Zalando (ZAL) AI Stock Analysis

• Market Cap: €6.49B
• Dividend Yield: N/A
• Average Volume (3M): 1.16M
• Price to Earnings (P/E): 26.9
• Beta (1Y): 1.31
• Revenue Growth: 12.06%
• EPS Growth: 18.20%
• Country: DE
• Employees: 15,463
• Sector: Consumer Cyclical
• Sector Strength: 84
• Industry: Specialty Retail
• EPS (TTM): 0.06
• Shares Outstanding: 264,177,000
• 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: €36.75
• Price Target Upside: 47.12% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 13
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 63 Neutral
• Price Target: €25.00 ▲(0.08% Upside)

Zalando's overall stock score is driven primarily by its strong financial performance, which reflects healthy profitability and growth. However, technical analysis indicates potential bearish trends, and the valuation suggests the stock may be overvalued. The absence of earnings call data and corporate events means these factors do not influence the score.

Positive Factors

Revenue Growth

Consistent revenue growth indicates a strong market position and effective business strategies, supporting long-term expansion and stability.

Cash Generation

Strong cash generation enhances financial flexibility, enabling investments in growth opportunities and providing a buffer against economic downturns.

Profitability

Healthy profit margins reflect efficient cost management and pricing power, contributing to sustainable profitability and competitive advantage.

Negative Factors

Debt Reliance

Moderate reliance on debt could pose financial risks if not managed carefully, potentially impacting long-term financial stability and flexibility.

Free Cash Flow Conversion

While cash flow is strong, improving free cash flow conversion is crucial for maximizing financial efficiency and supporting future growth investments.

Slowing Revenue Growth

Slowing revenue growth may indicate market saturation or increased competition, potentially challenging future expansion and market share gains.

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 its online sales of fashion and lifestyle products. The company's revenue model consists of several key streams: direct sales, where Zalando buys inventory from brands and sells it to consumers; marketplace sales, which allow third-party sellers to list their products on Zalando's platform, earning a commission on each sale; and advertising revenue from brands that promote their products on Zalando's site. Additionally, Zalando has formed strategic partnerships with various fashion brands and retailers, enhancing its product offerings and driving traffic to its platform. The company's focus on customer experience, fast delivery, and return policies also contribute to customer loyalty and repeat purchases, further boosting 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: Positive
• Last Price: 24.98
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For DE:ZAL, the sentiment is Positive. The current price of 24.98 is above the 20-day moving average (MA) of 23.59, above the 50-day MA of 24.13, and below the 200-day MA of 27.43, indicating a neutral trend. The MACD of 0.33 indicates Negative momentum. The RSI at 59.79 is Neutral, neither overbought nor oversold. The STOCH value of 86.00 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for DE:ZAL.

Zalando Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
TNIE	79 Outperform	€1.26B	40.83	8.50%	―	29.34%	―
ZAL	63 Neutral	€6.49B	26.88	9.04%	―	12.06%	18.20%
Sector *	61 Neutral	$18.38B	12.79	-2.54%	3.03%	1.52%	-15.83%
AG1	47 Neutral	$5.90B	73.47	11.87%	―	31.25%	―
YOU	45 Neutral	€1.06B	-10.89	―	―	3.44%	5.93%
KTA	43 Neutral	€131.79M	-1.88	-54.18%	22.83%	-25.17%	-487.87%
MRX	40 Underperform	€42.72M	-0.62	-75.59%	―	-16.95%	-24.45%