ERMENEGILDO ZEGNA NV (ZGN) Stock Fundamental Analysis
NYSE:ZGN - New York Stock Exchange, Inc. - NL0015000PB5 - Common Stock - Currency: USD
ZGN gets a fundamental rating of 3 out of 10. The analysis compared the fundamentals against 48 industry peers in the Textiles, Apparel & Luxury Goods industry. While ZGN is still in line with the averages on profitability rating, there are concerns on its financial health. While showing a medium growth rate, ZGN is valued expensive at the moment.
1. Profitability
1.1 Basic Checks
In the past year ZGN was profitable.
In the past year ZGN had a positive cash flow from operations.
The reported net income has been mixed in the past 5 years: ZGN reported negative net income in multiple years.
Each year in the past 5 years ZGN had a positive operating cash flow.
1.2 Ratios
Looking at the Return On Assets, with a value of 2.72%, ZGN is in line with its industry, outperforming 50.00% of the companies in the same industry.
With a Return On Equity value of 8.41%, ZGN perfoms like the industry average, outperforming 52.08% of the companies in the same industry.
ZGN has a Return On Invested Capital (6.96%) which is comparable to the rest of the industry.
The Average Return On Invested Capital over the past 3 years for ZGN is below the industry average of 11.61%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 2.72% | ||
| ROE | 8.41% | ||
| ROIC | 6.96% |
ROA(3y)3.08%
ROA(5y)0.32%
ROE(3y)10.15%
ROE(5y)-0.11%
ROIC(3y)7.69%
ROIC(5y)N/A
1.3 Margins
ZGN has a Profit Margin of 3.96%. This is comparable to the rest of the industry: ZGN outperforms 54.17% of its industry peers.
In the last couple of years the Profit Margin of ZGN has grown nicely.
With a decent Operating Margin value of 9.45%, ZGN is doing good in the industry, outperforming 64.58% of the companies in the same industry.
In the last couple of years the Operating Margin of ZGN has grown nicely.
ZGN's Gross Margin of 66.60% is amongst the best of the industry. ZGN outperforms 89.58% of its industry peers.
In the last couple of years the Gross Margin of ZGN has remained more or less at the same level.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 9.45% | ||
| PM (TTM) | 3.96% | ||
| GM | 66.6% |
OM growth 3YN/A
OM growth 5Y2.91%
PM growth 3YN/A
PM growth 5Y19.25%
GM growth 3Y-2.37%
GM growth 5Y-1.14%
2. Health
2.1 Basic Checks
ZGN has a Return on Invested Capital (ROIC), which is below the Cost of Capital (WACC), which means it is destroying value.
Compared to 1 year ago, ZGN has more shares outstanding
The number of shares outstanding for ZGN has been increased compared to 5 years ago.
Compared to 1 year ago, ZGN has a worse debt to assets ratio.
2.2 Solvency
ZGN has an Altman-Z score of 1.65. This is a bad value and indicates that ZGN is not financially healthy and even has some risk of bankruptcy.
The Altman-Z score of ZGN (1.65) is worse than 83.33% of its industry peers.
ZGN has a debt to FCF ratio of 6.74. This is a slightly negative value and a sign of low solvency as ZGN would need 6.74 years to pay back of all of its debts.
With a Debt to FCF ratio value of 6.74, ZGN perfoms like the industry average, outperforming 45.83% of the companies in the same industry.
A Debt/Equity ratio of 0.78 indicates that ZGN is somewhat dependend on debt financing.
ZGN has a Debt to Equity ratio of 0.78. This is in the lower half of the industry: ZGN underperforms 70.83% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.78 | ||
| Debt/FCF | 6.74 | ||
| Altman-Z | 1.65 |
ROIC/WACC0.9
WACC7.72%
2.3 Liquidity
A Current Ratio of 1.41 indicates that ZGN should not have too much problems paying its short term obligations.
ZGN's Current ratio of 1.41 is on the low side compared to the rest of the industry. ZGN is outperformed by 77.08% of its industry peers.
A Quick Ratio of 0.80 indicates that ZGN may have some problems paying its short term obligations.
With a Quick ratio value of 0.80, ZGN is not doing good in the industry: 70.83% of the companies in the same industry are doing better.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.41 | ||
| Quick Ratio | 0.8 |
3. Growth
3.1 Past
The earnings per share for ZGN have decreased strongly by -36.78% in the last year.
Measured over the past years, ZGN shows a very strong growth in Earnings Per Share. The EPS has been growing by 27.50% on average per year.
The Revenue has been growing slightly by 2.21% in the past year.
ZGN shows quite a strong growth in Revenue. Measured over the last years, the Revenue has been growing by 8.06% yearly.
EPS 1Y (TTM)-36.78%
EPS 3YN/A
EPS 5Y27.5%
EPS Q2Q%-30.34%
Revenue 1Y (TTM)2.21%
Revenue growth 3Y14.63%
Revenue growth 5Y8.06%
Sales Q2Q%72.97%
3.2 Future
Based on estimates for the next years, ZGN will show a quite strong growth in Earnings Per Share. The EPS will grow by 14.59% on average per year.
Based on estimates for the next years, ZGN will show a small growth in Revenue. The Revenue will grow by 4.46% on average per year.
EPS Next Y4.56%
EPS Next 2Y10.89%
EPS Next 3Y14.59%
EPS Next 5YN/A
Revenue Next Year0.15%
Revenue Next 2Y2.37%
Revenue Next 3Y3.45%
Revenue Next 5Y4.46%
3.3 Evolution
Although the future EPS growth is still strong, it is not able to hold up the even more excellent growth rate of the past years.
When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is decreasing.
4. Valuation
4.1 Price/Earnings Ratio
A Price/Earnings ratio of 24.74 indicates a rather expensive valuation of ZGN.
ZGN's Price/Earnings ratio is a bit more expensive when compared to the industry. ZGN is more expensive than 62.50% of the companies in the same industry.
ZGN's Price/Earnings ratio indicates a similar valuation than the S&P500 average which is at 26.31.
ZGN is valuated rather expensively with a Price/Forward Earnings ratio of 20.54.
Compared to the rest of the industry, the Price/Forward Earnings ratio of ZGN is on the same level as its industry peers.
ZGN's Price/Forward Earnings ratio indicates a similar valuation than the S&P500 average which is at 22.13.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 24.74 | ||
| Fwd PE | 20.54 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, ZGN is valued a bit cheaper than 79.17% of the companies in the same industry.
ZGN's Price/Free Cash Flow ratio is a bit cheaper when compared to the industry. ZGN is cheaper than 72.92% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 12.28 | ||
| EV/EBITDA | 6.06 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates ZGN does not grow enough to justify the current Price/Earnings ratio.
A more expensive valuation may be justified as ZGN's earnings are expected to grow with 14.59% in the coming years.
PEG (NY)5.42
PEG (5Y)0.9
EPS Next 2Y10.89%
EPS Next 3Y14.59%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 1.49%, ZGN has a reasonable but not impressive dividend return.
ZGN's Dividend Yield is a higher than the industry average which is at 3.72.
Compared to the average S&P500 Dividend Yield of 2.39, ZGN is paying slightly less dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.49% |
5.2 History
ZGN has been paying a dividend for less than 5 years, so it still needs to build a track record.
Dividend Growth(5Y)N/A
Div Incr Years1
Div Non Decr Years2
5.3 Sustainability
39.30% of the earnings are spent on dividend by ZGN. This is a low number and sustainable payout ratio.
DP39.3%
EPS Next 2Y10.89%
EPS Next 3Y14.59%
8.66
+0.01 (+0.12%)
Chartmill FA Rating
GICS SectorConsumer Discretionary
GICS IndustryGroupConsumer Durables & Apparel
GICS IndustryTextiles, Apparel & Luxury Goods
Earnings (Last)
Earnings (Next)
Inst Owners15.55%
Inst Owner ChangeN/A
Ins Owners3.37%
Ins Owner ChangeN/A
Market Cap2.19B
Analysts72.73
Price Target9.06 (4.62%)
Short Float %6.81%
Short Ratio4.08
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.49% |
Yearly Dividend0.14
Dividend Growth(5Y)N/A
DP39.3%
Div Incr Years1
Div Non Decr Years2
Ex-Date
Surprises & Revisions
EPS beat(2)N/A
Avg EPS beat(2)N/A
Min EPS beat(2)N/A
Max EPS beat(2)N/A
EPS beat(4)N/A
Avg EPS beat(4)N/A
Min EPS beat(4)N/A
Max EPS beat(4)N/A
EPS beat(8)N/A
Avg EPS beat(8)N/A
EPS beat(12)N/A
Avg EPS beat(12)N/A
EPS beat(16)N/A
Avg EPS beat(16)N/A
Revenue beat(2)0
Avg Revenue beat(2)-12.1%
Min Revenue beat(2)-23.21%
Max Revenue beat(2)-0.99%
Revenue beat(4)N/A
Avg Revenue beat(4)N/A
Min Revenue beat(4)N/A
Max Revenue beat(4)N/A
Revenue beat(8)N/A
Avg Revenue beat(8)N/A
Revenue beat(12)N/A
Avg Revenue beat(12)N/A
Revenue beat(16)N/A
Avg Revenue beat(16)N/A
PT rev (1m)-0.32%
PT rev (3m)-12.78%
EPS NQ rev (1m)N/A
EPS NQ rev (3m)N/A
EPS NY rev (1m)-2.7%
EPS NY rev (3m)-10.37%
Revenue NQ rev (1m)N/A
Revenue NQ rev (3m)N/A
Revenue NY rev (1m)0.05%
Revenue NY rev (3m)-3.49%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 24.74 | ||
| Fwd PE | 20.54 | ||
| P/S | 0.97 | ||
| P/FCF | 12.28 | ||
| P/OCF | 6.76 | ||
| P/B | 2.06 | ||
| P/tB | 6.25 | ||
| EV/EBITDA | 6.06 |
EPS(TTM)0.35
EY4.04%
EPS(NY)0.42
Fwd EY4.87%
FCF(TTM)0.71
FCFY8.14%
OCF(TTM)1.28
OCFY14.8%
SpS8.94
BVpS4.21
TBVpS1.39
PEG (NY)5.42
PEG (5Y)0.9
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 2.72% | ||
| ROE | 8.41% | ||
| ROCE | 9.29% | ||
| ROIC | 6.96% | ||
| ROICexc | 8.18% | ||
| ROICexgc | 12.88% | ||
| OM | 9.45% | ||
| PM (TTM) | 3.96% | ||
| GM | 66.6% | ||
| FCFM | 7.89% |
ROA(3y)3.08%
ROA(5y)0.32%
ROE(3y)10.15%
ROE(5y)-0.11%
ROIC(3y)7.69%
ROIC(5y)N/A
ROICexc(3y)10.34%
ROICexc(5y)N/A
ROICexgc(3y)17.93%
ROICexgc(5y)N/A
ROCE(3y)10.27%
ROCE(5y)N/A
ROICexcg growth 3YN/A
ROICexcg growth 5Y8.96%
ROICexc growth 3YN/A
ROICexc growth 5Y6.96%
OM growth 3YN/A
OM growth 5Y2.91%
PM growth 3YN/A
PM growth 5Y19.25%
GM growth 3Y-2.37%
GM growth 5Y-1.14%
F-Score5
Asset Turnover0.69
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.78 | ||
| Debt/FCF | 6.74 | ||
| Debt/EBITDA | 1.7 | ||
| Cap/Depr | 53.2% | ||
| Cap/Sales | 6.45% | ||
| Interest Coverage | 4.82 | ||
| Cash Conversion | 66.46% | ||
| Profit Quality | 199.27% | ||
| Current Ratio | 1.41 | ||
| Quick Ratio | 0.8 | ||
| Altman-Z | 1.65 |
F-Score5
WACC7.72%
ROIC/WACC0.9
Cap/Depr(3y)45.13%
Cap/Depr(5y)42.84%
Cap/Sales(3y)5.15%
Cap/Sales(5y)5.32%
Profit Quality(3y)167.91%
Profit Quality(5y)N/A
High Growth Momentum
Growth
EPS 1Y (TTM)-36.78%
EPS 3YN/A
EPS 5Y27.5%
EPS Q2Q%-30.34%
EPS Next Y4.56%
EPS Next 2Y10.89%
EPS Next 3Y14.59%
EPS Next 5YN/A
Revenue 1Y (TTM)2.21%
Revenue growth 3Y14.63%
Revenue growth 5Y8.06%
Sales Q2Q%72.97%
Revenue Next Year0.15%
Revenue Next 2Y2.37%
Revenue Next 3Y3.45%
Revenue Next 5Y4.46%
EBIT growth 1Y-11.59%
EBIT growth 3YN/A
EBIT growth 5Y11.21%
EBIT Next Year138.36%
EBIT Next 3Y41.59%
EBIT Next 5YN/A
FCF growth 1Y-22.23%
FCF growth 3Y-6.33%
FCF growth 5Y6.03%
OCF growth 1Y1.36%
OCF growth 3Y-0.25%
OCF growth 5Y9.9%