The Steppe Eagle OEIC Ltd on Zalando SE
Thesis
Zalando is viewed as a financially healthy European e-commerce leader with more than EUR 12 billion of sales and the potential to deliver stable double-digit growth over time. The fund believes the shares became undervalued after falling from EUR35 to about EUR22 in 2025 despite continued growth in the underlying business. Five-year revenue CAGR is cited at 9.1%, with earnings per share remaining sturdy. The manager expects a further business recovery over the next three to five years. P(1) Harry Qelm Baabsman Steppe…
“We believe the company is undervalued, and we shall eventually see its recovery.”
Key risks
- Profit margins are thin
- Fast fashion is less environmentally friendly than the fund previously believed