Erg SPA (ERG) AI Stock Analysis

• Market Cap: €3.13B
• Dividend Yield: 4.76%
• Average Volume (3M): 294.40K
• Price to Earnings (P/E): 22.3
• Beta (1Y): 0.38
• 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: 253,101
• 30 Day Avg. Volume: 294,400
• 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: €22.13
• Price Target Upside: 1.98% 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. 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	601.41M	973.70M
Gross Profit	550.06M	575.81M	408.41M	433.41M	511.45M
EBITDA	534.00M	563.02M	462.82M	375.92M	389.69M
Net Income	175.00M	178.67M	378.94M	172.90M	107.89M
Balance Sheet
Total Assets	6.32B	5.20B	5.33B	6.00B	4.53B
Cash, Cash Equivalents and Short-Term Investments	1.05B	709.26M	633.70M	1.28B	740.41M
Total Debt	3.09B	2.34B	2.28B	3.54B	2.22B
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	831.59M	-241.05M

Erg SPA Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 21.70
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• 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 Positive. The current price of 21.7 is above the 20-day moving average (MA) of 20.65, above the 50-day MA of 20.02, and above the 200-day MA of 18.36, indicating a bullish trend. The MACD of 0.34 indicates Negative momentum. The RSI at 68.52 is Neutral, neither overbought nor oversold. The STOCH value of 69.70 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
TRN	72 Outperform	€17.20B	15.69	14.11%	4.62%	10.18%	8.43%
ENI	71 Outperform	€45.61B	18.46	4.99%	6.74%	-6.68%	-33.67%
SRG	68 Neutral	€17.02B	12.28	14.10%	5.72%	-8.04%	30.49%
HER	68 Neutral	€5.60B	10.98	13.31%	3.92%	16.50%	24.03%
ERG	67 Neutral	€3.13B	22.34	6.61%	4.76%	-3.04%	-39.96%
ENEL	64 Neutral	€82.77B	13.00	18.28%	5.43%	-8.26%	24.33%
Sector *	55 Neutral	$13.29B	17.42	10.03%	0.93%	7.13%	-12.93%