Zalando share: Under. 30 euros! | The variegated fool Germany

that Zalandoshare (WKN: ZAL111) really trades below the 30 euro mark. Not only that, no, but very deep down below. At a current stock price of € 27.67, the e-commerce player even had to rise by 8.4% to regain this brand.

It’s really cheap. And one reason why we correctly classify the current starting position again today. There are burdens, possibly very clear. However, it is also an assessment that is now approaching that of the corona crash. For me, this is a cheap, long-term option. Here the details.

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Zalando stock: concern vs. valuation!

In the case of the Zalando share, we can roughly describe the concerns as economic problems and inflation concerns. Specifically, this means that analysts and the market currently seem to agree that growth is next to impossible. After all, consumers question their consumption in times of inflation. Life is getting more expensive and many people and consumers have to save.

Among other things, clothes are initially saved. This could slow or further slow the growth of the Zalando stock. At least, as I said, that’s the setting the market seems to be pricing in. For me, there’s something about it. We do not tighten the belt when it comes to groceries, no, but more when it comes to things that we do not primarily need. Only small percentages of a declining volume can inhibit growth in the short term.

Nevertheless, we must not forget one or two things. For me, for example, a more likely option in the medium to long term is that e-commerce can benefit despite a declining clothing market. Many consumers’ buying behaviors are shifting from stationary retail to online shopping. The phenomenon should not be over. Possibly not either, because consumers are now making more targeted purchases and do not want to be exposed to stimuli from a crowded store or a crowded inner city.

In addition, the growth story is not over for me. However, the market seems to see things differently. At the current share price of less than 30 euros, the Zalando share has a market value of only 7.2 billion euros. With a price / sales ratio of 0.7, we are approaching a clearer underestimation.

A little doomsday?

To me, the Zalando stock priced below 30 euros, so to speak, the doom of the world. Or the end of e-commerce in the fashion segment. There are other construction sites, for example profitability. But still a growing business model, a strong brand and a megatrend that should not lose ground in the medium to long term.

All this is now available for less than 30 euros and at a price-to-sale ratio of only 0.7. Perhaps profitability is declining due to some cost pressures. But the price-earnings ratio of now 35 with a net margin of only 2% also seems to me very, very favorable.

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

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