Zalando: share price surges after a solid end to the year

(CercleFinance.com) - Last night, Zalando reported better-than-expected preliminary annual results, thanks to a fourth quarter that proved favorable for online consumer shopping.


The online ready-to-wear retailer explains that it expects adjusted operating profit (Ebit) of around 510 million euros for fiscal 2024, higher than its last forecast of 440 to 480 million euros communicated last October.

This performance is also well above the 475 million euros expected by the consensus.

Also according to these preliminary figures, the gross merchandise value (GMV) - which corresponds to the total value of sales made on its platform last year - rose by 4.5% to 15.3 billion euros.

Sales were up by 3.9% to 10.5 billion euros.

This publication was welcomed by analysts, with those at UBS even deciding to raise their recommendation to buy, with a price target raised from 28 to 40 euros.

From the research firm's point of view, Zalando could well be on the cusp of a cycle of upward revision of market estimates, with significant potential for value creation associated with the recent acquisition of About You.

The teams at RBC, who place the stock on their list of 30 best global ideas, note that the stock is trading on an Enterprise Value/Ebit ratio of just 10x, a level deemed attractive in view of the company's growth prospects.

Zalando is due to publish its detailed 2024 annual results on March 6.

In the meantime, the share jumped more than 8% on Thursday morning, posting the strongest rise on the DAX index and returning to its highest level in almost two years.

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