Zalando (ZAL) AI Stock Analysis

• Market Cap: €5.93B
• Dividend Yield: N/A
• Average Volume (3M): 1.16M
• Price to Earnings (P/E): 21.9
• Beta (1Y): 1.28
• Revenue Growth: 12.06%
• EPS Growth: 16.97%
• Country: DE
• Employees: 15,463
• Sector: Consumer Cyclical
• Sector Strength: 84
• Industry: Specialty Retail
• EPS (TTM): 0.06
• Shares Outstanding: 264,169,980
• 10 Day Avg. Volume: 1,116,364
• 30 Day Avg. Volume: 1,158,094
• PEG Ratio: 0.16
• Price to Book (P/B): 3.15
• Price to Sales (P/S): 0.79
• P/FCF Ratio: 18.76
• 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: €36.50
• Price Target Upside: 61.65% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 15
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 59 Neutral
• Price Target: €23.00 ▲(1.86% Upside)

Zalando's overall stock score is primarily influenced by its strong financial performance, despite challenges in cash flow management. Technical analysis indicates bearish momentum, which weighs down the score. Valuation is moderate, but the lack of a dividend yield reduces its appeal. The absence of earnings call and corporate events data means these factors do not impact the score.

Positive Factors

Profitability Improvement

The improvement in gross profit margin indicates efficient cost management, which can enhance long-term profitability and competitiveness.

Market Position

As a leading platform in Europe, Zalando benefits from strong brand recognition and a broad customer base, supporting sustained revenue growth.

Revenue Model

The hybrid revenue model diversifies income streams, reducing reliance on a single source and enhancing resilience against market fluctuations.

Negative Factors

Cash Flow Challenges

Significant decline in free cash flow growth may limit Zalando's ability to invest in growth opportunities and manage financial obligations effectively.

Debt Levels

While manageable, the debt level requires careful monitoring to ensure financial stability and maintain flexibility in capital allocation.

Operating Cash Flow

Low operating cash flow relative to net income suggests potential liquidity issues, which could impact the company's ability to fund operations and growth.

Zalando Business Overview & Revenue Model

Company Description

Zalando SE is a leading European online platform for fashion and lifestyle, headquartered in Berlin, Germany. Established in 2008, Zalando offers a diverse range of products, including clothing, footwear, accessories, and beauty items from various brands. The company operates primarily in the e-commerce sector, catering to millions of customers across Europe, and focuses on providing a seamless shopping experience through its extensive product selection and customer-centric services.

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 shows strong profitability with improving margins and a solid balance sheet. However, declining free cash flow growth and low operating cash flow coverage pose potential risks. Continued focus on cash flow management and debt levels will be crucial for sustaining financial health.

Income Statement

Zalando's income statement shows a solid gross profit margin of approximately 40.7% for TTM, indicating efficient cost management. The net profit margin has improved to 2.47% in TTM, reflecting better profitability. Revenue growth is modest at 1.79% for TTM, but it shows a recovery from previous declines. EBIT and EBITDA margins are stable, suggesting consistent operational performance.

Balance Sheet

The balance sheet indicates a moderate debt-to-equity ratio of 0.60 in TTM, showing manageable leverage. Return on equity has improved to 10.17%, demonstrating effective use of equity to generate profits. The equity ratio is stable, suggesting a balanced capital structure. However, the company should monitor its debt levels to maintain financial stability.

Cash Flow

Cash flow analysis reveals a significant decline in free cash flow growth by 47.70% in TTM, which is a concern. The operating cash flow to net income ratio is low at 0.10, indicating potential cash flow challenges. However, the free cash flow to net income ratio remains healthy at 0.57, suggesting that the company is still generating sufficient cash relative to its net income.

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	572.50M	395.30M	660.20M	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: 22.58
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Positive

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 22.58 is below the 20-day moving average (MA) of 25.14, below the 50-day MA of 25.69, and below the 200-day MA of 29.28, indicating a bearish trend. The MACD of -0.95 indicates Positive momentum. The RSI at 34.51 is Neutral, neither overbought nor oversold. The STOCH value of 18.47 is Positive, 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
TNIE	76 Outperform	€1.10B	35.77	8.50%	―	29.34%	―
Sector *	61 Neutral	$18.38B	12.79	-2.54%	3.03%	1.52%	-15.83%
ZAL	59 Neutral	€5.93B	21.92	9.04%	―	12.06%	16.97%
AG1	47 Neutral	$6.43B	93.77	11.87%	―	31.25%	―
MRX	45 Neutral	€49.70M	-0.63	-79.00%	―	-13.09%	-62.53%
YOU	45 Neutral	€1.06B	-10.89	―	―	3.44%	5.93%
KTA	43 Neutral	€145.70M	-1.74	-55.53%	20.57%	-31.15%	-257.40%