Copyright fool
Shares of artificial intelligence (AI)-powered customer data platform and advertising upstart Zeta Global (ZETA +16.08%) are up 14% as of 11 a.m. ET on Wednesday, according to data provided by S&P Global Market Intelligence. The founder-led company reported earnings Tuesday afternoon and delivered its 17th consecutive quarter of beat-and-raise results.Zeta grew sales and free cash flow (FCF) by 26% and 83% respectively, while its customer count grew by more than 20% as well. Rounding out an excellent third-quarter earnings call, management guided for sales growth of at least 20% in 2026 -- which would be its sixth straight year of achieving this feat. Zeta: Incredible growth and incoming profitability Zeta's AI-marketing capabilities are quickly becoming a staple among mega-enterprises, with the stock counting 44% of the Fortune 100 as customers. Launching its new conversational AI agent, Athena, in Q3, Zeta continues to launch full speed ahead into inundating the advertising world with artificial intelligence. The company remains a leader in this next-gen advertising niche, according to global research firm Forrester, which gave Zeta the highest score possible in 13 of 22 possible categories. On top of this qualitative success, Zeta is now on the precipice of profitability, with its net income margin rising from -40% to -4% over the last three years. This improving margin shows that the company's operations are scaling tremendously well, with stock-based compensation expected to equal 15% in 2025 -- down from 51% in 2022. Is Zeta a buy? Though Zeta's operations are very tech-dense and somewhat hard to decipher for anyone not tuned into the marketing technology world, its leadership rankings, high net promoter scores, and rapid growth make it look like a potential Rule Breaker. Trading at just 29 times forward earnings despite its impressive growth, Zeta is on my short list.
