Is ZETA Worth Buying Now as Growth Surges but Valuation Stays Rich?

ZETA's Growth Is Outpacing Its Long-Term Model

Super-scaled customers reached 197 in the second quarter of 2026, up 17% from 168 a year earlier. Super-scaled customer average revenue per user also increased 17% to $1.8 million.

That customer-count growth is well above the 4%-8% compound annual growth rate embedded in Zeta's 2028 model. ARPU growth also exceeded the model's 12%-16% range, suggesting current customer economics are running ahead of the company's longer-term framework.

Zeta's Valuation Leaves Less Room for Error

ZETA trades at 22.9X forward 12-month earnings, above the 21.01X multiple for its Zacks sub-industry, 18.11X for its sector and 20.71X for the S&P 500.

                                                                          Image Source: Zacks Investment Research

                                                                           Image Source: Zacks Investment Research

                                                                          Image Source: Zacks Investment Research

The premium is not extreme relative to the sub-industry, but it reduces the margin for execution misses. Sustaining faster revenue growth, expanding margins and converting more earnings into cash become more important when investors are already paying above broader sector and market benchmarks.

ZETA's AI and Cross-Sell Catalysts Stay Intact

Customers using more than one use case increased 90% year over year in the second quarter, while cross-sell and upsell deals won rose 43%. Customers using at least five channels also increased 50%, reinforcing the case that Zeta can deepen relationships as adoption expands across its platform.

Snowflake Inc. SNOW provides a relevant AI-infrastructure comparison because its platform powers an AI Data Cloud spanning data engineering, analytics and AI. Palantir Technologies Inc. PLTR is another useful reference point because its Artificial Intelligence Platform is designed to connect AI with enterprise data and operations. Zeta has highlighted collaborations with both companies as it develops Athena and its broader AI infrastructure strategy.

Zeta's Execution Risks Argue for Patience

Zeta generated $8.2 million of GAAP net income in the second quarter after a $12.8 million loss a year earlier. It also raised full-year 2026 GAAP earnings guidance to 9-11 cents per share and lifted adjusted EBITDA guidance to $404.1-$406.3 million.

Execution still matters. Zeta's filings identify acquisition integration, including Marigold's Enterprise Business, as a risk, while macroeconomic weakness and softer consumer spending could affect customer activity. Long sales cycles can also make the timing of new revenue uneven, adding another source of quarter-to-quarter variability.

ZETA's Growth Score Offsets Weak Momentum

The operating picture supports continued attention, but the valuation and execution setup favors a measured stance rather than an aggressive entry.

ZETA currently carries a Zacks Rank #3 (Hold), which is consistent with a neutral near-term signal rather than a clear buy call. You can see the complete list of today’s Zacks #1 Rank stocks here.

ZETA has a Growth Score of A, reflecting favorable growth characteristics, but a Value Score of D and Momentum Score of F are less supportive. Its VGM Score of C points to a mixed combined profile. For investors, that combination supports patience until earnings, margins and cash generation provide more evidence that the premium valuation can be sustained.

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This article originally published on Zacks Investment Research (zacks.com).

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