Zalando share: PSR 0.83! | The variegated fool Germany

that Zalando-Shares (WKN: ZAL111) was obviously not convincing with the presentation of its quarterly figures. The bottom line recognized investors’ short-term decline in sales with a 12% divestment this Thursday. This is another low point. A share price of EUR 33.21 is well below the pre-pandemic level.

It is noteworthy that the Zalando stock is now very cheap. A market value of 8.73 billion euros alone is significantly less than the most recently reported annual revenue. With a value of around 10.4 billion euros, we get a price-to-sale ratio (PVR) of only 0.83.

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Again, I ask myself: What else is going to happen? This in turn can only be answered by the market phase and the sum of the investors. Let us continue to focus on the positive things this growth story possesses.

Zalando share: Intact market, intact quality

Although the Zalando stock was not very convincing: the investment dissertation remains intact in a clear mega-trend market. It’s about fashion. As well as Europe’s largest fashion online retailer. This is a starting position that is promising for me.

The market can have its pitfalls. After the pandemic is almost in the middle of the opening. In the short term, consumers are tired of shopping online and reclaiming physical stores. Can this stop the megatrend? Basically, I tend to be skeptical.

Let’s also look at the Zalando stock by qualitative, non-financial ratios: The number of active customers increased to 48.8 million. The number of orders and the average orders per customer also continued to increase. Only the average value of goods per order decreases. But seriously: From a business-oriented perspective, to me this looks like an intact investment dissertation.

Additional growth forecast

There is also a medium-term forecast for the Zalando share, which is still relevant. Management expects a gross product volume of EUR 30 billion by the end of 2025. If I abstract it to sales rates, I think a price-to-sale ratio of between 0.3 and 0.4 would be realistic. There is still a long way to go before 2025. But due to the current low valuation, I would see it more as an opportunity and no longer as a risk.

It is also positive that Zalando’s management has once again confirmed its revenue forecast for the current financial year with growth of between 12% and 19%. Even though it is at the lower end of the forecast range: it still means double-digit growth measured on this key figure.

Zalando shares have fallen sharply. Yes, maybe it’s falling even lower. But now the valuation of this powerful e-commerce player is relatively cheap. A price-to-sale ratio of 0.83 shows this very clearly. But the broader context also suggests this picture quite closely for long-term investors.

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Vincent owns shares in Zalando. The Motley Fool owns shares in and recommends Zalando.

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