Zalando SE (ZLNDY) AI Stock Analysis

• Market Cap: $6.82B
• Dividend Yield: N/A
• Average Volume (3M): 1.11K
• Price to Earnings (P/E): 23.0
• Beta (1Y): 0.90
• Revenue Growth: 14.50%
• EPS Growth: 20.27%
• Country: US
• Employees: 15,463
• Sector: Consumer Cyclical
• Sector Strength: 84
• Industry: Specialty Retail
• EPS (TTM): 0.04
• Shares Outstanding: 528,339,970
• 10 Day Avg. Volume: 511
• 30 Day Avg. Volume: 1,112
• PEG Ratio: 0.16
• Price to Book (P/B): 3.15
• Price to Sales (P/S): 0.79
• P/FCF Ratio: 18.78
• Enterprise Value/Market Cap: 1.18
• Enterprise Value/Revenue: 0.74
• Enterprise Value/Gross Profit: 1.81
• Enterprise Value/Ebitda: 9.57
• 1Y Price Target: N/A
• Price Target Upside: N/A
• Rating Consensus: Hold
• Number of Analyst Covering: 0
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 64 Neutral
• Price Target: $14.00 ▲(4.24% Upside)

Zalando SE's overall stock score is driven by strong financial performance and positive earnings call highlights, reflecting growth and strategic partnerships. However, technical analysis indicates bearish market momentum, and valuation metrics suggest moderate attractiveness. The company's cash flow challenges and increased costs from recent acquisitions are notable risks.

Positive Factors

Revenue Growth

Consistent revenue growth indicates strong market demand and effective business strategies, supporting long-term expansion and market position.

Strategic Partnerships

Long-term partnerships enhance brand visibility and market reach, positioning Zalando as a key player in the sports and lifestyle segments.

B2B Segment Growth

Strong B2B growth diversifies revenue streams and strengthens business resilience, supporting sustainable financial performance.

Negative Factors

Cash Flow Challenges

Declining cash flow may constrain investment and operational flexibility, impacting long-term growth and financial health.

Increased Costs

Rising costs can pressure margins, reducing profitability and potentially affecting competitive pricing strategies over time.

Impact of Acquisition

Acquisition-related challenges can strain profitability and integration efforts, affecting overall financial performance and strategic focus.

Zalando SE 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 on its platform. The company's revenue model is predominantly based on a marketplace approach, where it sells products directly to consumers as well as allowing third-party retailers to list their products on its site for a commission. Key revenue streams include direct sales from its own inventory, commission fees from third-party merchants, and premium services such as Zalando Lounge, which offers exclusive offers and discounts to members. Additionally, Zalando has established partnerships with various fashion brands and retailers to enhance its product offerings and expand its market reach, further contributing to its earnings through increased sales volume and brand collaborations.

Zalando SE Financial Statement Overview

Summary

Zalando SE demonstrates strong revenue growth and stable operational performance, with healthy gross profit margins. The balance sheet shows improved leverage and a solid equity position, enhancing financial stability. However, the significant decline in free cash flow raises concerns about cash management. Overall, the company is on a positive trajectory but needs to address cash flow challenges to sustain growth.

Income Statement

Zalando SE shows strong revenue growth in the TTM period, with a 1.79% increase, indicating a positive trajectory. The gross profit margin remains healthy at around 40.66%, reflecting efficient cost management. However, the net profit margin is relatively low at 2.47%, suggesting room for improvement in profitability. The EBIT and EBITDA margins are stable, indicating consistent operational performance.

Balance Sheet

The company's debt-to-equity ratio has improved to 0.60 in the TTM period, showing a reduction in leverage and a stronger equity position. Return on equity is at 10.17%, indicating decent profitability relative to shareholder equity. The equity ratio stands at approximately 34.34%, suggesting a balanced capital structure. Overall, the balance sheet reflects stability with manageable leverage.

Cash Flow

Zalando SE's free cash flow has decreased significantly by 47.70% in the TTM period, highlighting potential cash flow challenges. The operating cash flow to net income ratio is 0.10, indicating a lower conversion of net income into cash. The free cash flow to net income ratio is 0.57, suggesting moderate cash generation relative to net income. While there are concerns about cash flow, the company maintains a positive cash position.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	10.94B	10.57B	10.14B	10.34B	10.35B	7.98B
Gross Profit	4.45B	4.30B	3.68B	4.06B	4.33B	3.39B
EBITDA	840.50M	811.30M	572.50M	395.30M	660.20M	596.20M
Net Income	270.80M	251.10M	83.00M	16.80M	234.50M	226.10M
Balance Sheet
Total Assets	8.13B	7.98B	8.11B	7.63B	6.90B	6.49B
Cash, Cash Equivalents and Short-Term Investments	2.66B	2.69B	2.62B	2.04B	2.29B	2.69B
Total Debt	1.68B	1.73B	1.85B	1.72B	1.57B	1.77B
Total Liabilities	5.34B	5.32B	5.73B	5.43B	4.68B	4.34B
Stockholders Equity	2.79B	2.67B	2.37B	2.20B	2.22B	2.15B
Cash Flow
Free Cash Flow	237.90M	447.30M	686.30M	108.30M	283.30M	277.30M
Operating Cash Flow	415.20M	654.10M	949.50M	459.90M	616.20M	527.40M
Investing Cash Flow	-652.30M	-269.80M	-320.70M	-476.20M	-335.90M	-217.80M
Financing Cash Flow	-145.50M	-325.60M	-123.60M	-245.90M	-639.80M	1.35B

Zalando SE Technical Analysis

• Technical Analysis Sentiment: Neutral
• Last Price: 13.43
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For ZLNDY, the sentiment is Neutral. The current price of 13.43 is above the 20-day moving average (MA) of 13.28, below the 50-day MA of 14.36, and below the 200-day MA of 16.04, indicating a neutral trend. The MACD of -0.14 indicates Negative momentum. The RSI at 52.59 is Neutral, neither overbought nor oversold. The STOCH value of 99.49 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for ZLNDY.

Zalando SE Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
VIPS	81 Outperform	$9.92B	10.51	17.92%	2.38%	-2.73%	-8.21%
RVLV	77 Outperform	$1.85B	33.73	12.19%	―	9.24%	35.68%
MNSO	72 Outperform	$5.90B	19.90	20.83%	3.15%	13.37%	-19.37%
ZLNDY	64 Neutral	$6.82B	23.00	10.07%	―	14.50%	20.27%
Sector *	61 Neutral	$18.38B	12.79	-2.54%	3.03%	1.52%	-15.83%
ETSY	57 Neutral	$5.26B	37.23	―	―	1.98%	-20.98%
W	55 Neutral	$12.41B	―	―	―	3.35%	42.99%

Zalando SE Corporate Events

Zalando SE Earnings Call: Growth Amid Challenges

Zalando SE’s recent earnings call presented a balanced outlook, showcasing strong growth metrics and strategic advancements, particularly in AI and B2B segments. However, the company also acknowledged challenges stemming from geopolitical conditions, inventory management, and cost pressures.