Zalando (ZAL) AI Stock Analysis

• Market Cap: €6.28B
• Dividend Yield: N/A
• Average Volume (3M): 1.21M
• Price to Earnings (P/E): 23.3
• Beta (1Y): 1.37
• Revenue Growth: 7.12%
• EPS Growth: 78.28%
• Country: DE
• Employees: 15,463
• Sector: Consumer Cyclical
• Sector Strength: 68
• Industry: Specialty Retail
• EPS (TTM): 0.37
• Shares Outstanding: 264,165,530
• 10 Day Avg. Volume: 1,731,255
• 30 Day Avg. Volume: 1,209,832
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): N/A
• P/FCF Ratio: N/A
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: €33.69
• Price Target Upside: 38.53% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 17

• Rating: 60 Neutral
• Price Target: €25.00 ▲(2.80% Upside)

Zalando's overall stock score reflects strong financial performance with improving profitability and a solid balance sheet. However, technical indicators suggest a bearish trend, and the valuation is moderate without a dividend yield. The absence of earnings call data and corporate events limits additional insights.

Positive Factors

Competitive Position

Competitive pressure from companies like Shein and Temu has eased, which could benefit Zalando's market position.

Investor Confidence

The analyst raises the DCF-based price target for Zalando SE to €43.00, indicating increased confidence in the company's medium-term targets.

Market Share Expansion

Zalando offers substantial market share opportunities due to its class-leading operational service, a wide selection of brands, and a strong position in faster-growing categories.

Negative Factors

German Market Demand

A bounce back in German demand is temporary not structural.

Growth Challenges

Zalando remains an expensive mature business with growth expectations that are too high.

Valuation Concerns

The stock still trades on a high price-to-earnings ratio, which challenges the growth expectations.

Zalando Business Overview & Revenue Model

Company Description

Zalando SE operates an online platform for fashion and lifestyle products. It provides clothing, footwear, accessories, and beauty products with free delivery and returns. The company also sells its products through its Zalando Lounge; and brick-and-mortar outlet stores in Berlin, Frankfurt, Cologne, Leipzig, Hamburg, Hanover, Münster, Stuttgart, Mannheim, and Ulm. It serves customers in 23 countries, including Austria, Belgium, Croatia, Czechia, Denmark, Estonia, Finland, France, Germany, Ireland, Italy, Latvia, Lithuania, Luxembourg, the Netherlands, Norway, Poland, Slovakia, Slovenia, Spain, Sweden, Switzerland, and the United Kingdom. The company was founded in 2008 and is headquartered in Berlin, Germany.

How the Company Makes Money

Zalando generates revenue primarily through the sale of products on its platform, which includes both direct sales and commission-based sales from partner brands. The company operates under a hybrid model, where it sells products directly from its inventory and also acts as a marketplace for third-party sellers. Key revenue streams include the sale of branded merchandise, commission fees from partner brands, and logistics services. Additionally, Zalando has established partnerships with various fashion brands and retailers, enhancing its product offerings and driving traffic to its platform. The company's effectiveness in marketing, customer engagement, and inventory management also significantly contributes to its earnings.

Zalando Financial Statement Overview

Summary

Zalando's financial health is strong with consistent revenue growth and profitability. The balance sheet is stable, though leverage has increased slightly, which should be monitored. Cash flow metrics are excellent, indicating strong operational efficiency. Continued focus on improving net profit margins and managing leverage will enhance financial stability.

Income Statement

Zalando has shown consistent revenue growth with a notable increase from 2020 to 2025. The TTM Gross Profit Margin stands at 40.86% and the Net Profit Margin at 2.51%, reflecting strong profitability. The EBIT margin is 3.83%, and the EBITDA Margin is 7.67%, both indicating healthy operational efficiency. While margins are stable, the net profit margin shows room for improvement.

Balance Sheet

The debt-to-equity ratio is 0.64, indicating a manageable level of debt relative to equity. The return on equity (ROE) is 10.04%, showcasing effective use of shareholders' funds. The equity ratio is 33.17%, suggesting a balanced capital structure. However, the company's leverage has increased from previous years, which could pose a risk if profitability decreases.

Cash Flow

Zalando's cash flow is robust with a Free Cash Flow to Net Income Ratio of 1.69, indicating strong cash generation from operations. The Operating Cash Flow to Net Income Ratio is 2.27, further emphasizing efficient cash conversion. There is a positive Free Cash Flow Growth Rate, highlighting strong cash flow management and growth.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	10.94B	10.57B	10.14B	10.34B	10.35B	7.98B
Gross Profit	4.45B	4.30B	3.68B	4.06B	4.33B	3.39B
EBITDA	840.50M	811.30M	555.30M	395.30M	648.10M	596.20M
Net Income	270.80M	251.10M	83.00M	16.80M	234.50M	226.10M
Balance Sheet
Total Assets	8.13B	7.98B	8.11B	7.63B	6.90B	6.49B
Cash, Cash Equivalents and Short-Term Investments	2.66B	2.69B	2.62B	2.04B	2.29B	2.69B
Total Debt	1.68B	1.73B	1.85B	1.72B	1.57B	1.77B
Total Liabilities	5.34B	5.32B	5.73B	5.43B	4.68B	4.34B
Stockholders Equity	2.79B	2.67B	2.37B	2.20B	2.22B	2.15B
Cash Flow
Free Cash Flow	237.90M	447.30M	686.30M	108.30M	283.30M	277.30M
Operating Cash Flow	415.20M	654.10M	949.50M	459.90M	616.20M	527.40M
Investing Cash Flow	-652.30M	-269.80M	-320.70M	-476.20M	-335.90M	-217.80M
Financing Cash Flow	-145.50M	-325.60M	-123.60M	-245.90M	-639.80M	1.35B

Zalando Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 24.32
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For DE:ZAL, the sentiment is Negative. The current price of 24.32 is below the 20-day moving average (MA) of 24.69, below the 50-day MA of 26.54, and below the 200-day MA of 30.89, indicating a bearish trend. The MACD of -1.01 indicates Negative momentum. The RSI at 42.97 is Neutral, neither overbought nor oversold. The STOCH value of 66.46 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for DE:ZAL.

Zalando Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
Sector *	67 Neutral	¥284.31B	15.32	6.82%	2.48%	5.05%	-19.67%
TNIE	62 Neutral	€735.72M	51.22	3.90%	―	33.13%	―
ZAL	60 Neutral	€6.28B	23.34	10.35%	―	7.12%	78.28%
KTA	52 Neutral	€161.26M	8.26	-55.53%	18.71%	-31.15%	-257.40%
MRX	51 Neutral	€64.17M	―	-77.36%	―	-6.33%	-65.26%
YOU	46 Neutral	€1.07B	―	-47.97%	―	3.44%	5.93%
ATOGF	―	$7.49B	127.19	8.72%	―	―	―