Does Zeta Global Still Offer Value After Its Choppy 2024 Share Price Performance?

Zeta Global (ZETA) has navigated a turbulent 2024, with its share price reflecting the volatility inherent in high-growth tech stocks. Yet, beneath the surface, the company's financials and strategic positioning in the AI marketing cloud sector suggest a compelling case for valuation dislocation and durable growth potential.

Valuation Dislocation: A Discounted P/E Amidst a High-Growth Sector

Zeta's forward price-to-earnings (P/E) ratio of 28.41 places it at a discount relative to peers in the software and AI marketing cloud sectors. For context, Adobe Inc. (ADBE) and The Trade Desk, Inc. (TTD)-indirect competitors-trade at significantly higher multiples, reflecting their entrenched market leadership and profitability. Even within the broader software industry, Zeta's P/E lags behind Paycom Software (PAYC) and Unity Software (U), which sport forward P/E ratios of 31.68 and 26.16, respectively. This valuation gap appears misaligned with Zeta's robust financial performance.

In 2024, Zeta delivered $1.01 billion in revenue, a 38% year-over-year increase, while its adjusted EBITDA margin expanded to 19.2% according to financial reports. For 2025, the company raised its adjusted EBITDA guidance to $274 million, with a projected margin of 21.4%–21.5%. By 2026, Zeta anticipates $354 million in adjusted EBITDA, implying a 29% year-over-year jump. These metrics suggest that Zeta's earnings power is growing faster than its valuation, creating a potential arbitrage opportunity for investors willing to tolerate near-term volatility.

Durable Growth: AI-Driven Platform and Market Share Expansion

Zeta's AI marketing cloud is a key differentiator. Revenue from direct platform sales now accounts for 75% of total sales, up from a lower base in prior years. The launch of Athena by Zeta, an AI conversational agent, has further enhanced operational leverage and margin expansion. Meanwhile, the company's Super Scaled Customer base grew to 180 in Q3 2025, a 25% year-over-year increase, signaling strong cross-selling potential.

Despite a Q2 2025 market share of 0.82% in the AI marketing cloud sector, Zeta's growth trajectory outpaces competitors. Its Q3 2025 revenue of $337 million-a 26% year-over-year increase-surpassed guidance by $9 million, underscoring its ability to execute in a competitive landscape. The company's Zeta 2028 roadmap, which targets $2.1 billion in revenue by 2028, implies a 20% organic compound annual growth rate, a figure that could justify a re-rating if achieved.

Competitive Positioning and Risks

Zeta's valuation discount may reflect skepticism about its path to consistent profitability. The company reported a $69.77 million loss in 2024, though this marked an improvement from 2023. However, its EBITDA margins are expanding rapidly-from 19.2% in 2024 to a projected 23% in 2026. This trend aligns with its strategic focus on AI-driven automation, which reduces customer acquisition costs and enhances scalability.

The AI marketing cloud sector itself remains a high-margin, high-growth niche. While hyperscalers like Microsoft and Amazon trade at 26x forward P/E according to market analysis, Zeta's specialized platform offers a more targeted solution for marketers, leveraging advanced AI and consumer data analytics as reported in earnings. This niche positioning could insulate Zeta from broader market corrections, provided it maintains its innovation edge.

Conclusion: A Case for Value Amidst Uncertainty

Zeta Global's share price volatility in 2024 has created a valuation dislocation that undercuts its growth prospects. With a forward P/E ratio below peers, accelerating EBITDA margins, and a strong AI-driven platform, the company appears undervalued relative to its fundamentals. While risks such as unproven long-term profitability and modest market share persist, Zeta's strategic initiatives-including Athena and the Marigold acquisition-position it to capitalize on the AI marketing cloud's expansion. For investors with a medium-term horizon, Zeta offers a compelling blend of growth and value, provided the company can sustain its execution momentum.