Zalando (ZAL) AI Stock Analysis

• Market Cap: €7.29B
• Dividend Yield: N/A
• Average Volume (3M): 1.03M
• Price to Earnings (P/E): 27.0
• Beta (1Y): 1.46
• Revenue Growth: 6.14%
• EPS Growth: 140.08%
• Country: DE
• Employees: 15,463
• Sector: Consumer Cyclical
• Sector Strength: 61
• Industry: Specialty Retail
• EPS (TTM): 0.08
• Shares Outstanding: 264,165,530
• 10 Day Avg. Volume: 995,811
• 30 Day Avg. Volume: 1,033,135
• PEG Ratio: -5.47
• Price to Book (P/B): 3.88
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 78.85
• 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: €36.96
• Price Target Upside: 31.58% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 13

• Rating: 65 Neutral
• Price Target: €29.00 ▲(3.24%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

Competitive Positioning

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

Free Cash Flow and Investor Preference

Zalando is a strongly free cash flow-generative market share winner with opportunities for margin and value expansion, aligning with recent investor preferences.

Market Share Opportunities

Zalando is expected to gain market share due to an acceleration in online penetration rates in the fashion category.

Negative Factors

Consumer Environment

In a tricky consumer environment, it is believed that Zalando will find it difficult to accelerate growth significantly to meet its GMV guide.

Growth Challenges

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

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 (ZAL) is a leading European e-commerce company specializing in fashion and lifestyle products. Founded in 2008 and headquartered in Berlin, Germany, Zalando offers a wide range of clothing, footwear, accessories, and beauty products from a variety of brands. The company serves millions of customers across multiple European countries through its online platforms and apps, providing an extensive selection of products and a seamless shopping experience.

How the Company Makes Money

Zalando makes money primarily through the sale of fashion and lifestyle products on its online platforms. The company's revenue model is based on direct sales from its inventory as well as a platform business model where third-party sellers list and sell their products on Zalando's marketplace. In addition to product sales, Zalando generates revenue through advertising services, allowing brands to promote their products on its platforms. The company also benefits from strategic partnerships with fashion brands and logistics services that enhance its supply chain efficiency and customer reach. Zalando's focus on technological innovation, personalized shopping experiences, and a strong logistics network further contribute to its earnings by improving customer satisfaction and operational efficiency.

Zalando Financial Statement Overview

Summary

Zalando exhibits strong financial health with consistent revenue growth and stable profitability metrics. The cash flow is notably robust, demonstrating efficient operational management. However, the net profit margin has room for improvement, and increased leverage could present risks if profitability declines.

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	10.75B	10.57B	10.14B	10.34B	10.35B	7.98B
Gross Profit	4.39B	4.30B	3.68B	4.06B	4.33B	3.39B
EBITDA	824.80M	811.30M	555.30M	395.30M	648.10M	596.20M
Net Income	269.90M	251.10M	83.00M	16.80M	234.50M	226.10M
Balance Sheet
Total Assets	8.11B	7.98B	8.11B	7.63B	6.90B	6.49B
Cash, Cash Equivalents and Short-Term Investments	2.48B	2.69B	2.62B	2.04B	2.29B	2.69B
Total Debt	1.71B	1.73B	1.85B	1.72B	1.57B	1.77B
Total Liabilities	5.42B	5.32B	5.73B	5.43B	4.68B	4.34B
Stockholders Equity	2.69B	2.67B	2.37B	2.20B	2.22B	2.15B
Cash Flow
Free Cash Flow	454.90M	447.30M	686.30M	108.30M	283.30M	277.30M
Operating Cash Flow	613.10M	654.10M	949.50M	459.90M	616.20M	527.40M
Investing Cash Flow	-639.50M	-269.80M	-320.70M	-476.20M	-335.90M	-217.80M
Financing Cash Flow	-315.70M	-325.60M	-123.60M	-245.90M	-639.80M	1.35B

Zalando Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 28.09
• 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 28.09 is above the 20-day moving average (MA) of 28.00, below the 50-day MA of 30.13, and below the 200-day MA of 31.40, indicating a neutral trend. The MACD of -0.62 indicates Negative momentum. The RSI at 45.30 is Neutral, neither overbought nor oversold. The STOCH value of 68.60 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
ZAL	65 Neutral	€7.29B	27.00	10.57%	―	6.14%	140.08%
TNIE	64 Neutral	€734.45M	50.35	3.90%	―	33.13%	―
Sector *	62 Neutral	$16.90B	11.24	-7.48%	2.95%	1.60%	-23.76%
AG1	56 Neutral	$5.81B	106.31	8.72%	―	24.93%	―
KTA	51 Neutral	€139.06M	8.26	-44.46%	21.64%	-30.93%	-215.26%
MRX	44 Neutral	€46.29M	―	-77.36%	―	-6.33%	-65.26%