Ermenegildo Zegna (ZGN) AI Stock Analysis

• Market Cap: $4.09B
• Dividend Yield: 1.33%
• Average Volume (3M): 571.50K
• Price to Earnings (P/E): 23.9
• Beta (1Y): 1.25
• Revenue Growth: -1.88%
• EPS Growth: -5.94%
• Country: US
• Employees: 7,185
• Sector: Consumer Cyclical
• Sector Strength: 84
• Industry: Apparel - Manufacturers
• EPS (TTM): 0.31
• Shares Outstanding: 254,089,370
• 10 Day Avg. Volume: 642,963
• 30 Day Avg. Volume: 571,498
• PEG Ratio: 1.24
• Price to Book (P/B): 2.20
• Price to Sales (P/S): 1.23
• P/FCF Ratio: 9.35
• Enterprise Value/Market Cap: 0.72
• Enterprise Value/Revenue: 1.55
• Enterprise Value/Gross Profit: 2.51
• Enterprise Value/Ebitda: 9.06
• 1Y Price Target: $11.77
• Price Target Upside: 21.59% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 7
• EPS Forecast (FY): 0.39
• Revenue Forecast (FY): $2.00B

• Rating: 61 Neutral
• Price Target: $10.00 ▲(3.31% Upside)
• Action: Reiterated Date: 03/22/26
• Date: Action: Reiterated 03/22/26

The score is anchored by solid financial quality—especially strong free cash flow and improving leverage—supported by an attractive P/E. These positives are tempered by weakening revenue/margin trends and a clearly bearish technical backdrop, while the latest call reinforces a mixed operating picture with margin pressure outside the core Zegna segment.

Positive Factors

Strong free cash flow generation

Material and growing FCF provides durable funding for store investment, IT, dividends and debt reduction. Sustained FCF (coverage ~55%–75% of earnings) reduces reliance on external financing and supports strategic flexibility even if revenue growth moderates.

Direct-to-consumer (DTC) mix and margin tailwind

A higher DTC share gives Zegna pricing control, richer retail margin and customer data, which supports enduring gross-margin resilience. This structural channel shift reduces wholesale exposure and can sustain margins and lifetime customer value over the medium term.

Vertically integrated production and brand portfolio

Integrated 'Filiera' manufacturing and multiple premium brands provide quality control, supply resilience and product differentiation. This vertical edge lowers procurement risk, supports innovation and helps protect brand positioning across cycles.

Negative Factors

Turning revenue growth negative in 2025

A full-year revenue decline erodes pricing and scale advantages, constrains operating leverage and makes recovery dependent on sustained DTC momentum and regional demand. Continued top-line weakness would pressure margins and returns over the next several quarters.

Segment profitability pressure (Thom Browne, Tom Ford)

Material underperformance in non-core brands reduces group margin resilience and requires ongoing capital or margin support. If these segments need prolonged investment or restructuring, they could weigh on consolidated profits and distract management focus for multiple quarters.

Higher SG&A and negative operating leverage

Rising SG&A incidence erodes operating margins and makes profit outcomes more sensitive to revenue swings. Persistently elevated cost intensity from store openings and investments could limit margin recovery unless top-line growth or efficiency gains materialize.

Ermenegildo Zegna Business Overview & Revenue Model

Company Description

Ermenegildo Zegna N.V., together with its subsidiaries, designs, manufactures, markets, and distributes luxury menswear, footwear, leather goods, and other accessories under the Zegna and the Thom Browne brands. It provides luxury leisurewear for men; formal suits, tuxedos, shirts, blazers, formal overcoats, and accessories; leather accessories comprising shoes, bags, belts, and small leather accessories; and fragrances. The company also offers luxury womenswear and childrenswear under the Thom Browne brand, as well as provides eyewear, cufflinks and jewelry, watches, underwear, and beachwear manufactured by third parties under licenses. It serves customers through its retail stores and online channels in Europe, the Middle East, Africa, North America, Latin America, the Asia Pacific, and internationally. The company was founded in 1910 and is based in Trivero, Italy. Ermenegildo Zegna N.V. is a subsidiary of Monterubello Societa' Semplice.

How the Company Makes Money

The company primarily makes money by selling luxury goods across its brands through two main routes: (1) Direct-to-consumer (DTC) sales and (2) wholesale distribution. DTC revenue is generated via the group’s own retail stores and e-commerce, capturing the full retail margin and enabling control over brand presentation, pricing, merchandising, and customer data; this stream includes sales of ready-to-wear apparel, leather goods, footwear, accessories, and other brand offerings (product mix varies by brand and season). Wholesale revenue comes from selling products to third-party luxury retailers and department stores, where the group earns a wholesale margin and expands distribution without bearing the full fixed costs of operating every point of sale. In addition to branded product sales, Zegna has historically operated textile activities (notably fine fabrics) that can contribute revenue through supplying materials; the extent and breakdown of these activities are null. Key factors that typically influence earnings include brand strength and pricing power in luxury, the performance and expansion of the retail store network, e-commerce penetration, product mix (e.g., higher-margin leather goods and accessories versus apparel), regional demand trends, and foreign exchange impacts given global sales. Specific quantitative revenue splits by stream, margins, and the materiality of any licensing, royalties, or named partnerships are null.

Ermenegildo Zegna Financial Statement Overview

Summary

Solid overall fundamentals driven by strong cash generation (FCF up sharply in 2025 and sizable absolute FCF), with improving leverage over time. Offsetting this, revenue turned negative in 2025 and margins softened versus 2024, limiting operating leverage and near-term earnings momentum.

Income Statement

Profitability has normalized well since the 2020–2021 losses, with positive operating profit and net income in each of the last four annual periods. Margins are moderate (2025 gross margin ~56% and net margin ~5%), but have come under pressure versus 2024 (notably a lower gross margin). The main near-term concern is the revenue trajectory: growth was strong in 2022–2023, modest in 2024, and turned negative in 2025 (-3.81%), which limits operating leverage despite still-positive earnings.

Balance Sheet

Leverage remains meaningful, though improving: debt-to-equity declined from ~1.77–1.79x (2020–2021) to ~0.95x in 2025 as equity built up. Returns on equity are positive and steady in the high-single digits to low-teens range recently (~9% in 2025), but below the 2023 peak (~14%), suggesting profitability has softened. Overall, the balance sheet looks more stable than in prior years, but debt is still sizable relative to equity and could constrain flexibility if demand weakens.

Cash Flow

Cash generation is a relative strength. Operating cash flow and free cash flow were solid in 2025 (about $322M and $242M, respectively), and free cash flow growth accelerated sharply (+42.3% in 2025) after a weaker 2024. Free cash flow has consistently covered a large portion of earnings (roughly 55%–75% in 2023–2025), supporting reinvestment and balance-sheet improvement. A watch item is that operating cash flow coverage is not especially high (sub-0.5 in recent years), implying cash conversion can fluctuate and should be monitored alongside working-capital swings.

Breakdown	Dec 2025	Dec 2024	Mar 2024	Mar 2023	Mar 2022
Income Statement
Total Revenue	1.84B	1.95B	1.90B	1.49B	1.29B
Gross Profit	1.02B	1.30B	1.22B	928.01M	925.13M
EBITDA	391.75M	406.23M	392.95M	335.50M	71.14M
Net Income	94.69M	77.08M	121.53M	51.48M	-136.00M
Balance Sheet
Total Assets	2.83B	2.83B	2.77B	2.43B	2.46B
Cash, Cash Equivalents and Short-Term Investments	295.68M	296.13M	387.03M	580.29M	800.17M
Total Debt	977.36M	1.04B	996.35M	914.56M	1.07B
Total Liabilities	1.73B	1.85B	1.87B	1.69B	1.81B
Stockholders Equity	1.03B	916.12M	840.29M	678.95M	601.21M
Cash Flow
Free Cash Flow	242.19M	153.60M	197.50M	73.10M	186.83M
Operating Cash Flow	322.32M	279.13M	275.38M	146.40M	281.15M
Investing Cash Flow	-105.58M	-126.01M	21.79M	-57.34M	-82.00M
Financing Cash Flow	-206.57M	-234.53M	-250.49M	-297.00M	-64.11M

Ermenegildo Zegna Technical Analysis

• Technical Analysis Sentiment: Neutral
• Last Price: 9.68
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For ZGN, the sentiment is Neutral. The current price of 9.68 is below the 20-day moving average (MA) of 10.47, below the 50-day MA of 10.35, and above the 200-day MA of 9.63, indicating a neutral trend. The MACD of -0.28 indicates Positive momentum. The RSI at 45.88 is Neutral, neither overbought nor oversold. The STOCH value of 28.99 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for ZGN.

Ermenegildo Zegna Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
RL	69 Neutral	$20.53B	15.13	34.74%	0.93%	12.32%	29.40%
PVH	64 Neutral	$3.04B	215.89	6.99%	0.22%	0.52%	-45.80%
COLM	63 Neutral	$2.88B	17.00	10.53%	2.18%	2.76%	-7.83%
Sector *	61 Neutral	$18.38B	12.79	-2.54%	3.03%	1.52%	-15.83%
ZGN	61 Neutral	$4.09B	23.92	10.58%	1.33%	-1.88%	-5.94%
LEVI	60 Neutral	$7.27B	15.25	27.00%	2.58%	-1.23%	109.67%
VFC	53 Neutral	$6.63B	6.01	14.79%	1.95%	-3.12%	―

Ermenegildo Zegna Corporate Events

Ermenegildo Zegna Lifts 2025 Profit 20% and Swings to Cash Surplus Despite Slight Revenue Dip

On March 20, 2026, Ermenegildo Zegna reported its full-year 2025 results, showing a 20% year-on-year rise in profit to €109.5 million despite a 1.5% decline in reported revenues to €1,916.9 million. The group improved its gross margin to 67.5%, lifted its direct-to-consumer share of branded revenues to 82%, and moved from €94 million in net financial debt at the end of 2024 to a €52 million cash surplus, while proposing a €0.12 dividend per ordinary share.

Brand performance was mixed in 2025, with the core ZEGNA label growing revenues, TOM FORD FASHION posting modest gains, and Thom Browne suffering a double-digit sales decline that contributed to negative operating leverage. Adjusted EBIT fell to €163 million, including a €10 million provision tied to expected losses on Saks Global receivables after its Chapter 11 filing, but higher financial income, foreign-exchange gains, and a lower effective tax rate supported bottom-line growth as management signaled a focus on disciplined growth and cash generation amid macro uncertainty, particularly in the Middle East.

The most recent analyst rating on (ZGN) stock is a Hold with a $11.00 price target. To see the full list of analyst forecasts on Ermenegildo Zegna stock, see the ZGN Stock Forecast page.

Ermenegildo Zegna Files 2025 Form 20-F With U.S. Regulators

Ermenegildo Zegna N.V., the Milan-based parent of the Ermenegildo Zegna Group, operates as a global luxury leader in high-end menswear and fashion. Its portfolio spans ZEGNA’s classic luxury, Thom Browne’s modern tailoring and TOM FORD FASHION’s elegant designs, all supported by a fully integrated Italian textile and manufacturing network that generated €1.92 billion in revenue in 2025.

On March 20, 2026, the company announced it had filed its annual report on Form 20-F with the U.S. Securities and Exchange Commission, covering financial statements for the fiscal year ended December 31, 2025. The filing, now available via Zegna’s investor website and in hard copy on request, marks the completion of the group’s formal U.S. reporting cycle for 2025 and provides shareholders and market participants with audited transparency into its latest financial performance.

The most recent analyst rating on (ZGN) stock is a Hold with a $11.00 price target. To see the full list of analyst forecasts on Ermenegildo Zegna stock, see the ZGN Stock Forecast page.

Ermenegildo Zegna Sets March 20 Date to Unveil 2025 Results

Ermenegildo Zegna N.V., the NYSE-listed parent of the Ermenegildo Zegna Group, said on March 6, 2026, that it will publish its full-year 2025 financial results on March 20, 2026. The company will host a conference call and live webcast shortly after the release and make related materials and a replay available on its investor relations website, signaling an upcoming detailed update for investors and analysts on its recent performance.

The announcement underscores the group’s commitment to transparency and engagement with the capital markets as it manages its portfolio of luxury menswear and fashion brands. With a vertically integrated Italian production base and €1.92 billion in 2025 revenues, the scheduled disclosure is likely to be closely watched by stakeholders assessing Zegna’s momentum in the global luxury sector and its positioning against peers.

The most recent analyst rating on (ZGN) stock is a Hold with a $11.00 price target. To see the full list of analyst forecasts on Ermenegildo Zegna stock, see the ZGN Stock Forecast page.

Ermenegildo Zegna Posts Slight 2025 Revenue Dip as DTC Strategy and Leadership Transition Take Hold

On February 2, 2026, Ermenegildo Zegna Group reported preliminary, unaudited revenues of €1.9169 billion for fiscal year 2025, down 1.5% year-on-year but up 1.1% on an organic basis, reflecting a deliberate shift toward its direct-to-consumer (DTC) strategy and away from wholesale. Fourth-quarter 2025 revenues edged up 0.3% year-on-year to €591.0 million, or 4.6% on an organic basis, with DTC sales rising 3.9% reported and 9.6% organic, and the Americas and EMEA outperforming other regions. By brand, ZEGNA posted modest full-year growth (+1.5% reported, +4.7% organic) and accelerated in Q4 (+2.4% reported, +7.4% organic), while Thom Browne declined for the year as wholesale was streamlined despite double‑digit DTC growth, and TOM FORD FASHION delivered slightly higher full-year sales but softer Q4 on a reported basis. The Group also highlighted a generational leadership transition completed in 2025, with Gianluca Tagliabue becoming Group CEO and family members Edoardo and Angelo Zegna taking charge of the ZEGNA brand, underscoring a strategy centered on brand elevation, DTC expansion and the company’s vertically integrated “Filiera” as it navigates a volatile macro environment.

The most recent analyst rating on (ZGN) stock is a Buy with a $11.90 price target. To see the full list of analyst forecasts on Ermenegildo Zegna stock, see the ZGN Stock Forecast page.

Ermenegildo Zegna to Release FY 2025 Preliminary Revenues on February 2, 2026

On January 20, 2026, Ermenegildo Zegna Group announced it will publish preliminary revenue figures for full-year 2025 on February 2, 2026, followed by a conference call and live webcast for investors and analysts. The release of these preliminary numbers, coming off 2024 revenues of €1.95 billion, is set to give markets an early indication of the luxury menswear group’s trading performance and momentum ahead of its full financial disclosure, and will be closely watched by stakeholders assessing Zegna’s positioning in the global high-end fashion sector.

The most recent analyst rating on (ZGN) stock is a Buy with a $11.90 price target. To see the full list of analyst forecasts on Ermenegildo Zegna stock, see the ZGN Stock Forecast page.