Zalando SE (ZLNDY) AI Stock Analysis

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Zalando SE

(OTC:ZLNDY)

73Outperform

Zalando SE's stock is moderately attractive, with solid financial health and positive strategic initiatives. The financial performance shows consistent revenue growth and manageable leverage, though operational efficiency needs improvement. Technical analysis indicates mixed momentum, and the valuation suggests a slightly overvalued stock with high growth expectations. The positive earnings call reinforces the company's growth potential, particularly through strategic acquisitions and segment expansions.

Zalando SE (ZLNDY) vs. S&P 500 (SPY)

Market Cap

$9.41B

Dividend YieldN/A

Average Volume (3M)1.37K

Price to Earnings (P/E)34.7

Beta (1Y)1.35

Revenue Growth4.18%

EPS Growth201.10%

CountryUS

Employees15,309

SectorConsumer Cyclical

Sector Strength62

IndustrySpecialty Retail

Share Statistics

EPS (TTM)0.26

Shares Outstanding528,246,000

10 Day Avg. Volume4,123

30 Day Avg. Volume1,374

Financial Highlights & Ratios

PEG RatioN/A

Price to Book (P/B)N/A

Price to Sales (P/S)0.91

Price to Cash Flow (P/CF)N/A

P/FCF Ratio0.00

Enterprise Value/Market CapN/A

Enterprise Value/RevenueN/A

Enterprise Value/Gross ProfitN/A

Enterprise Value/EbitdaN/A

Forecast

1Y Price TargetN/A

Price Target UpsideN/A

Rating ConsensusN/A

Number of Analyst Covering0

Zalando SE Business Overview & Revenue Model

Company DescriptionZalando SE is a leading European e-commerce company specializing in the fashion and lifestyle sectors. Established in 2008 and headquartered in Berlin, Germany, Zalando operates an online platform offering a wide range of products including apparel, footwear, accessories, and beauty products. The company caters to diverse customer needs by providing an extensive assortment of international and local brands, alongside its own private label offerings. Zalando is committed to delivering a seamless shopping experience across its digital platforms, supported by its robust logistics and customer care services.

How the Company Makes MoneyZalando SE generates revenue primarily through the sale of fashion and lifestyle products on its online platform. The company's key revenue streams include direct sales from its own inventory and commission-based earnings from partner businesses that sell through its platform. Zalando's Partner Program allows brands and retailers to list their products directly on Zalando's website, with Zalando earning a commission on each sale. Additionally, Zalando monetizes its logistics capabilities by offering fulfillment services to partners, and leverages its large customer base for targeted advertising opportunities. Strategic partnerships with various brands and a focus on expanding its logistics network and technological infrastructure further contribute to its revenue growth.

Zalando SE Financial Statement Overview

Summary

Zalando SE showcases solid financial health with consistent revenue growth and a manageable debt-to-equity ratio. Challenges include operational pressures affecting EBIT margins despite a strong gross profit margin and improving net profit margins. Cash flow reflects operational efficiency but highlights the need for improved free cash generation.

Income Statement

Positive

Zalando SE has shown steady revenue growth over the years, with a positive revenue growth rate of 4.24% from 2023 to 2024. Gross profit margin has remained strong at 40.69% in 2024, reflecting effective cost management. However, the EBIT margin declined to zero, indicating increased operational challenges. Net profit margin improved to 2.37% in 2024, showcasing better bottom-line management, though still modest. Overall, the income statement reflects solid top-line growth but indicates potential operational pressures.

Balance Sheet

Very Positive

The company maintains a healthy balance sheet with an improving equity base, as evidenced by an increase in stockholders' equity to €2,665 million in 2024. The debt-to-equity ratio is at a manageable 0.65, indicating moderate leverage. The equity ratio remains strong at 33.39%, suggesting a stable financial structure. The balance sheet highlights Zalando's prudent financial management, balancing growth with financial stability.

Cash Flow

Positive

Zalando's cash flow statements indicate a decrease in operating cash flow in 2024 to €654 million, reflecting potential operational cash generation challenges. Free cash flow has also declined, showing a reduction in available cash for investments. However, the operating cash flow to net income ratio remains robust, suggesting efficient conversion of income into cash. The cash flow performance reflects operational efficiency but highlights a need for improvement in free cash generation.

Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Breakdown
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	413.90M	649.00M	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 SE Technical Analysis

Technical Analysis Sentiment

Positive

Last Price18.03

Price Trends

50DMA

18.06

Positive

100DMA

17.89

Positive

200DMA

16.12

Positive

Market Momentum

MACD

0.29

Positive

RSI

50.40

Neutral

STOCH

8.28

Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For ZLNDY, the sentiment is Positive. The current price of 18.03 is below the 20-day moving average (MA) of 18.57, below the 50-day MA of 18.06, and above the 200-day MA of 16.12, indicating a bullish trend. The MACD of 0.29 indicates Positive momentum. The RSI at 50.40 is Neutral, neither overbought nor oversold. The STOCH value of 8.28 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for ZLNDY.

Zalando SE Peers Comparison

Overall Rating

UnderperformOutperform

Sector (61)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
VIPS	77 Outperform	$6.95B	6.79	20.12%	3.39%	-5.47%	-2.19%
RVLV	74 Outperform	$1.39B	28.15	12.04%	―	5.73%	81.83%
CART	74 Outperform	$10.97B	25.66	12.68%	―	11.05%	―
ZLNDY	73 Outperform	$9.41B	34.66	10.04%	―	4.18%	201.10%
ETSY	62 Neutral	$4.43B	17.93	-39.97%	―	2.18%	-32.87%
Sector *	61 Neutral	$6.66B	11.71	2.96%	4.01%	2.64%	-20.91%
W	51 Neutral	$3.96B	―	17.86%	―	-0.89%	46.62%

* Consumer Cyclical Sector Average

Performance Comparison

ZLNDY

Zalando SE

18.60

5.78

45.09%

VIPS

Vipshop

14.24

-1.63

-10.27%

Wayfair

33.66

-29.93

-47.07%

ETSY

Etsy

44.30

-15.67

-26.13%

RVLV

Revolve Group

19.53

-0.14

-0.71%

CART

Maplebear

45.22

8.52

23.22%

Zalando SE Earnings Call Summary

Earnings Call Date:Mar 06, 2025

(Q4-2024)

% Change Since: -2.80%|

Next Earnings Date:May 06, 2025

Earnings Call Sentiment Positive

Zalando delivered strong financial results in 2024, particularly in terms of revenue and GMV growth. The acquisition of ABOUT YOU and expansion in B2C and B2B segments are seen as positive strategic moves. However, there were challenges in B2B profitability, flat customer spend, and increased marketing costs. Overall, the positive aspects outweigh the challenges.

Q4-2024 Updates

Positive Updates

Strong Financial Performance in 2024

GMV grew by 4.5% to EUR 15.3 billion, and revenue grew by 4.2% to EUR 10.6 billion. Adjusted EBIT exceeded expectations by more than EUR 30 million, reaching EUR 511 million with a margin of 4.8%.

B2C and B2B Growth

B2C GMV and revenue saw significant growth with improved profitability. B2B revenues increased by 11.5% to EUR 953 million, driven by ZEOS fulfillment.

Customer Base Expansion

Active customers grew to 51.8 million, with a GMV growth of over 6% in the second half of the year. The new customer acquisition was particularly successful.

Sustainability Progress

Zalando reduced absolute emissions of its own operations by 82% since 2017 and emission intensity from private labels by 48% since 2018.

Strategic Acquisition of ABOUT YOU

Zalando secured more than 90% of ABOUT YOU's shares, expected to unlock EUR 100 million per year in synergies on an adjusted EBIT basis.

Negative Updates

Temporary Lower Profitability in B2B

B2B adjusted EBIT of EUR 23 million, with a margin of 2.4%, was below last year's profitability level due to front-loaded overhead and infrastructure investments.

Flat Spend Per Customer

Spend per customer remained flat at around EUR 295, with order frequency and basket size developments offsetting each other.

Increased Marketing Costs

Marketing costs reached 10% of revenues in Q4, driven by ROI-based investments and a large rebranding campaign.

Company Guidance

During the call, Zalando provided detailed guidance for the fiscal year 2025, highlighting several key financial metrics and strategic initiatives. The company reported a GMV growth of 4.5% to EUR 15.3 billion and a revenue growth of 4.2% to EUR 10.6 billion for 2024, both in the upper half of their guidance. Adjusted EBIT exceeded expectations by more than EUR 30 million, reaching EUR 511 million with a margin of 4.8%. Looking forward, Zalando expects a GMV and revenue growth range of 4% to 9% for 2025, driven by expanding their B2C and B2B growth pillars. The B2C segment saw an increase in active customers to 51.8 million, with a flat spend per customer at EUR 295. For B2B, revenues increased by 11.5% to EUR 953 million, with a focus on logistics and software solutions for future growth. The company aims to continue margin expansion towards a 6% to 8% adjusted EBIT margin target by 2028. Additionally, Zalando plans to further enhance its loyalty program, expand into lifestyle areas, and pursue its ecosystem strategy, including the anticipated acquisition of ABOUT YOU, which is expected to unlock significant synergies and value.

Glossary

OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.

NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.

UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.