This AI stock has returned 32% over the past week and surged 16% on Monday.
Zeta Global Holdings (NYSE:ZETA) stock has been on a tear as of late, rising 32% over the past five days and 16% on Monday.
If you have never heard of this marketing technology firm, it might be worth getting familiar with it. The company, launched in 2007, offers its customers marketing tools to reach customers and monetize those relationships. It does this through what it calls its AI-Powered Marketing Cloud on its Zeta Marketing Platform.
The platform uses AI to gather massive amounts of consumer data to help marketers reach and retain customers more effectively and efficiently. The platform also allows customers to create their own AI marketing agents to help customers handle certain marketing tasks.
It’s a niche within the marketing industry that has largely been untapped, so analysts see big upside for this AI stock, Zeta.
AI is underutilized by marketing managers
The reason for optimism relates in part to a study Zeta released last week that shows that a relatively small percentage of marketers are using AI. The study, called “It’s Time to Get Serious About AI’s Business Value,” found that 62% of organizations describe their use of AI as “limited” or “moderate.” This was based on feedback from 300 North American marketing technology decision-makers.
At the same time, the study revealed that business leaders are enthusiastic about AI with 64% saying it will increase ROI, 63% saying it will improve customer retention, and 58% saying it will spur revenue growth.
“Marketing should be at the front lines of the AI revolution, but many teams are held back by fragmented data, legacy systems, and skills gaps,” David Steinberg, co-founder, chairman, and CEO of Zeta Global, said. “This study reinforces what we hear every day: marketers don’t need more AI promises; they need practical, scalable ways to turn AI into better performance. That’s the potential of an agentic future – systems that predict what to do and make it easy to act.”
This presents a major opportunity for companies like Zeta, which can help their customers take advantage of AI.
3 Reasons why analysts are bullish on Zeta
Wall Street analysts are bullish on Zeta for several reasons. One, it has been a steady grower over the years, with 15 straight quarters in which it has beaten earnings estimates and raised its outlook. In the most recent quarter, Zeta saw revenue increase 36% year-over-year. Further, it narrowed its net loss to just $22 million, from $40 million a year ago, and increased its adjusted EBITDA by 53% to $44 million.
For fiscal 2025, Zeta expects revenue to rise 23% to 24% to $1.237 billion to $1.247 billion, and adjusted EBITA to $257.5 million to $259.5 million – or 33% to 34% growth.
Zeta, since it went public in June of 2021, has had an average annualized return of 16%. Over the past three years it has an average annualized return of 50%.
Two, this study shows that there is a significant runway for long-term growth. With only 62% calling their engagement with AI limited or moderate, there is plenty of opportunity for firms like Zeta to generate consistent earnings.
Three, it is relatively cheap, with a forward P/E of 21 and a five-year P/E-to-Growth ratio of 0.73, which suggests that the stock is a good value relative to its future earnings potential.
Analysts have set a median consensus price target of $25 per share, which would be about 51% higher than its current $16.60 per share price. Analysts at William Blair just reiterated their outperform rating for Zeta this week and raised its target from $20 per share to $25 per share. William Blair called Zeta stock undervalued relative to its 20%-plus revenue growth and expanding EBITDA margins.
It all adds up to an AI stock that investors should put on their radar.
