What Happened?
Shares of advertising and marketing company Zeta Global (NYSE: ZETA) jumped 27% in the afternoon session after the company reported stellar second-quarter earnings that surpassed expectations and raised its financial outlook for the full year. The artificial intelligence marketing firm posted second-quarter revenue of $308.4 million, which sailed past analyst forecasts. This result represented a 35% jump compared to the same period last year. The company's profitability also improved, as its adjusted EBITDA, a measure of operational profit, soared by 52% year-over-year, which pointed to robust margin expansion. Following the strong performance, management boosted its revenue guidance for both the upcoming third quarter and the full year 2025, signaling confidence in continued momentum.
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What Is The Market Telling Us
Zeta’s shares are extremely volatile and have had 49 moves greater than 5% over the last year. But moves this big are rare even for Zeta and indicate this news significantly impacted the market’s perception of the business.
The previous big move we wrote about was 14 days ago when the stock gained 3.6% on the news that analyst firm DA Davidson reiterated its "Buy" rating and a $25 price target on the marketing technology company's stock. The firm noted a "better than feared macro backdrop" and pointed to Zeta's history of conservative guidance, suggesting the company could be positioned for its 16th consecutive quarter of beating expectations. Analysts at DA Davidson highlighted potential growth drivers for the quarter, including increased contributions from agencies and higher average revenue per user (ARPU) from existing customers. The report characterized Zeta Global as an "undervalued disrupter" in its sector. This positive commentary followed a strong recent performance for the stock and came ahead of the company's second-quarter earnings release, which was scheduled for July 30th.
Zeta is up 6.3% since the beginning of the year, but at $19.92 per share, it is still trading 45.8% below its 52-week high of $36.74 from November 2024. Investors who bought $1,000 worth of Zeta’s shares at the IPO in June 2021 would now be looking at an investment worth $2,241.
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