Zeta Global's stock gave back some of its recent gains on Wednesday, retreating to around $23 after touching a weekly high of $24.45. The pullback comes as investors lock in profits following the company's robust second-quarter earnings report. Despite the dip, shares remain roughly 65% above their 2025 low, pushing the company's market capitalization past $6 billion.
Strong revenue growth and raised guidance
The marketing technology firm reported a 44% year-over-year increase in revenue, reaching $443 million for the quarter—$23 million above the midpoint of its prior guidance. The company added 197 super-scaled customers, up 17% from a year ago, while average revenue per user climbed to $1.8 million. Management attributed the acceleration to strategic partnerships with OpenAI, Snowflake, and Palantir, which it says have brought its multi-year platform investments to an inflection point.
CFO David Steinberg expressed confidence in the company's trajectory, stating, "Our first-half performance and pipeline visibility gives us the confidence to significantly increase the midpoint of our revenue, adjusted EBITDA, free cash flow and GAAP EPS expectations." The company raised its third-quarter revenue guidance to between $469 million and $472 million, a $10 million increase, excluding any temporary boost from political advertising or M&A activity.
For the full year, Zeta now expects revenue of $1.81 billion to $1.82 billion, with adjusted EBITDA between $401 million and $406 million. Free cash flow is projected to reach approximately $235 million. These figures underscore the company's accelerating growth, which may help justify its valuation—currently trading at a forward price-to-earnings ratio of 24 and a rule-of-40 metric of 64%.
Analyst sentiment and price targets
Wall Street remains largely bullish on Zeta Global. The consensus price target stands at $28, implying about 16.7% upside from current levels. Freedom Capital recently reiterated a strong buy rating, while Bank of America raised its target from $24 to $28. DA Davidson also lifted its target to $30. The positive sentiment reflects confidence in the company's growth trajectory and its ability to capitalize on AI-driven marketing demand.
Technical outlook: ascending triangle points higher
From a technical perspective, Zeta's daily chart shows the stock climbing from an April low of $10.68 to this week's high of $24.60. It has moved above the 50-day exponential moving average (EMA) and is forming an ascending triangle pattern—a classic bullish continuation signal. The stock has also broken above the Ichimoku cloud and the Supertrend indicator, suggesting momentum remains in favor of buyers.
If the pattern holds, the most likely scenario is a continuation of the uptrend, with the next target being the year-to-date high of $26. A decisive move above that level could open the door to further gains, potentially reaching $27.85—the stock's highest point in December 2024. However, investors should be mindful of broader market conditions, as recent volatility in tech and AI-related names has been notable. For context, Arista Networks' recent earnings also highlighted valuation concerns despite strong AI-driven growth.
Zeta's performance is part of a larger trend where AI and data-driven marketing companies are attracting significant investor attention. The broader market's AI rally has lifted many names, but it also raises questions about sustainability. As seen with Marvell's recent pullback, even strong growth stories can face volatility.
For now, Zeta's fundamentals and technicals appear aligned, but the dip after earnings may present an opportunity for investors with a longer-term horizon. The company's raised guidance and analyst support provide a cushion, yet the stock's valuation and market sentiment remain key factors to watch.
This article is for informational purposes only and does not constitute financial advice.
