ERMENEGILDO ZEGNA NV (ZGN) Stock Fundamental Analysis
NYSE:ZGN - New York Stock Exchange, Inc. - NL0015000PB5 - Common Stock - Currency: USD
Taking everything into account, ZGN scores 3 out of 10 in our fundamental rating. ZGN was compared to 50 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. ZGN is quite expensive at the moment. It does show a decent growth rate.
1. Profitability
1.1 Basic Checks
ZGN had positive earnings in the past year.
ZGN had a positive operating cash flow in the past year.
The reported net income has been mixed in the past 5 years: ZGN reported negative net income in multiple years.
ZGN had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
With a Return On Assets value of 2.72%, ZGN perfoms like the industry average, outperforming 52.00% of the companies in the same industry.
ZGN has a Return On Equity of 8.41%. This is comparable to the rest of the industry: ZGN outperforms 54.00% of its industry peers.
Looking at the Return On Invested Capital, with a value of 6.96%, ZGN is in line with its industry, outperforming 52.00% of the companies in the same industry.
Measured over the past 3 years, the Average Return On Invested Capital for ZGN is below the industry average of 11.17%.
| 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
Looking at the Profit Margin, with a value of 3.96%, ZGN is in line with its industry, outperforming 56.00% of the companies in the same industry.
In the last couple of years the Profit Margin of ZGN has grown nicely.
ZGN has a Operating Margin of 9.45%. This is in the better half of the industry: ZGN outperforms 68.00% of its industry peers.
In the last couple of years the Operating Margin of ZGN has grown nicely.
ZGN has a Gross Margin of 66.60%. This is amongst the best in the industry. ZGN outperforms 90.00% 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
With a Return on Invested Capital (ROIC) below the Cost of Capital (WACC), ZGN is destroying value.
The number of shares outstanding for ZGN has been increased compared to 1 year ago.
Compared to 5 years ago, ZGN has more shares outstanding
The debt/assets ratio for ZGN is higher compared to a year ago.
2.2 Solvency
ZGN has an Altman-Z score of 1.68. This is a bad value and indicates that ZGN is not financially healthy and even has some risk of bankruptcy.
ZGN has a worse Altman-Z score (1.68) than 80.00% 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.
ZGN's Debt to FCF ratio of 6.74 is in line compared to the rest of the industry. ZGN outperforms 50.00% of its industry peers.
A Debt/Equity ratio of 0.78 indicates that ZGN is somewhat dependend on debt financing.
The Debt to Equity ratio of ZGN (0.78) is worse than 66.00% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.78 | ||
| Debt/FCF | 6.74 | ||
| Altman-Z | 1.68 |
ROIC/WACC0.9
WACC7.74%
2.3 Liquidity
ZGN has a Current Ratio of 1.41. This is a normal value and indicates that ZGN is financially healthy and should not expect problems in meeting its short term obligations.
ZGN has a worse Current ratio (1.41) than 76.00% of its industry peers.
ZGN has a Quick Ratio of 1.41. This is a bad value and indicates that ZGN is not financially healthy enough and could expect problems in meeting its short term obligations.
With a Quick ratio value of 0.80, ZGN is not doing good in the industry: 68.00% 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
ZGN shows a strong negative growth in Earnings Per Share. In the last year the EPS decreased by -36.78%.
The Earnings Per Share has been growing by 27.50% on average over the past years. This is a very strong growth
The Revenue has been growing slightly by 2.21% in the past year.
The Revenue has been growing by 8.06% on average over the past years. This is quite good.
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 13.62% 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 Y1.17%
EPS Next 2Y9.66%
EPS Next 3Y13.62%
EPS Next 5YN/A
Revenue Next Year-0.56%
Revenue Next 2Y2.22%
Revenue Next 3Y3.44%
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
The Price/Earnings ratio is 25.44, which means the current valuation is very expensive for ZGN.
Compared to the rest of the industry, the Price/Earnings ratio of ZGN is on the same level as its industry peers.
ZGN is valuated at similar levels of the S&P average when we compare the Price/Earnings ratio to 28.04, which is the current average of the S&P500 Index.
Based on the Price/Forward Earnings ratio of 22.21, the valuation of ZGN can be described as rather expensive.
Compared to the rest of the industry, the Price/Forward Earnings ratio of ZGN indicates a slightly more expensive valuation: ZGN is more expensive than 60.00% of the companies listed in the same industry.
ZGN is valuated rather cheaply when we compare the Price/Forward Earnings ratio to 37.64, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 25.44 | ||
| Fwd PE | 22.21 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, ZGN is valued cheaply inside the industry as 84.00% of the companies are valued more expensively.
Compared to the rest of the industry, the Price/Free Cash Flow ratio of ZGN indicates a somewhat cheap valuation: ZGN is cheaper than 76.00% of the companies listed in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 12.85 | ||
| EV/EBITDA | 6.27 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates an expensive valuation of the company.
ZGN's earnings are expected to grow with 13.62% in the coming years. This may justify a more expensive valuation.
PEG (NY)21.68
PEG (5Y)0.93
EPS Next 2Y9.66%
EPS Next 3Y13.62%
5. Dividend
5.1 Amount
ZGN has a Yearly Dividend Yield of 1.40%.
Compared to an average industry Dividend Yield of 3.58, ZGN pays a bit more dividend than its industry peers.
Compared to the average S&P500 Dividend Yield of 2.31, ZGN is paying slightly less dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.4% |
5.2 History
ZGN has paid a dividend for less than 5 years, so there is no long track record yet.
Dividend Growth(5Y)N/A
Div Incr Years1
Div Non Decr Years2
5.3 Sustainability
ZGN pays out 39.30% of its income as dividend. This is a sustainable payout ratio.
DP39.3%
EPS Next 2Y9.66%
EPS Next 3Y13.62%
9.16
-0.03 (-0.33%)
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 Cap2.31B
Analysts72.73
Price Target9.26 (1.09%)
Short Float %7.75%
Short Ratio3.52
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.4% |
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)2.21%
PT rev (3m)1.88%
EPS NQ rev (1m)N/A
EPS NQ rev (3m)N/A
EPS NY rev (1m)-3.24%
EPS NY rev (3m)-5.86%
Revenue NQ rev (1m)N/A
Revenue NQ rev (3m)N/A
Revenue NY rev (1m)-0.61%
Revenue NY rev (3m)-2.4%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 25.44 | ||
| Fwd PE | 22.21 | ||
| P/S | 1.01 | ||
| P/FCF | 12.85 | ||
| P/OCF | 7.07 | ||
| P/B | 2.15 | ||
| P/tB | 6.54 | ||
| EV/EBITDA | 6.27 |
EPS(TTM)0.36
EY3.93%
EPS(NY)0.41
Fwd EY4.5%
FCF(TTM)0.71
FCFY7.78%
OCF(TTM)1.3
OCFY14.14%
SpS9.04
BVpS4.25
TBVpS1.4
PEG (NY)21.68
PEG (5Y)0.93
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 | 1.68 |
F-Score5
WACC7.74%
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 Y1.17%
EPS Next 2Y9.66%
EPS Next 3Y13.62%
EPS Next 5YN/A
Revenue 1Y (TTM)2.21%
Revenue growth 3Y14.63%
Revenue growth 5Y8.06%
Sales Q2Q%72.97%
Revenue Next Year-0.56%
Revenue Next 2Y2.22%
Revenue Next 3Y3.44%
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%