Ermenegildo Zegna N.V. Fundamental Analysis (NYSE: ZGN)
Ermenegildo Zegna N.V. Fundamental Analysis (NYSE: ZGN)
Ermenegildo Zegna N.V. (NYSE: ZGN) shows weak financial fundamentals with a PE ratio of 35.18, profit margin of 3.96%, and ROE of 7.60%. The company generates $2.0B in annual revenue with weak year-over-year growth of -5.41%.
Key Strengths
Areas of Concern
The stock receives a Fundamental Health Score of 23.1/100 based on profitability, valuation, growth, and balance sheet metrics. The F grade reflects weak fundamentals and significant financial concerns.
Fundamental Health Score
We analyze ZGN's fundamental strength across five key dimensions:
Efficiency Score
WeakZGN struggles to generate sufficient returns from assets.
Valuation Score
ModerateZGN shows balanced valuation metrics.
Growth Score
ModerateZGN shows steady but slowing expansion.
Financial Health Score
ModerateZGN shows balanced financial health with some risks.
Profitability Score
WeakZGN struggles to sustain strong margins.
Key Financial Metrics
Is ZGN Expensive or Cheap?
P/E Ratio
ZGN trades at 35.18 times earnings. This suggests a premium valuation.
PEG Ratio
When adjusting for growth, ZGN's PEG of -1.89 indicates potential undervaluation.
Price to Book
The market values Ermenegildo Zegna N.V. at 2.61 times its book value. This may indicate undervaluation.
EV/EBITDA
Enterprise value stands at 4.29 times EBITDA. This is generally considered low.
How Well Does ZGN Make Money?
Net Profit Margin
For every $100 in sales, Ermenegildo Zegna N.V. keeps $3.96 as profit after all expenses.
Operating Margin
Core operations generate 8.53 in profit for every $100 in revenue, before interest and taxes.
ROE
Management delivers $7.60 in profit for every $100 of shareholder equity.
ROA
Ermenegildo Zegna N.V. generates $2.54 in profit for every $100 in assets, demonstrating efficient asset deployment.
Following the Money - Real Cash Generation
Operating Cash Flow
Ermenegildo Zegna N.V. produces operating cash flow of $394.55M, showing steady but balanced cash generation.
Free Cash Flow
Ermenegildo Zegna N.V. generates strong free cash flow of $301.34M, providing ample flexibility for dividends, buybacks, or growth.
FCF Per Share
Each share generates $1.12 in free cash annually.
FCF Yield
ZGN converts 11.22% of its market value into free cash.
Financial Ratios Analysis
Valuation Ratios
P/E Ratio
Price to earnings ratio
35.18
vs 25 benchmark
PEG Ratio
Price/earnings to growth ratio
-1.89
vs 25 benchmark
P/B Ratio
Price to book value ratio
2.61
vs 25 benchmark
P/S Ratio
Price to sales ratio
1.37
vs 25 benchmark
Financial Health
Debt/Equity
Total debt to shareholders' equity
1.11
vs 25 benchmark
Current Ratio
Current assets to current liabilities
1.47
vs 25 benchmark
Efficiency Ratios
ROE
Return on equity percentage
0.08
vs 25 benchmark
ROA
Return on assets percentage
0.03
vs 25 benchmark
ROCE
Return on capital employed
0.07
vs 25 benchmark
How ZGN Stacks Against Its Sector Peers
| Metric | ZGN Value | Sector Average | Performance |
|---|---|---|---|
| P/E Ratio | 35.18 | 24.30 | Worse (Expensive) |
| ROE | 7.60% | 1022.00% | Weak |
| Net Margin | 3.96% | -2981.00% (disorted) | Weak |
| Debt/Equity | 1.11 | 0.58 | Weak (High Leverage) |
| Current Ratio | 1.47 | 2.32 | Neutral |
| ROA | 2.54% | 447.00% | Weak |
ZGN outperforms its industry in 0 out of 6 key metrics, but lagging in P/E Ratio.
Historical Growth Performance
5-Year Growth Trajectory
This section reviews Ermenegildo Zegna N.V.'s 5-year compound annual growth rate (CAGR) and compares its performance against the typical investment style of its industry.
Revenue CAGR
54.33%
Industry Style: Cyclical, Growth, Discretionary
High GrowthEPS CAGR
260.08%
Industry Style: Cyclical, Growth, Discretionary
High GrowthFCF CAGR
288.66%
Industry Style: Cyclical, Growth, Discretionary
High Growth