Zalando Reports Strong Growth in 2021 but Margin Off 2020's Highs; Outlook in Line With Our Forecast

We maintain our fair value estimate of EUR 59 per share for no-moat Zalando as the company reported slightly better revenue growth than we expected (29.7% versus 28.8% in our models) and adjusted operating profit (which excludes stock-based compensation and one-off items) bang in line with our estimates. The company’s outlook for 2022 also matched our forecast with gross merchandize value, or GMV, expected to increase 16%-23% (17% in our models), revenue expected to grow 12%-19% (12% in our models) and adjusted operating profit to reach EUR 430 million-510 million (versus EUR 468 million in 2021 and EUR 503 million in our models). After a 35% decline over the past year, shares look fairly valued at current levels.