ZETA Loses 22% in a Year: Should You Buy, Sell or Hold the Stock?

Core Insights - Zeta Global Holdings Corp. (ZETA) stock has decreased by 22% over the past year, contrasting with a slight rise in the industry and an 18.3% increase in the Zacks S&P 500 composite [1][7]. Company Performance - Zeta Global has a trailing 12-month return on equity (ROE) of 21.5%, which is higher than the industry average of 15.6%, indicating effective use of shareholder investments [7][8]. - The company holds $385 million in cash with no debt, showcasing strong liquidity, supported by a current ratio of 3.01, significantly above the industry average of 1.59 [10]. Growth Outlook - The Zacks Consensus Estimate for Zeta Global's 2026 revenues is projected at $1.7 billion, reflecting a 34.1% growth from the previous year, while the EPS estimate stands at 99 cents, a 48.5% increase [12]. - Despite a strong revenue and EPS outlook, there has been a downward revision in analyst estimates, with one EPS estimate moving lower and a 4% decrease in the consensus estimate over the past 60 days, indicating a lack of analyst confidence [13]. Competitive Landscape - Zeta Global operates in a competitive environment against established players like Adobe and Salesforce, which have significant advantages in scalability and integrated ecosystems [14][15]. - While Zeta's Athena is positioned as an advanced AI tool, it faces challenges in competing with Salesforce's broader integration capabilities and Adobe's creative suite offerings [15][16]. Strategic Collaboration - Zeta Global has announced a strategic collaboration with OpenAI to enhance its Athena platform, gaining early access to new AI models, which is expected to provide a competitive edge [4][5]. - The collaboration is seen as a validation of Zeta's AI capabilities, with early users reporting improvements in operational efficiency [5][6]. Investment Recommendation - Given the current financial strengths and the strategic partnership with OpenAI, Zeta Global is recommended to be held for now, while caution is advised due to the lack of analyst confidence and competitive pressures [17][18].