Erg SPA (ERG) AI Stock Analysis

• Market Cap: €2.62B
• Dividend Yield: 5.7%
• Average Volume (3M): 299.27K
• Price to Earnings (P/E): 13.7
• Beta (1Y): 0.51
• Revenue Growth: -0.39%
• EPS Growth: 6.12%
• Country: IT
• Employees: 660
• Sector: Industrials
• Sector Strength: 80
• Industry: Renewable Utilities
• EPS (TTM): 1.28
• Shares Outstanding: 150,320,000
• 10 Day Avg. Volume: 221,592
• 30 Day Avg. Volume: 299,267
• PEG Ratio: 2.24
• Price to Book (P/B): N/A
• Price to Sales (P/S): 0.00
• Price to Cash Flow (P/CF): 0.00
• P/FCF Ratio: 0.00
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: €21.22
• Price Target Upside: 20.98% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 5

Erg SPA has strong operational efficiency and prudent financial management, but the decline in revenue and fluctuating cash flows pose challenges to financial health. The technical indicators suggest bearish market sentiment, though the company's valuation is attractive with a reasonable P/E ratio and a high dividend yield. The stock score reflects a mix of stable core operations and potential market concerns.

Positive Factors

Future Earnings Potential

The company expects EBITDA to materially improve due to full-year consolidation of US assets and new organic capacity.

Market Position

Current share price is not reflecting the company financial visibility, thus offering a good entry point for investors.

Sector Outlook

The environment in the renewables sector is improving materially.

Negative Factors

Guidance Adjustment

The company's FY24 EBITDA guidance was narrowed due to exceptionally poor wind conditions.

International Market Challenges

Lower power prices abroad affected the company's estimates, leading to a decrease in FY24E EBITDA and adjusted net income.

Pricing Challenges

Lower production abroad due to pricing challenges has impacted the company's financial forecasts.

Erg SPA Business Overview & Revenue Model

Company Description

ERG S.p.A. is an Italian company primarily engaged in the energy sector, focusing on the production of electricity from renewable resources. With a strong emphasis on sustainability, ERG operates in various segments including wind, solar, and hydroelectric power generation. The company is committed to transitioning towards a low-carbon economy by leveraging its expertise in renewable energy development and management.

How the Company Makes Money

ERG S.p.A. generates revenue through the production and sale of electricity derived from renewable energy sources. The company operates wind farms, solar plants, and hydroelectric facilities, selling the electricity they produce to national grids and energy markets. Additionally, ERG benefits from government incentives and subsidies for renewable energy production, which further support its earnings. Key partnerships with technology providers and energy companies enhance its operational capabilities and market reach, contributing to its financial performance.

Erg SPA Financial Statement Overview

Summary

Erg SPA maintains stable profitability and operational efficiency but faces challenges with declining revenues and fluctuating cash flows. The balance sheet reflects prudent financial management with moderate leverage. Overall, the company shows resilience but needs to address revenue growth to improve financial health.

Income Statement

Erg SPA shows a stable gross profit margin, indicating efficient cost management. However, the net profit margin has been decreasing due to rising expenses, and revenue has declined over the last few years. Despite this, the EBIT and EBITDA margins are relatively healthy, suggesting robust operational performance.

Balance Sheet

The company's debt-to-equity ratio is moderate, reflecting balanced leverage. The equity ratio indicates a strong asset base, but there has been a decline in total assets over time. Return on equity has been fluctuating, indicating variability in generating returns for shareholders.

Cash Flow

The operating cash flow is strong relative to net income, which signifies good cash-generating ability. However, free cash flow growth has been inconsistent, with significant fluctuations in capital expenditures affecting long-term cash sustainability.

Breakdown
Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement		Total Revenue
738.06M	740.94M	713.84M	1.04B	973.70M
	Gross Profit
550.06M	575.81M	408.41M	480.99M	511.45M
	EBIT
271.00M	304.18M	251.32M	162.80M	123.42M
	EBITDA
534.00M	568.48M	462.82M	375.92M	389.69M
	Net Income Common Stockholders
175.00M	178.67M	378.94M	81.90M	107.89M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
0.00	709.26M	392.81M	1.44B	740.41M
	Total Assets
6.32B	5.20B	5.33B	6.00B	4.53B
	Total Debt
3.09B	2.34B	2.28B	3.54B	2.22B
	Net Debt
2.48B	1.87B	1.89B	2.68B	1.57B
	Total Liabilities
4.09B	3.06B	3.28B	4.44B	2.76B
	Stockholders Equity
2.15B	2.13B	2.05B	1.56B	1.76B
Cash Flow		Free Cash Flow
250.24M	576.75M	82.30M	-242.15M	298.96M
	Operating Cash Flow
484.17M	882.52M	429.78M	30.59M	410.74M
	Investing Cash Flow
-707.13M	-316.54M	758.84M	-727.27M	-167.65M
	Financing Cash Flow
356.35M	-491.22M	-1.67B	901.46M	-241.05M

Erg SPA Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 17.54
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For IT:ERG, the sentiment is Negative. The current price of 17.54 is above the 20-day moving average (MA) of 17.52, below the 50-day MA of 17.66, and below the 200-day MA of 20.64, indicating a neutral trend. The MACD of 0.07 indicates Negative momentum. The RSI at 47.15 is Neutral, neither overbought nor oversold. The STOCH value of 46.67 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for IT:ERG.

Erg SPA Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
TRN	78 Outperform	€17.55B	16.54	16.33%	3.94%	17.85%	19.80%
SRG	75 Outperform	€16.93B	13.48	16.18%	5.63%	-16.40%	10.90%
ENEL	73 Outperform	€78.17B	11.58	27.10%	5.55%	-17.34%	104.14%
HER	69 Neutral	€6.11B	12.18	13.89%	3.36%	-13.48%	12.42%
ERG	67 Neutral	€2.62B	13.72	8.74%	5.70%	-0.39%	6.12%
ENI	67 Neutral	€38.70B	15.07	4.83%	7.75%	-1.16%	-23.76%
Sector *	64 Neutral	$4.24B	11.64	5.23%	249.83%	4.07%	-10.54%