Zalando Building Up The Infrastructure To Be More Than Just Another Online Retailer

There’s a lot about Zalando (OTCPK:ZLNDY) that will look familiar to experienced investors – namely that tension between disruptive long-term growth and the fair price to pay today for that growth potential. Zalando has definitely made a mark in fashion e-commerce in Germany, and there is ample room to expand throughout Europe and into higher-margin services, but Amazon (NASDAQ:AMZN) looms large as a threat and more value-conscious investors may fret about how long it will take the company to earn attractive returns on the considerable sums it is putting into market and infrastructure development.

With the shares already seemingly discounting close to high teens long-term revenue growth and mid-single-digit FCF margins, I would say that expectations are already high and that this won’t appeal to many value-driven investors. On the other hand, the company continues to deliver strong growth metrics and the valuation isn’t absurd relative to what high-growth companies often get.

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Zalando Building Up The Infrastructure To Be More Than Just Another Online Retailer