Zalando (ZAL) AI Stock Analysis

• Market Cap: €7.10B
• Dividend Yield: N/A
• Average Volume (3M): 977.81K
• Price to Earnings (P/E): 26.3
• Beta (1Y): 1.39
• Revenue Growth: 6.14%
• EPS Growth: 140.08%
• Country: DE
• Employees: 15,463
• Sector: Consumer Cyclical
• Sector Strength: 64
• Industry: Specialty Retail
• EPS (TTM): 0.05
• Shares Outstanding: 264,165,530
• 10 Day Avg. Volume: 954,632
• 30 Day Avg. Volume: 977,813
• PEG Ratio: 3.48
• Price to Book (P/B): 2.52
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 15.62
• 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: €36.73
• Price Target Upside: 37.51% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 13

• Rating: 65 Neutral
• Price Target: €29.00 ▲(8.57%Upside)

Zalando's strong financial performance is the primary positive factor, contributing significantly to the overall score. However, bearish technical indicators and a moderate valuation score detract from the overall attractiveness. The absence of earnings call insights and corporate events means these areas did not influence the score.

Positive Factors

Market Share Opportunities

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.

Strategic Partnerships

The partnership with NEXT is expected to raise awareness for ZEOS's integrated service offering, potentially marking an inflection point for brand and merchant traction.

Negative Factors

Competitive Market

Zalando has a growth problem vs. expectations because online penetration will increase slower than pre-pandemic.

Valuation Concerns

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

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 fashion and lifestyle products via its online platform. The company's revenue model is based on direct sales, where it purchases inventory from brands and designers and sells these products to consumers at a markup. Additionally, Zalando operates a partner program, allowing brands and retailers to sell directly to customers through its platform, from which Zalando earns commission fees on each sale. The company also generates revenue through advertising services offered to brands, providing them with marketing solutions to increase their visibility on Zalando's platform. Key partnerships with renowned fashion brands and strategic logistics and technology collaborations further bolster its earnings by enhancing its value proposition and operational efficiency.

Zalando Financial Statement Overview

Summary

Zalando demonstrates strong financial health with consistent revenue growth and profitability. The balance sheet is stable, though leverage has slightly increased, warranting monitoring. Cash flow metrics are excellent, indicating strong operational efficiency. Improving net profit margins and managing leverage further 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	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	10.57B	10.14B	10.34B	10.35B	7.98B
Gross Profit	4.30B	3.68B	4.06B	4.33B	3.39B
EBITDA	811.30M	555.30M	395.30M	648.10M	596.20M
Net Income	251.10M	83.00M	16.80M	234.50M	226.10M
Balance Sheet
Total Assets	7.98B	8.11B	7.63B	6.90B	6.49B
Cash, Cash Equivalents and Short-Term Investments	2.69B	2.62B	2.04B	2.29B	2.69B
Total Debt	1.73B	1.85B	1.72B	1.57B	1.77B
Total Liabilities	5.32B	5.73B	5.43B	4.68B	4.34B
Stockholders Equity	2.67B	2.37B	2.20B	2.22B	2.15B
Cash Flow
Free Cash Flow	447.30M	686.30M	108.30M	283.30M	277.30M
Operating Cash Flow	654.10M	949.50M	459.90M	616.20M	527.40M
Investing Cash Flow	-269.80M	-320.70M	-476.20M	-335.90M	-217.80M
Financing Cash Flow	-325.60M	-123.60M	-245.90M	-639.80M	1.35B

Zalando Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 26.71
• 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 26.71 is below the 20-day moving average (MA) of 27.95, below the 50-day MA of 28.85, and below the 200-day MA of 31.32, indicating a bearish trend. The MACD of -0.39 indicates Negative momentum. The RSI at 42.14 is Neutral, neither overbought nor oversold. The STOCH value of 23.43 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
TNIE	70 Neutral	€771.23M	52.87	3.90%	―	33.13%	―
ZAL	65 Neutral	€7.10B	26.27	10.57%	―	6.14%	140.08%
Sector *	65 Neutral	€20.20B	10.13	7.83%	3.17%	0.85%	-38.46%
MRX	57 Neutral	€65.36M	―	-77.36%	―	-6.33%	-65.26%
YOU	48 Neutral	€1.15B	―	-47.97%	―	3.44%	5.93%
KTA	47 Neutral	€139.68M	8.26	-44.46%	21.55%	-30.93%	-215.26%
ATOGF	―	$6.32B	110.84	8.72%	―	―	―