ZAL Margins And Buybacks Are Expected To Drive Shares Higher

Zalando's analyst fair value has been lifted by about EUR 5 to roughly EUR 52, as analysts highlight a modestly improved profit margin outlook and a more attractive forward valuation despite slightly slower expected revenue growth.

Analyst Commentary

Bullish analysts note that the recent adjustments to Zalando's price targets reflect growing confidence in the company’s ability to execute on profitability initiatives while maintaining steady top line expansion. They highlight that the improved margin outlook and disciplined cost control are beginning to be reflected in forward valuation metrics.

Even as some houses fine tune their targets, the broader research narrative remains constructive, with multiple Buy ratings underpinned by expectations of continued operational efficiency, stronger monetization of the platform, and a healthier balance between growth and returns.

Bullish Takeaways

• Recent upward revisions to price targets indicate that bullish analysts see scope for multiple expansion as Zalando delivers on margin improvement and capital discipline.
• Positive ratings are supported by the view that the platform model can sustain mid term growth, with improved customer monetization and higher order profitability driving earnings upgrades.
• Analysts note that the current valuation is considered attractive relative to long term growth prospects, particularly if execution on logistics efficiency and assortment optimization continues.
• Stability in positive recommendations, even where targets are modestly adjusted, is interpreted as a sign of confidence in management’s strategy and the company’s ability to outperform peers over time.

What's in the News

• Zalando has launched a new share repurchase program of up to 5,500,000 shares for €100 million, with buybacks running from November 6 to December 31, 2025, primarily to serve employee and Management Board option programs (company announcement).
• Under its broader AGM mandate valid until May 26, 2030, Zalando is authorized to repurchase up to 22,393,628 shares, or 8.61% of its issued share capital, for uses including M&A, employee share plans, and potential share cancellations (company AGM resolution).
• The Supervisory Board has appointed Anna Dimitrova as Chief Financial Officer, effective January 1, 2026, adding deep capital markets, M&A, and integration expertise to support Zalando’s pan European platform strategy (company announcement).
• Interim CFO David Schröder will step back from temporary finance duties and refocus on his role as Co CEO once Dimitrova assumes the CFO position (company announcement).

Valuation Changes

• Fair value has risen slightly, moving from approximately €47.00 to about €52.43 per share, reflecting a modestly more optimistic outlook.
• The discount rate has increased marginally from around 6.52% to roughly 6.77%, implying a slightly higher required return for equity investors.
• Revenue growth expectations have edged down from about 16.23% to approximately 15.41%, indicating a small tempering of top line assumptions.
• The net profit margin has improved slightly, rising from roughly 4.27% to about 4.35%, pointing to a modestly better profitability profile.
• The future P/E has fallen from around 20.0x to roughly 17.5x, suggesting a more attractive forward earnings multiple despite the higher fair value estimate.