Over the past six months, Zeta Global has been a great trade, beating the S&P 500 by 22.2%. Its stock price has climbed to $21.58, representing a healthy 37.8% increase. This was partly due to its solid quarterly results, and the run-up might have investors contemplating their next move.

Is now still a good time to buy ZETA? Or is this a case of a company fueled by heightened investor enthusiasm? Find out in our full research report, it’s free.

Why Is ZETA a Good Business?

Powered by an AI engine that processes over one trillion consumer signals monthly, Zeta Global (NYSE: ZETA) operates a data-driven cloud platform that helps companies target, connect, and engage with consumers through personalized marketing across channels like email, social media, and video.

1. Billings Surge, Boosting Cash On Hand

Billings is a non-GAAP metric that is often called “cash revenue” because it shows how much money the company has collected from customers in a certain period. This is different from revenue, which must be recognized in pieces over the length of a contract.

Zeta Global’s billings punched in at $306.3 million in Q2, and over the last four quarters, its year-on-year growth averaged 40.6%. This performance was fantastic, indicating robust customer demand. The high level of cash collected from customers also enhances liquidity and provides a solid foundation for future investments and growth.

2. Wall Street Expects Impressive Revenue Gains

Forecasted revenues by Wall Street analysts signal a company’s potential. Predictions may not always be accurate, but accelerating growth typically boosts valuation multiples and stock prices while slowing growth does the opposite, though some deceleration is natural as businesses become larger.

Over the next 12 months, sell-side analysts expect Zeta Global’s revenue to rise by 17.9%. While this projection is below its 32.7% annualized growth rate for the past two years, it is healthy and indicates the market sees success for its products and services.

3. Customer Acquisition Costs Are Recovered in Record Time

The customer acquisition cost (CAC) payback period represents the months required to recover the cost of acquiring a new customer. Essentially, it’s the break-even point for sales and marketing investments. A shorter CAC payback period is ideal, as it implies better returns on investment and business scalability.

Zeta Global is extremely efficient at acquiring new customers, and its CAC payback period checked in at 4.6 months this quarter. The company’s rapid recovery of its customer acquisition costs indicates it has a highly differentiated product offering and a strong brand reputation. These dynamics give Zeta Global more resources to pursue new product initiatives while maintaining the flexibility to increase its sales and marketing investments.

Final Judgment

These are just a few reasons Zeta Global is a rock-solid business worth owning, and with its shares topping the market in recent months, the stock trades at 3.4× forward price-to-sales (or $21.58 per share). Is now a good time to buy? See for yourself in our comprehensive research report, it’s free.

Stocks We Like Even More Than Zeta Global

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