ROC % measures how well a company generates cash flow relative to the capital it has invested in its business. It is also called ROIC %. Zalando SE's annualized return on capital (ROC %) for the quarter that ended in Mar. 2026 was -5.86%.
As of today (2026-06-24), Zalando SE's WACC % is 10.05%. Zalando SE's ROC % is 3.23% (calculated using TTM income statement data).
Zalando SE earns returns that do not match up to its cost of capital. It will destroy value as it grows.
Zalando SE (WAR:ZAL) ROC % Explanation
ROC % measures how well a company generates cash flow relative to the capital it has invested in its business. It is also called ROIC %. The reason book values of debt and equity are used is because the book values are the capital the company received when issuing the debt or receiving the equity investments.
There are four key components to this definition. The first is the use of operating income or EBIT rather than net income in the numerator. The second is the tax adjustment to this operating income or EBIT, computed as a hypothetical tax based on an effective or marginal tax rate. The third is the use of book values for invested capital, rather than market values. The final is the timing difference; the capital invested is from the end of the prior year whereas the operating income or EBIT is the current year's number.
Why is ROC % important?
Because it costs money to raise capital. A firm that generates higher returns on investment than it costs the company to raise the capital needed for that investment is earning excess returns. A firm that expects to continue generating positive excess returns on new investments in the future will see its value increase as growth increases, whereas a firm that earns returns that do not match up to its cost of capital will destroy value as it grows.
As of today, Zalando SE's WACC % is 10.05%. Zalando SE's ROC % is 3.23% (calculated using TTM income statement data).
Zalando SE earns returns that do not match up to its cost of capital. It will destroy value as it grows.
Be Aware
Like ROE % and ROA %, ROC % is calculated with only 12 months of data. Fluctuations in the company's earnings or business cycles can affect the ratio drastically. It is important to look at the ratio from a long term perspective.
Zalando SE ROC % Related Terms
Zalando SE ROC % Historical Data
* Premium members only.
The historical data trend for Zalando SE's ROC % can be seen below:
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
Note:
The Operating Income data used here is four times the quarterly (Mar. 2026) data.
The tax rate is limited to between 0% and 100%.
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
Zalando SE (WAR:ZAL) has a ROC % of -5.86% as of Mar. 2026. Return on capital is the ratio of current-period net income to average two-period capital. View historical data on Zalando SE and its competitors.
Is Zalando SE's ROC % too high?
Zalando SE's current ROC % is -5.86%. Overall, Zalando SE has a GF Score™ of 68/100 and is considered Modestly Undervalued, reflecting its overall financial health beyond just this single metric.
How does Zalando SE's ROC % compare to AMZN and BABA?
Zalando SE's ROC % of -5.86% can be compared against companies in the Retail - Cyclical industry. The industry median ROC % is 4.36. See the competitive comparison table and distribution chart on this page for a detailed peer-by-peer breakdown.
What is a good ROC % for a Retail - Cyclical company?
The median ROC % among Retail - Cyclical companies is 4.36, based on 1,114 companies in the industry. Companies in the top quartile (top 25%) have a ROC % significantly above this median, while those in the bottom quartile fall well below. However, ROC % should not be evaluated in isolation — investors should consider it alongside profitability, growth, and financial strength metrics. Use the industry distribution chart on this page to see where any company falls relative to its peers.
What does a high ROC % mean?
A high ROC % can signal that a stock is expensive relative to its fundamentals. Return on capital is the ratio of current-period net income to average two-period capital. View historical data on Zalando SE and its competitors. For the Retail - Cyclical industry, the median ROC % is 4.36 — values significantly above this may indicate overvaluation, while values below may suggest a bargain or underlying issues. Zalando SE's current ROC % is -5.86%. However, context matters — high-growth companies often justify higher valuations. Always evaluate alongside other metrics like GF Score™ and GF Value™.
Is Zalando SE stock overvalued right now?
Based on GuruFocus' analysis, Zalando SE (WAR:ZAL) is currently considered Modestly Undervalued. The stock's GF Value™ is zł132.23, compared to a current price of zł103.40 — trading 21.8% below its estimated fair value. The current ROC % is -5.86%. Zalando SE's overall GF Score™ is 68/100 with 7 warning signs to review. Investors should evaluate multiple metrics — including profitability, growth, and financial strength — before making a decision.
How is ROC % calculated?
ROC % is calculated from a company's financial statements. For Zalando SE (WAR:ZAL), the current ROC % is -5.86% as of Mar. 2026. GuruFocus calculates this using data sourced from SEC filings and annual reports. See the calculation section and 30-year financial data on this page for the full breakdown.
Is Zalando SE (WAR:ZAL) Overvalued in 2026?
Based on GuruFocus' analysis, Zalando SE stock appears to be undervalued.
The current stock price of zł103.40 is trading 21.8% below its estimated GF Value™ of zł132.23.
GuruFocus considers Zalando SE to be Modestly Undervalued.
Key valuation signals for WAR:ZAL:
ROC %: -5.86%
GF Value™: zł132.23 vs. price of zł103.40 (21.8% below fair value)
No single metric tells the full story. See the WAR:ZAL stock analysis page for a complete view including 30-year financials, guru trades, and insider activity.
Zalando, founded in 2008, is Europe's biggest pure-play online fashion platform. Zalando is present in 25 European countries, and its major market is the DACH region, comprising Germany, Austria, and Switzerland. After the About You acquisition, it has 17 fulfillment centers, offers over 7,000 brands, and as of September 2025, had 62 million active users (more than 10% of the population in countries where the firm has a presence).
68GF Score
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