Should You Buy Zeta Global Stock Right Now?
Summary
Parkev examines Zeta Global's performance in 2026, noting that the stock has recovered significantly from its April lows of $14 to approximately $26.64. Parkev highlights the company's impressive revenue growth, which scaled from $400 million in 2021 to nearly $1.6 billion in the most recent trailing 12-month period. This growth is complemented by a dramatic improvement in operating profitability, with margins shifting from -60% in 2022 to a positive 3.4% recently, reflecting a broader trend of cost-cutting and leaner operations within the tech sector.
While Zeta Global's return on invested capital (ROIC) remains slightly negative at -0.22%, Parkev is encouraged by the clear trajectory toward profitability. Parkev notes that for an asset-light business model, the path to exceeding the weighted average cost of capital (WACC) of 12.4% looks promising. Based on an updated discounted cash flow model, Parkev projects free cash flow to grow from $260 million in 2026 to $650 million by 2031.
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Reasoning: Parkev values the stock at $28.27 based on a discounted cash flow analysis, which is higher than the current price of $26.64. Parkev points to the company's massive revenue growth from $400M to $1.6B and the improvement in operating margins from -60% to 3.4% as key bullish indicators. Parkev also forecasts free cash flow to reach $650M by 2031, supporting a long-term growth thesis despite the current negative ROIC.