Hot Picks: Why Pegasystems, Monday.com and Zeta Global may be poised for growth

Three established software companies that once ranked among the market’s fastest-growing names are now trading at muted valuations despite strengthening fundamentals, according to a leading technology analyst. He says each name is benefiting from AI tailwinds but has been largely ignored as investors chase newer trends.

BNN Bloomberg spoke with Gil Luria, head of technology research at D.A. Davidson, who outlined why Pegasystems, Monday.com and Zeta Global are positioned to accelerate growth as demand rises for automation, collaboration and targeted marketing tools.

Key Takeaways

• Many mature software companies have improved profitability even as valuations compress amid investor focus on AI.
• Pegasystems is using AI to speed deployments and shorten sales cycles, supporting accelerating growth.
• Monday.com is moving up market into larger enterprise deals, creating near-term volatility but sustainable long-term growth.
• Zeta Global offers marketing tools that help companies reach consumers without relying on Meta or Google’s data ecosystems.
• All three companies trade at modest cash-flow multiples despite solid double-digit revenue increases.

Read the full transcript below:

ANDREW: Hot Picks today — we’re going to focus on technology, and our guest has selected three stocks he says are forgotten software leaders. We’re joined by Gil Luria, head of technology research at D.A. Davidson. This is intriguing. So these are companies that once were go-go software stocks but have been neglected lately?

GIL: Yes. A couple of things have happened the last few years, especially the last couple of years. Software companies have matured and increased their profitability significantly, while at the same time investors are so preoccupied with AI that multiples on software companies have gone down a lot. So you have some of these great software companies that are market leaders, that are growing double digits — sometimes even 20 per cent — trading at only 20 times cash flow. And those are the three that we picked for today — great companies doing well, accelerating revenue, and yet the market is only putting a 20-times cash-flow multiple on them. So that’s why we find these three particularly intriguing.

ANDREW: Tell us about your first name, Pegasystems — PEGA on Nasdaq.

GIL: This is a company that’s been around for a long time. They help automate work. They create tools for companies to automate complicated, long workflows, and they’ve adapted really well to the age of AI. It helps them sell the product more, it helps them deploy it faster for their customers. They’re now seeing accelerating growth, and yet their multiple remains very low. It’s a great company that’s been around for a while, is evolving well and is very attractively priced right now.

ANDREW: Monday.com — a collaboration software company. Again, you think the market is neglecting this one.

GIL: It used to be a darling, but it’s been hit the last couple of quarters as it goes through a transition from only serving small and medium-sized businesses to serving larger and larger customers. As they make that transition, growth has decelerated a little, but they’re still growing more than 20 per cent. We think that’s sustainable, and again they’re now trading at a very attractive multiple.

ANDREW: And isn’t that fascinating. We’ve seen a couple of our software darlings here — well, they’re IT services darlings — Constellation Software and CGI here in Canada. People have been dumping those. They’ve been hitting their lowest price in at least a year. And then finally, Zeta Global — ZETA. Again, you feel that investors have turned their back unjustifiably on this one.

GIL: The growth here is completely unimpeded — again, it’s in the 20s. Zeta helps marketing organizations with their marketing flow: finding customers, serving them, helping get engagement with those consumers. They’re doing a great job of that, helping companies connect with their advertising agencies. The growth is unimpeded. The stock is still depressed, still trading in the 20s on cash flow. We think that as investors see them grow year in and year out, they’re going to give this stock a lot more value.

ANDREW: And part of their approach is helping companies reach consumers without having to go through the gatekeepers, Meta and Alphabet?

GIL: That’s exactly right. They have a consumer graph that’s independent of Meta’s and Google’s. A lot of advertisers and marketing agencies are reluctant to hand off all of their marketing to these two digital advertisers, and Zeta gives them a great alternative because they have this independent perspective on where consumers are.

ANDREW: That’s interesting — just with their own data and big-data crunching?

GIL: That’s right. They have a way to collect consumer information on the web. They’ve been doing it for several years. It’s very proprietary — only they have access to that data — and that’s how they provide value for marketing organizations and digital advertising agencies.

ANDREW: I want to loop back to Monday.com, if I could. They are growing revenue — apparently in the latest quarter it was up 26 per cent year-on-year — but the beat was lower than the average in the previous four quarters, and the fourth-quarter revenue forecast missed expectations. Are there cracks emerging in the Monday.com model?

GIL: We don’t think so. We really think this is about that transition. Their product is now so good they’re not just serving small businesses that don’t have an alternative for collaboration software. They’re starting to get business with large companies instead of Smartsheet, which was the incumbent, or Salesforce, which is an incumbent. They’re starting to get bigger and bigger deals. Those deals are less predictable in their timing, and if they have just a couple of these really large deals slip a quarter or two, that’s why growth may not be quite as fast right now. We think it’s a transition period. They’ll resume that very fast growth they are currently experiencing soon enough, and that’s worth a lot more than it’s trading at right now.

ANDREW: It’s interesting how the power of Google and Meta keeps coming up. I’m looking at one analyst commentary here — Google made changes to its search algorithm, and Monday.com switched to new marketing channels, and they say that’s been working out. But it raises questions about how much sway companies like Google and Meta should have over the internet.

GIL: That’s right, and that’s why the Department of Justice is trying to break it up — so far unsuccessfully. But Google has so much market power that anytime it tweaks its algorithm, it messes up businesses across the board. That’s what’s happened here. As they transition from traditional search to AI-driven search, they changed their algorithm. As an advertiser, all of a sudden you wake up in the morning and realize your yields are different. That contributed to Monday’s transition issues — that funnel changes. That doesn’t mean companies from Nordstrom to Groupon to Monday.com can’t adapt. It’s just that Google writes the rules of the road, which is why there’s so much push from the Department of Justice in the United States to break that up.

ANDREW: I guess one thing — maybe you and I have talked about this before — people do searches now and just look at the AI’s answer. They don’t bother clicking through to the underlying websites.

GIL: Yes, but that doesn’t mean there isn’t advertising. Google’s results haven’t dipped at all as they’ve made the transition. They continue to advertise. They understand how to work through the transition — it’s everyone else who has to catch up. Google continues to grow — in fact, it had accelerating growth in spite of this move to AI-driven search. It’s just that they were prepared for the transition. Everybody else gets caught off-guard anytime Google makes a change.

ANDREW: Gil, thank you very much indeed. Really appreciate it. Gil Luria, head of technology research at D.A. Davidson.

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This BNN Bloomberg summary and transcript of the Nov. 13, 2025 interview with Gil Luria are published with the assistance of AI. Original research, interview questions and added context was created by BNN Bloomberg journalists. An editor also reviewed this material before it was published to ensure its accuracy and adherence with BNN Bloomberg editorial policies and standards.