ROI across channels such as email, web, CTV, social, and programmatic media.
For a 10-year-old: "Zeta has a secret map of what people are interested in and uses it with a super-smart computer to help companies like T-Mobile and American Express find new customers."
Why We Own It
Zeta is compounding revenue >30% with expanding margins, fueled by a sticky enterprise customer base with a net revenue retention rate of at least 111%, the rapid adoption of agentic AI workflows, and an increasing direct-platform revenue mix. Its durable data assets, diversified vertical exposure, and rising free‑cash‑flow conversion support a multi‑year runway toward the company’s 2028 target of >$2 B revenue and 25%+ EBITDA margin.
Company
Founded in 2007 by David Steinberg and John Sculley. Zeta was founded to solve the problem of fragmented marketing tools and disconnected data. By integrating a proprietary data cloud, AI, and an omnichannel marketing platform, Zeta enables marketers to manage the entire customer lifecycle from a single dashboard.
Zeta is a category-defining leader poised to consolidate the fragmented martech landscape. Its platform delivers a clear, measurable ROI, making it a durable partner for marketers, especially when budgets are scrutinized.
Key-Strengths
Proprietary, identity-based data graph that is difficult and time-consuming to replicate.
A single, AI-native platform replacing multiple point solutions and legacy clouds.
Consistently strong execution with 15 consecutive quarters of beating and raising guidance.
Named a "Leader" by Forrester, validating its product strength against competitors.
Multiple growth vectors, including use-case expansion, new AI products, and agency channel growth.
Competitive Analysis
Zeta competes with legacy marketing clouds (Adobe, Salesforce, Hubspot), AdTech platforms (The Trade Desk), and modern point solutions (Braze). Zeta’s key advantage is its unique ability to combine three critical elements that competitors lack in unison:
A massive, proprietary data asset for identity and intent signals.
An integrated platform for both "owned" (email, SMS) and "paid" (CTV, social) channel execution.
AI natively built into the platform for faster, more effective decision-making.
Legacy players lack Zeta's data asset, while AdTech players cannot execute on owned channels. This integrated model creates a strong competitive moat that is enhanced as more customers join the platform.
Growth Levers to Watch
Zeta 2028 Plan: Long-term targets for $2.1B revenue , $525M Adj. EBITDA, $340M FCF
One Zeta / Use-Case Expansion: Driving customers to adopt multiple use cases (Acquire, Grow, Retain) has a 5x-10x revenue multiplier potential. Only 15% of customers currently use multiple use cases, representing a massive opportunity.
AI Adoption: The rollout of AI Agent Studio and the "Answers" framework is expected to drive higher customer consumption and wallet share.
Agency Penetration: Deepening relationships with the large agency holding companies and rapidly growing the high-margin independent agency business.
International Expansion: Management has identified Western Europe and Latin America as future growth opportunities.
Market Trends
Zeta is capitalizing on three powerful market trends:
Convergence of Marketing and Advertising: CMOs want to unify their data and execute campaigns from a single platform, a core tenet of Zeta's strategy.
Demand for ROI and Accountability: In an uncertain macro environment, marketing budgets are shifting to performance-based, lower-funnel activities where Zeta excels.
Legacy Platform Replacement: Enterprises are moving off older, less agile marketing clouds, creating a large replacement opportunity for Zeta’s modern, AI-native architecture.
Latest Earnings Story
Q1 2025 results demonstrated continued strong execution. Revenue of $264 million and Adjusted EBITDA of $47 million both beat guidance. The company showed significant operating leverage, with Adjusted EBITDA margins expanding by 200 bps YoY to 17.7%. Free cash flow was exceptionally strong, growing 87% YoY to $28.2 million. This performance was driven by the "One Zeta" cross-sell strategy and strong momentum with agency partners.
Management raised its full-year 2025 revenue guidance to a midpoint of $1.242 billion and Adjusted EBITDA to $258.5 million. However, the raise was coupled with repeated emphasis on a "conservative" outlook for the second half of the year, citing macro uncertainty despite seeing no actual business slowdown
Price Action
The stock experienced a sharp correction after a strong rally in 2024 to the $38–$40 range and is now consolidating between $11.70 and $13.00. Support is holding around the 200-day EMA and 20-day SMA ($11.70–$11.90), while resistance sits near the 20-day EMA at $15.16 and the 50-day EMA at $17.02.
The RSI is around 40, suggesting weak momentum but not yet reaching oversold conditions.
Choppy price action is largely driven by prior buyers above the $15–$20 level who are now underwater and looking to exit on strength. This selling pressure is limiting upward movement and contributing to the current sideways trading range, as the market works through residual supply.
Over the next three to six months, the stock is likely to continue consolidating between $11.70 and $15–$17 unless a catalyst emerges. Potential drivers for a breakout include strong earnings results, notable new customer wins, M&A activity, or macroeconomic tailwinds such as rate cuts. A clean break above $17 on volume would mark a clear bullish shift.
Risk Management and Long-Term Outlook
Zeta is exposed to manageable risks:
Macroeconomic Sensitivity: An economic downturn could pressure enterprise marketing budgets. Management has proactively addressed this by embedding conservatism in its H2 2025 guidance.
Execution: The company's rapid growth depends on its ability to continue hiring skilled personnel and managing the complexities of scaling its operations.
Competition: Zeta operates in a competitive space with large, well-funded incumbents and agile startups.
Dilution and SBC: Historically an investor concern, but management has committed to significant improvements, with concrete targets for 2025 and 2026.
The company's perception was notably challenged in late 2024 by a short-seller report that questioned its data practices. Management responded directly by hosting a comprehensive "Data Summit" in December 2024 to provide transparency on its data sources, compliance, and governance. According to executives, the event caused "no disruptions" from a customer perspective, underscoring the trust of its enterprise clients, many of whom are in highly regulated industries.
The long-term outlook is strong. The company is executing well, taking market share, and is well-positioned to benefit from durable secular trends in marketing. The Zeta 2028 targets provide a clear and ambitious roadmap for long-term value creation.
Investment Model
This is a model that projects revenue growth and adj EBITDA growth. The multiple may be too optimistic or too conservative. Up to you to decide.
Conclusion
The Q1 2025 results reinforce the thesis that Zeta is a durable, high-growth leader. The company’s strong financial performance, major deal momentum, and clear focus on improving shareholder returns are compelling. While management has adopted a cautious tone on the macro environment, the underlying business fundamentals appear stronger than ever. Zeta is well-positioned to continue gaining market share and execute on its long-term Zeta 2028 plan.
We remain patient, as ZETA represents a compelling growth story where the stock price has declined without an apparent deterioration in business fundamentals.
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