Inditex (ITX) AI Stock Analysis

• Market Cap: €176.85B
• Dividend Yield: 2.29%
• Average Volume (3M): 2.45M
• Price to Earnings (P/E): 29.3
• Beta (1Y): 1.22
• Revenue Growth: 4.29%
• EPS Growth: 5.38%
• Country: ES
• Employees: 67,195
• Sector: Consumer Cyclical
• Sector Strength: 84
• Industry: Apparel - Retail
• EPS (TTM): 0.59
• Shares Outstanding: 3,116,652,000
• 10 Day Avg. Volume: 1,883,008
• 30 Day Avg. Volume: 2,451,537
• PEG Ratio: 3.23
• Price to Book (P/B): 8.36
• Price to Sales (P/S): 4.26
• P/FCF Ratio: 23.23
• 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: €58.15
• Price Target Upside: 2.33% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 13
• EPS Forecast (FY): 2.18
• Revenue Forecast (FY): €42.68B

• Rating: 78 Outperform
• Price Target: €65.00 ▲(14.40% Upside)
• Action: Reiterated Date: 09/11/25
• Date: Action: Reiterated 09/11/25

Inditex's strong financial performance is the most significant factor contributing to its overall stock score, reflecting robust revenue growth, high profitability, and financial stability. Technical analysis supports a positive short-term outlook, although the valuation suggests caution due to a high P/E ratio. The absence of earnings call data and corporate events means these factors do not influence the score.

Positive Factors

High profitability and margins

Inditex's 2025 margins (gross 57.85%, net 15.18%, EBIT 19.56%, EBITDA 28.74%) reflect durable operational efficiency and strong cost control across sourcing, logistics and merchandising. Sustained margins support reinvestment in omni-channel capabilities and provide a buffer against retail cycles, preserving long-term profitability.

Very low leverage and strong equity base

A near-zero debt-to-equity ratio and a healthy equity ratio signal minimal financial leverage and substantial balance sheet flexibility. High ROE (29.82%) indicates efficient capital deployment. This financial strength enables sustained investment, acquisitions or shareholder returns while lowering insolvency risk in downturns.

Robust cash generation

Strong free cash flow and conversion metrics show the business consistently turns accounting profits into real cash. Reliable cash generation funds capex, inventory turnover and shareholder returns, supporting continued investment in digital and supply-chain upgrades that sustain competitive advantages over time.

Negative Factors

Slight decline in free cash flow

A year-over-year decline in free cash flow, even if slight, can indicate rising capex or margin pressure. If the trend continues it could limit discretionary spending on expansion, slow buybacks or reduce dividend flexibility, constraining strategic choices over the medium term.

Limited forward disclosure / earnings commentary

The pack notes absence of earnings call data and highlights, reducing visibility into management's near-term guidance and strategic priorities. Limited public commentary makes it harder for investors to assess execution risk and upcoming initiatives, increasing uncertainty across subsequent reporting periods.

Large physical store exposure

A vast global store footprint creates structural fixed costs and exposure to changing consumer shopping patterns and rising e-commerce competition. Maintaining thousands of stores can pressure operating leverage and require continuous investment to keep formats competitive, posing medium-term margin risk.

Inditex Business Overview & Revenue Model

Company Description

Industria de Diseño Textil, S.A. engages in the retail and online distribution of clothing, footwear, accessories, and household textile products through various retail concepts. The company sells its products under the Zara, Pull & Bear, Massimo Dutti, Bershka, Stradivarius, Oysho, and Zara Home brands. It is also involved in the textile manufacturing, logistics, design, insurance, construction, and real estate businesses, as well as provides financial services. The company operates in Spain, rest of Europe, the Americas, and internationally. Industria de Diseño Textil, S.A. was founded in 1963 and is headquartered in A Coruña, Spain.

How the Company Makes Money

Inditex primarily generates revenue through the retail sale of its fashion products in store and online, with a significant portion of its earnings coming from its flagship brand, Zara. The company's revenue model is based on a combination of direct sales from its physical outlets and e-commerce platforms. Inditex operates a vertically integrated supply chain, which allows it to control production, distribution, and inventory management. This efficiency not only reduces costs but also enables the company to respond quickly to changing fashion trends. Key revenue streams include sales from its global network of stores and online sales, with a growing emphasis on digital retailing. Additionally, Inditex benefits from its extensive international presence, which allows it to tap into diverse markets and consumer bases. Strategic partnerships with logistics providers and technology firms also enhance its operational capabilities and customer engagement, further contributing to its overall profitability.

Inditex Financial Statement Overview

Summary

Inditex exhibits strong financial health with consistent revenue growth, high profitability margins, and a robust balance sheet. The company maintains minimal leverage, ensuring financial stability and flexibility. Cash flow generation remains strong, supporting its growth initiatives and shareholder returns. Overall, Inditex is well-positioned in the retail industry with a solid financial foundation.

Income Statement

Inditex has shown robust growth with a consistent increase in total revenue over the years, reaching €38.63 billion in 2025. The gross profit margin for 2025 stands at 57.85%, reflecting effective cost management. The net profit margin is healthy at 15.18%, indicating strong profitability. Both EBIT and EBITDA margins are impressive at 19.56% and 28.74% respectively, highlighting operational efficiency. The revenue growth rate from 2024 to 2025 is 7.48%, showcasing steady growth in a competitive retail environment.

Balance Sheet

Inditex maintains a very low debt-to-equity ratio of 0.0004, indicating minimal leverage and a strong equity position. The return on equity (ROE) is robust at 29.82%, suggesting effective use of shareholders' funds to generate profits. The equity ratio is healthy at 56.67%, highlighting a strong balance sheet and financial stability.

Cash Flow

The free cash flow for 2025 is €6.62 billion, with a slight decrease from the previous year, reflecting strategic capital expenditures. The operating cash flow to net income ratio is 1.58, indicating strong cash generation relative to profit. The free cash flow to net income ratio is 1.13, showing that the company effectively converts its profits into cash.

Breakdown	TTM	Jan 2026	Jan 2025	Jan 2024	Jan 2023	Jan 2022
Income Statement
Total Revenue	38.92B	38.63B	35.95B	32.57B	27.72B	20.40B
Gross Profit	22.50B	22.34B	17.86B	18.56B	15.81B	11.39B
EBITDA	10.87B	10.95B	9.97B	8.22B	5.56B	4.24B
Net Income	5.89B	5.87B	5.38B	4.13B	3.24B	1.11B
Balance Sheet
Total Assets	34.05B	34.71B	32.73B	29.98B	28.95B	26.42B
Cash, Cash Equivalents and Short-Term Investments	10.01B	11.50B	11.42B	10.08B	9.39B	7.57B
Total Debt	5.59B	5.91B	5.57B	5.45B	6.01B	6.35B
Total Liabilities	17.09B	15.04B	14.06B	12.95B	13.19B	11.87B
Stockholders Equity	16.95B	19.68B	18.64B	17.01B	15.73B	14.52B
Cash Flow
Free Cash Flow	6.40B	7.08B	7.27B	5.65B	6.09B	2.55B
Operating Cash Flow	8.59B	9.29B	8.67B	6.67B	6.75B	3.02B
Investing Cash Flow	-2.47B	-3.29B	-1.71B	-3.50B	-3.25B	2.51B
Financing Cash Flow	-6.88B	-6.61B	-5.47B	-4.61B	-3.91B	-2.79B

Inditex Technical Analysis

• Technical Analysis Sentiment: Neutral
• Last Price: 56.82
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For ES:ITX, the sentiment is Neutral. The current price of 56.82 is below the 20-day moving average (MA) of 56.99, above the 50-day MA of 56.31, and above the 200-day MA of 48.34, indicating a neutral trend. The MACD of 0.44 indicates Positive momentum. The RSI at 51.44 is Neutral, neither overbought nor oversold. The STOCH value of 35.87 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for ES:ITX.

Inditex Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
ITX	78 Outperform	€176.85B	29.31	32.70%	2.29%	4.29%	5.38%
Sector *	61 Neutral	$18.38B	12.79	-2.54%	3.03%	1.52%	-15.83%
ADZ	53 Neutral	€53.01M	58.43	―	―	7.76%	24.40%