Assessing Zeta Global’s (ZETA) Valuation After AI Sector Caution and Strong Revenue Growth

When OpenAI CEO Sam Altman called out the possibility of an AI investment bubble, comparing today’s environment to the late-1990s dot-com era, it sent ripples through the market. For Zeta Global Holdings (NYSE:ZETA), those comments led to two days of share price declines. This occurred even as the company announced higher revenue guidance and highlighted its growing free cash flow potential during presentations at two major tech conferences. If you are considering the stock after this move, it is natural to wonder if sentiment is shifting too far or not far enough.

Despite the broader chill around AI stocks, Zeta Global Holdings has been quietly delivering improvements where it counts. The company reported a 35% increase in revenue and reduced its net loss by more than half in the latest quarter. Yet, the stock is still down over 22% in the past year, even with a strong 44% surge over the past three months. This suggests that while momentum is building, past volatility and investor caution are holding the price back.

With attention focused on AI valuations and Zeta’s fundamentals showing positive movement, investors are left to consider whether the market is offering a genuine bargain or already factoring in all anticipated future growth.

Most Popular Narrative: 26.7% Undervalued

According to community narrative, Zeta Global Holdings is considered undervalued, with analysts forecasting substantial earnings and revenue growth over the coming years. This potential upside reflects a bullish perspective supported by key catalysts and projected financial improvements.

"Zeta is benefiting from rapid enterprise adoption of AI-powered marketing automation and omnichannel personalization. This is driving large, multiuse case deployments (like OneZeta), fueling double-digit revenue growth, and expanding customer lifetime value. The growing focus on data privacy and the shift to first-party data (due to regulatory changes and third-party cookie deprecation) position Zeta's proprietary data and integrated platform as a favored, compliant alternative. This supports client retention and differentiated pricing, which positively impacts both revenue and margins."

What is sparking this bullish valuation? Step inside the full narrative and you will find bold growth expectations for both earnings and revenue, crafted around a vision of expanding margins and breakthrough adoption. Wonder which future milestones and hidden metrics are tipping the scales so far above today’s price? Uncover the detailed financial assumptions behind the analysts’ 2028 forecasts. You just might be surprised by what they believe is possible for Zeta.

Result: Fair Value of $26.67 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, ongoing privacy regulations or persistent net losses could challenge Zeta’s ability to sustain growth and meet optimistic analyst forecasts.

Find out about the key risks to this Zeta Global Holdings narrative.

Another View: Our DCF Model

While analysts see upside based on expected profit growth, our DCF model also suggests the stock is trading below its estimate of fair value. Do both approaches really point to the same hidden opportunity, or is something being missed?

Look into how the SWS DCF model arrives at its fair value.

Simply Wall St performs a discounted cash flow (DCF) on every stock in the world every day (check out Zeta Global Holdings for example). We show the entire calculation in full. You can track the result in your watchlist or portfolio and be alerted when this changes, or use our stock screener to discover undervalued stocks based on their cash flows. If you save a screener we even alert you when new companies match - so you never miss a potential opportunity.

Build Your Own Zeta Global Holdings Narrative

If you see things differently or want to examine the details yourself, it only takes a couple of minutes to build your perspective and do it your way.

A great starting point for your Zeta Global Holdings research is our analysis highlighting 4 key rewards and 1 important warning sign that could impact your investment decision.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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