DCF Studio

    ZAL.DE · GER · Consumer Cyclical

    Zalando SE

    Also onConsensus Drift

    Implied value per share

    EUR 12.58

    Market price

    EUR 21.52

    Implied upside

    -41.6%

    5-year forecast · Perpetuity growth terminal value · Mid-year discounting · Base case

    NoteRisk-free rate is an assumption: EUR assumption - no free live source available for this market.

    Value Per Share

    Perpetuity growth
    EUR 12.58-41.6%
    Exit multiple
    EUR 18.95-11.9%
    Market price
    EUR 21.52

    Same forecast, different terminal treatment. Percentages vs price.

    Forecast Cashflows

    Reporting currency (EUR). Outflows negative.

    0m104m208mFY26FY27FY28FY29FY30
    Nominal FCFFDiscounted to todayEUR
    LineFY26FY27FY28FY29FY30CAGR
    RevenueEUR 13.1bnEUR 13.9bnEUR 14.7bnEUR 15.6bnEUR 16.6bn+6.1%
    EBITEUR 311.3mEUR 330.2mEUR 350.3mEUR 371.5mEUR 394.1m+6.1%
    NOPATEUR 217.9mEUR 231.2mEUR 245.2mEUR 260.1mEUR 275.9m+6.1%
    Add depreciation & amortisationEUR 422.4mEUR 448.1mEUR 475.3mEUR 504.1mEUR 534.7m+6.1%
    Less capital expenditureEUR -319.3mEUR -338.7mEUR -359.2mEUR -381.0mEUR -404.2m+6.1%
    Less increase in working capitalEUR -157.0mEUR -166.5mEUR -176.6mEUR -187.3mEUR -198.7m+6.1%
    Free cashflow to firmEUR 164.1mEUR 174.0mEUR 184.6mEUR 195.8mEUR 207.7m+6.1%
    Discount factor0.95670.87570.80160.73370.6716-
    Present valueEUR 157.0mEUR 152.4mEUR 148.0mEUR 143.7mEUR 139.5m-2.9%
    Present Value Of The ForecastEUR 740.6m

    Discount Rate

    Source shown per component. All overridable above.

    Risk-free rate2.60%EUR assumption - no free live source available for this market (assumption)
    Equity risk premium6.00%Market assumption
    Beta1.384Reported 1.573, pulled toward 1.0 (Blume)
    Cost of equity10.90%Risk-free + beta x equity risk premium
    Cost of debt4.60%Interest expense / average total debt
    Market capitalisationEUR 5.3bn78.5% of capital
    Total debtEUR 1.4bn21.5% of capital, book value as a proxy
    Tax rate30.0%Effective, capped at statutory
    WACC9.25%E/V x Re + D/V x Rd x (1 - t)

    Terminal Value

    Perpetuity growth is intrinsic. The exit multiple defaults to the company's current EV/EBITDA, so it answers a different question - what the shares are worth if today's rating holds and EBITDA grows as forecast.

    Perpetuity growth at 2.50%

    Value per shareEUR 12.58

    73% of EV

    Forecast FCFF, final year
    EUR 207.7m
    Capex at depreciation, working capital in reinvestment
    EUR 275.9m
    Less reinvestment at g/ROIC (27.0% of NOPAT)
    EUR -74.6m
    Capitalised
    EUR 201.3m
    ROIC (WACC floor)
    9.3%
    Terminal value, undiscounted
    EUR 3.1bn
    Terminal value, discounted
    EUR 2.1bn
    Enterprise value
    EUR 2.8bn
    Less net debt
    EUR -517.0m
    Equity value
    EUR 3.3bn

    Exit at 6.0x EBITDA

    Value per shareEUR 18.95

    83% of EV

    Terminal value, undiscounted
    EUR 5.6bn
    Terminal value, discounted
    EUR 3.7bn
    Enterprise value
    EUR 4.5bn
    Less net debt
    EUR -517.0m
    Equity value
    EUR 5.0bn

    Spread between methods: 40%.

    Sensitivity

    Value per share (EUR) by discount rate and long-run growth.

    Long-run growth
    Discount rate1.50%2.00%2.50%3.00%3.50%
    7.25%15.6215.6715.7215.7815.83
    8.25%13.8713.9113.9614.0014.05
    9.25%12.5012.5412.5812.6212.65
    10.25%11.4111.4411.4711.5111.54
    11.25%10.5110.5410.5710.6010.63

    Outlined: this model. Green text: above today's price of 21.52. Shading: distance from this model's own value.

    Priced In

    What each input would have to be to justify the current price, one at a time.

    InputModelImpliedGap
    EBIT margin2.4%4.2%+1.8pp
    Discount rate9.3%5.5%-3.8pp
    Download as Excel

    Live formulas, not pasted numbers - edit a driver and the workbook reprices.

    Yahoo Finance and RBA data. General information, not advice. Methodology.