- Wondering if Zeta Global Holdings at around US$15.79 is offering value or asking too much? This article walks through what the current price might be saying about the stock.
- The share price has declined around 1.8% over the last week and 12.5% over the last month, yet it still shows a 20.1% return over the past year and 55.0% over three years, which gives a mixed picture of recent momentum.
- Recent coverage has focused on Zeta Global Holdings as a software player with a stock that has pulled back year to date by 20.7%, while still sitting on a positive multi year return. This naturally raises questions about what is already priced in. These moves have put extra attention on whether current expectations align with the company’s fundamentals and long term prospects.
- On Simply Wall St’s valuation checks, Zeta Global Holdings holds a 5 out of 6 value score, and the rest of this article will walk through what different valuation methods say about that number, before finishing with a broader way to think about whether the stock fits your own view of value.
Approach 1: Zeta Global Holdings Discounted Cash Flow (DCF) Analysis
A Discounted Cash Flow model takes the cash flows a company is expected to generate in the future and discounts them back to today’s dollars, to estimate what the entire business might be worth right now.
For Zeta Global Holdings, the model used is a 2 Stage Free Cash Flow to Equity approach based on cash flow projections. The latest twelve month Free Cash Flow is about $151 million. Analysts provide forecasts out to 2027, with Simply Wall St extrapolating beyond that to build a ten year path of Free Cash Flow. On these projections, Free Cash Flow in 2026 is modeled at $230.9 million and in 2035 at $547.4 million, both in $.
By discounting each of these projected cash flows back to today and aggregating them, the DCF model arrives at an estimated intrinsic value of about $29.98 per share. Compared with the recent share price around $15.79, this output suggests the shares are trading at a 47.3% discount to that DCF estimate, which indicates that the stock screens as undervalued using this method.
Result: UNDERVALUED
Our Discounted Cash Flow (DCF) analysis suggests Zeta Global Holdings is undervalued by 47.3%. Track this in your watchlist or portfolio, or discover 62 more high quality undervalued stocks.
Approach 2: Zeta Global Holdings Price vs Sales
For companies where investors focus on revenue rather than current earnings, the P/S ratio is often a useful yardstick because it relates the share price to the sales the business is already generating. Higher growth expectations or lower perceived risk usually justify a higher P/S multiple, while slower growth or higher risk tend to point to a lower, more cautious range.
Zeta Global Holdings currently trades on a P/S of 2.95x. This sits below the broader Software industry average P/S of 3.56x and also below the peer group average of 4.60x. Simply Wall St’s Fair Ratio for Zeta Global Holdings is 4.57x. This Fair Ratio is a proprietary estimate of what the P/S might be, given factors such as the company’s earnings growth profile, its industry, profit margins, market cap and company specific risks.
Compared with a simple industry or peer comparison, the Fair Ratio can offer more context because it adjusts for those fundamentals rather than assuming all software names deserve the same multiple. Setting the current P/S of 2.95x against the Fair Ratio of 4.57x suggests the shares appear undervalued on this metric.
Result: UNDERVALUED
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Upgrade Your Decision Making: Choose your Zeta Global Holdings Narrative
Earlier it was mentioned that there is an even better way to think about valuation. This is where Narratives come in: a simple way for you to attach a clear story about Zeta Global Holdings to concrete numbers like your own fair value estimate, and assumptions for future revenue, earnings and margins. You can then compare that fair value to the current price on Simply Wall St’s Community page, where Narratives are updated as new news or earnings arrive. For Zeta Global Holdings, you might align with a more cautious view that sees fair value around US$23.00 based on a 21.7% assumed annual revenue growth rate, a move in profit margin from a 2.4% loss to 7.8% by 2029 and a 44.0x P/E. Alternatively, you might lean toward a more optimistic view closer to US$40.22 to US$41.34, with revenue growth assumptions near 19.8% to 23.3%, higher profit margins and different future P/E multiples. Using Narratives, you can see these stories side by side, decide which set of assumptions best matches your own expectations and use that to frame whether the current share price looks high, low or roughly in line with your view.
Do you think there's more to the story for Zeta Global Holdings? Head over to our Community to see what others are saying!
This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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