Erg SPA (ERG) AI Stock Analysis

• Market Cap: €3.36B
• Dividend Yield: 4.42%
• Average Volume (3M): 257.07K
• Price to Earnings (P/E): 24.0
• Beta (1Y): 0.34
• Revenue Growth: -3.04%
• EPS Growth: -39.96%
• Country: IT
• Employees: 660
• Sector: Services
• Sector Strength: N/A
• Industry: Renewable Utilities
• EPS (TTM): 0.57
• Shares Outstanding: 150,320,000
• 10 Day Avg. Volume: 300,009
• 30 Day Avg. Volume: 257,071
• PEG Ratio: 2.46
• Price to Book (P/B): 1.34
• Price to Sales (P/S): 3.89
• P/FCF Ratio: 11.48
• 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: €22.63
• Price Target Upside: 0.58% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 4

• Rating: 67 Neutral
• Price Target: ―

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

Negative Factors

Erg SPA Business Overview & Revenue Model

Company Description

ERG S.p.A., through its subsidiaries, produces energy through renewable sources in Italy, France, Germany, Poland, Bulgaria, and Romania. The company generates electricity through wind, solar, hydroelectric, and thermoelectric power plants, as well as natural gas cogeneration plants. As of December 31, 2021, it had wind farms installed capacity of 2,198 MW; solar plants installed capacity of 220 MW; hydroelectric plants installed capacity of 527 MW; and thermoelectric plants installed capacity of 480 MW. The company was founded in 1938 and is headquartered in Genoa, Italy. ERG S.p.A. is a subsidiary of San Quirico S.p.A.

How the Company Makes Money

ERG generates revenue through several key streams. The primary source of income comes from the sale of electricity generated by its wind and solar power facilities, which benefit from government incentives aimed at promoting renewable energy. Additionally, ERG earns revenue from the sale of natural gas and from energy trading activities. The company has established significant partnerships with various stakeholders in the energy sector, which enhances its market presence and profitability. Furthermore, ERG's strategic investments in renewable energy projects allow it to capitalize on the growing demand for sustainable energy, contributing to its overall earnings.

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	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	734.19M	738.06M	740.94M	713.84M	601.41M	973.70M
Gross Profit	540.23M	550.06M	575.81M	408.41M	433.41M	511.45M
EBITDA	524.07M	534.00M	563.02M	462.82M	375.92M	389.69M
Net Income	124.28M	175.00M	178.67M	378.94M	172.90M	107.89M
Balance Sheet
Total Assets	5.70B	6.32B	5.20B	5.33B	6.00B	4.53B
Cash, Cash Equivalents and Short-Term Investments	495.66M	1.05B	709.26M	633.70M	1.28B	740.41M
Total Debt	2.69B	3.09B	2.34B	2.28B	3.54B	2.22B
Total Liabilities	3.60B	4.09B	3.06B	3.28B	4.44B	2.76B
Stockholders Equity	2.02B	2.15B	2.13B	2.05B	1.56B	1.76B
Cash Flow
Free Cash Flow	284.10M	250.24M	576.75M	82.30M	-242.15M	298.96M
Operating Cash Flow	464.22M	484.17M	882.52M	429.78M	30.59M	410.74M
Investing Cash Flow	-257.58M	-707.13M	-316.54M	758.84M	-727.27M	-167.65M
Financing Cash Flow	-135.21M	356.35M	-491.22M	-1.67B	831.59M	-241.05M

Erg SPA Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 22.50
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• 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 Positive. The current price of 22.5 is above the 20-day moving average (MA) of 21.93, above the 50-day MA of 20.84, and above the 200-day MA of 18.59, indicating a bullish trend. The MACD of 0.53 indicates Positive momentum. The RSI at 69.06 is Neutral, neither overbought nor oversold. The STOCH value of 54.71 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for IT:ERG.

Erg SPA Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
ARN	70 Outperform	€1.03B	12.26	26.22%	3.19%	30.89%	143.25%
HER	68 Neutral	€5.75B	11.17	13.98%	3.78%	16.50%	24.03%
ERG	67 Neutral	€3.36B	24.03	6.61%	4.42%	-3.04%	-39.96%
Sector *	55 Neutral	$13.29B	17.42	10.03%	0.93%	7.13%	-12.93%