Zalando (ZAL) AI Stock Analysis

• Market Cap: €8.08B
• Dividend Yield: N/A
• Average Volume (3M): 977.17K
• Price to Earnings (P/E): 32.2
• Beta (1Y): 1.49
• Revenue Growth: 6.14%
• EPS Growth: 140.08%
• Country: DE
• Employees: 15,463
• Sector: Consumer Cyclical
• Sector Strength: 60
• Industry: Specialty Retail
• EPS (TTM): 0.16
• Shares Outstanding: 264,123,000
• 10 Day Avg. Volume: 817,669
• 30 Day Avg. Volume: 977,168
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): 0.00
• Price to Cash Flow (P/CF): 0.00
• P/FCF Ratio: 0.00
• 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: €38.17
• Price Target Upside: 20.68% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 16

Zalando's score reflects its solid financial performance, especially in terms of revenue growth and cash flow generation. However, technical analysis shows mixed signals with some bearish indicators, and the valuation suggests the stock may be overvalued. The absence of earnings call data and notable corporate events limits further insights, resulting in a moderately positive but cautious overall stock score.

Positive Factors

Customer Growth

Strong customer growth is seen as a clear positive, driving outperformance in GMV and revenue in line with expectations.

Financial Performance

Zalando SE ended the year on a high note with adjusted EBIT approximately 8% above consensus forecasts.

Market Share

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

Negative Factors

Growth Challenges

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

Market Position

Zalando remains too expensive vs. global apparel peers for a mature low growth, low margin business.

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 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 demonstrates solid financial health with positive revenue and cash flow growth, although operational challenges are evident in the EBIT figures. The balance sheet reflects moderate leverage and improved equity utilization. Overall, the company appears to be on a positive trajectory, with strengths in cash generation and profitability improvements.

Income Statement

Zalando's revenue grew by 4.2% from 2023 to 2024, showing positive growth after a slight decline in previous years. The gross profit margin in 2024 was approximately 40.7%, indicating strong profit generation from sales. However, the net profit margin improved to about 2.4%, highlighting cost control improvements despite having zero EBIT in 2024, which could indicate operational challenges.

Balance Sheet

The debt-to-equity ratio in 2024 stands at approximately 0.65, reflecting a moderate level of leverage. ROE has improved to 9.4%, demonstrating better utilization of equity. The equity ratio of 33.4% suggests a balanced structure, but there is room for strengthening equity to enhance financial stability further.

Cash Flow

Free cash flow increased by 49.6% from the previous year, indicating strong cash generation capabilities. The operating cash flow to net income ratio is 2.6, signaling efficient cash conversion. The free cash flow to net income ratio of 1.78 shows robust cash flow relative to net profits, supporting financial health and operational efficiency.

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
	EBIT
0.00	228.80M	102.80M	415.60M	381.70M
	EBITDA
811.30M	555.30M	395.30M	648.10M	596.20M
	Net Income Common Stockholders
251.10M	83.00M	16.80M	234.50M	226.10M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
2.69B	2.62B	2.04B	2.29B	2.69B
	Total Assets
7.98B	8.11B	7.63B	6.90B	6.49B
	Total Debt
1.73B	1.85B	1.72B	1.57B	1.77B
	Net Debt
-862.30M	-681.60M	-308.10M	-712.90M	-875.90M
	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: 31.63
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Positive
• 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 31.63 is below the 20-day moving average (MA) of 32.86, below the 50-day MA of 32.64, and above the 200-day MA of 30.13, indicating a neutral trend. The MACD of -0.31 indicates Positive momentum. The RSI at 44.45 is Neutral, neither overbought nor oversold. The STOCH value of 10.34 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
HFG	67 Neutral	€1.60B	―	-20.86%	―	-1.77%	-361.24%
ZAL	65 Neutral	€8.08B	32.16	10.57%	―	6.14%	140.08%
Sector *	61 Neutral	$6.66B	11.77	3.06%	3.96%	2.60%	-21.54%