Why One Fund Added 415,000 Shares of a Software Stock Down 26% This Past Year

Core Insights - Manatuck Hill Partners has increased its stake in Zeta Global by acquiring 415,000 additional shares, raising its total holdings to 705,000 shares valued at approximately $14 million as of September 30 [2][3][7] - Zeta Global now represents 4.6% of Manatuck Hill Partners' reportable assets under management, making it the largest disclosed holding in the fund [4][7] - Zeta Global's stock price has decreased by 26% over the past year, contrasting with the S&P 500's 13% increase during the same period [4] Company Overview - Zeta Global reported a total revenue of $1.2 billion and a net income of -$22.8 million for the trailing twelve months [5] - The company's market capitalization stands at $4.7 billion, with its stock priced at $19.05 as of the last market close [5] Business Model - Zeta Global provides an omnichannel cloud-based marketing platform that includes consumer intelligence, marketing automation, and customer data solutions [9][10] - The company generates revenue through enterprise software subscriptions and data analytics services, utilizing machine learning and proprietary opted-in data sets [9][10] Financial Performance - Zeta Global has shown consistent financial performance, achieving 26% revenue growth to $337 million and generating $47 million in free cash flow, which is an 83% increase year over year [11] - The company has delivered its 17th consecutive beat-and-raise quarter, indicating strong operational momentum despite recent stock price declines [11] Investment Perspective - Manatuck Hill Partners' increased investment in Zeta Global reflects a strategic focus on mid-cap companies with improving fundamentals, suggesting a long-term conviction rather than opportunistic trading [12] - Zeta Global's guidance for 2026 indicates expectations for continued revenue growth of over 20%, which may enhance its path to sustained profitability [13]