re: a thread for ZETA

the options chain is getting spicy. Supposedly there’s another announcement coming at 4pm today.

looks like the announcement is that Alex Karp (PLTR) will keynote the event tomorrow with the ZETA CEO. The topic is enterprise AI sovereignty. This aligns with the anticipated AthenaOS release. Stock is at 34 AH. This is as much momentum as this company has ever had.

analyst upgrades today after Zeta Live

Canaccord: $30 > $37
Needham: $30 > $40
KeyBanc: $27 > $38
Truist: $30 > $38

Fiorillo again, seeking alpha

LINK

quote:

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My January thesis held that ZETA was accelerating revenue growth, expanding margins, and scaling FCF at a valuation that ignored all three, and that thesis has only strengthened as the shares doubled. Q2 brought the 20th consecutive beat and raise quarter, the first quarter of positive GAAP net income, and a Rule of 64, with guidance raised on every line. Since then Zeta has hired a CMO and a U.K. president from Salesforce, opened a London hub, acquired the engine behind its GEO product along with a European identity company, and then unveiled AthenaOS, Athena MCP, AIM and a chip partnership at Zeta Live. David Steinberg told Amit and me he believes Zeta is building a $10 billion revenue business with a 30% operating margin, and if that comes true, today’s $8.29 billion market cap looks like a rounding error. ZETA trades at 32.5x 2026 FCF guidance and 22.3x the 2028 FCF target with nothing from Palantir, OpenAI, AthenaOS, or the acquisitions included in the numbers. Q3 earnings are the next catalyst, and ZETA remains a position in my growth portfolio that I intend to keep adding to on pullbacks.

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CRM (salesforce) has acquired BRZE (braze, a ZETA competitor) for $5.66B in cash

BRZE
Revenue Growth TTM: 27.44%
P/S TTM: 6.8x (based on $5.66B acquisition price)
P/FCF TTM: 66.9x (based on $5.66B acquisition price)

ZETA
Revenue Growth TTM: 35.91%
P/S TTM: 5.19x
P/FCF TTM: 36.4x

Have a look at those FCF multiples. ZETA is still undervalued

$CRM has spent $11B this fiscal year on acquisitions. It is this very model (bolt on services with inherent latencies and silos) that ZETA and PLTR are attacking.

the addressable market is massive

Thanks for keeping this thread going. Been a good addition to the port so far

this “shots fired” article by ZETA investor relations is highly unusual. The release fingers legacy SaaS as a dinosaur and points at a (much larger) competitor by name.

I have to believe that they know something we don’t about the current RFP pipeline as legacy subscriptions start to sunset. It may be as simple as select companies no longer auto-renewing and putting their OS software out for bid, which for ZETA is the opportunity and perhaps an opportunity that they thought they’d have to fight for but now are being solicited

if ZETA gets an audience and they bring PLTR with them they tend to win the deal. What PLTR has made possible is nearly seamless and painless onboarding. If you’ve ever worked at a big company you know two things are true

1) they are very hesitant to change software
2) when they do it’s usually a clusterfrick

That’s no longer an issue

also, the press release was pretty specifically targeted to analysts…this is an “analyst release”. It doesn’t take much math to see that if ZETA is saying at a 6.x TTM P/S multiple their share price would be almost $50, then their TTM revenue (Q1/2/3 actual plus Q4 projected) will be much higher than they’ve guided for.

838MM 1st half actual plus 980MM guided 2nd half doesn’t get there. It would have to be well over 2B to reach $50 at 6X sales

no

ZETA just posted this job opening



earnings in a couple of weeks. They are going to have to raise guidance; if they don’t everything they’ve been saying is bullshite. And I don’t think it’s bullshite

here are the details of the two small acquisitions ZETA made earlier this month

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694,000 new shares issued, 23MM value. 0.31% dilution. Both C suites transition over to ZETA along with the full engineering teams.