Ermenegildo Zegna (ZGN) AI Stock Analysis

• Market Cap: $4.09B
• Dividend Yield: 1.41%
• Average Volume (3M): 914.28K
• Price to Earnings (P/E): 24.5
• Beta (1Y): 1.28
• Revenue Growth: -1.88%
• EPS Growth: -5.94%
• Country: US
• Employees: 7,185
• Sector: Consumer Cyclical
• Sector Strength: 84
• Industry: Apparel - Manufacturers
• EPS (TTM): 0.20
• Shares Outstanding: 254,089,370
• 10 Day Avg. Volume: 851,318
• 30 Day Avg. Volume: 914,284
• PEG Ratio: -0.73
• Price to Book (P/B): 2.19
• Price to Sales (P/S): 1.03
• P/FCF Ratio: 13.06
• Enterprise Value/Market Cap: 0.78
• Enterprise Value/Revenue: 1.68
• Enterprise Value/Gross Profit: 2.50
• Enterprise Value/Ebitda: 12.66
• 1Y Price Target: $10.98
• Price Target Upside: 9.80% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 9

• Rating: 71 Outperform
• Price Target: $10.50 ▲(5.00% Upside)

Ermenegildo Zegna's stock score reflects strong revenue growth and solid cash generation, tempered by declining profit margins and increased leverage. The earnings call provided mixed signals, with strong performance in some segments but challenges in others. Technical indicators suggest mild bullish momentum, while valuation metrics indicate moderate pricing.

Positive Factors

Revenue Growth

The 30% revenue growth over two years indicates strong demand for Zegna's products and effective market expansion, supporting long-term business sustainability.

Direct-to-Consumer Performance

The strong DTC performance enhances margins and customer engagement, reducing reliance on wholesale channels and improving profitability.

Zegna Segment Margin Improvement

Margin improvement in the core Zegna segment reflects effective cost management and pricing power, contributing to long-term profitability.

Negative Factors

Declining Net Profit Margin

The decline in net profit margin suggests rising costs or inefficiencies, which could pressure future earnings and require strategic adjustments.

Increased Leverage

Higher leverage increases financial risk and could limit flexibility in adverse conditions, necessitating careful debt management.

Thom Browne Segment Challenges

The significant EBIT decline in Thom Browne highlights challenges in the wholesale channel, potentially affecting overall growth and profitability.

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

Ermenegildo Zegna generates revenue primarily through the sale of its luxury apparel and accessories, with key revenue streams including direct-to-consumer sales from its retail stores and e-commerce platforms, as well as wholesale distribution to high-end department stores and boutiques. The company benefits from a strong brand reputation and customer loyalty, allowing it to command premium pricing for its products. Additionally, Zegna's bespoke tailoring services offer a unique value proposition, attracting clients seeking customized luxury garments. Strategic partnerships with other luxury brands and collaborations enhance its market presence and contribute to revenue growth. The company is also focusing on expanding its global footprint, particularly in emerging markets, which presents further opportunities for revenue generation.

Ermenegildo Zegna Financial Statement Overview

Summary

Ermenegildo Zegna shows strong revenue growth and robust gross margins, but declining net profit margin and increased leverage are concerns. Stable cash generation is offset by reduced free cash flow due to higher capital expenditures.

Income Statement

Ermenegildo Zegna has demonstrated a steady revenue growth trajectory, with total revenue increasing from $1.49 billion in 2022 to $1.95 billion in 2024, showing a notable 30% growth over two years. The gross profit margin improved to 66.6% in 2024, indicating strong cost management. However, the net profit margin has decreased to 3.96% in 2024 from 6.38% in 2023, suggesting rising expenses or lower operational efficiency. The EBIT margin is stable at 8.57%, but the declining EBITDA margin from 20.63% in 2023 to 20.87% in 2024 indicates pressure on operating profitability.

Balance Sheet

The company's debt-to-equity ratio has increased to 1.13 in 2024, reflecting higher leverage, which could pose risks if earnings do not grow as expected. Return on equity (ROE) dropped to 8.41% in 2024 from 14.46% in 2023, showing reduced profitability for shareholders. However, the equity ratio has improved to 32.31% in 2024 from 30.37% in 2023, indicating a healthier balance between debt and equity financing.

Cash Flow

Ermenegildo Zegna's operating cash flow increased slightly to $279 million in 2024, reflecting stable cash-generating operations. The free cash flow, however, dropped to $153.6 million in 2024 from $197.5 million in 2023, due to higher capital expenditures. The free cash flow to net income ratio remains strong at 1.99, suggesting good cash conversion from earnings.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	1.91B	1.95B	1.90B	1.49B	1.29B	1.02B
Gross Profit	1.29B	1.30B	1.22B	928.01M	925.13M	698.77M
EBITDA	253.52M	406.23M	392.95M	335.50M	71.14M	151.03M
Net Income	95.08M	77.08M	121.53M	51.48M	-136.00M	-50.58M
Balance Sheet
Total Assets	2.73B	2.83B	2.77B	2.43B	2.46B	2.42B
Cash, Cash Equivalents and Short-Term Investments	231.22M	296.13M	387.03M	580.29M	800.17M	667.45M
Total Debt	1.03B	1.04B	996.35M	914.56M	1.07B	1.08B
Total Liabilities	1.77B	1.85B	1.87B	1.69B	1.81B	1.77B
Stockholders Equity	885.35M	916.12M	840.29M	678.95M	601.21M	601.76M
Cash Flow
Free Cash Flow	170.17M	153.60M	197.50M	73.10M	186.83M	31.75M
Operating Cash Flow	264.39M	279.13M	275.38M	146.40M	281.15M	70.91M
Investing Cash Flow	-94.32M	-126.01M	21.79M	-57.34M	-82.00M	92.57M
Financing Cash Flow	-228.67M	-234.53M	-250.49M	-297.00M	-64.11M	-49.05M

Ermenegildo Zegna Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 10.00
• 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 ZGN, the sentiment is Positive. The current price of 10 is above the 20-day moving average (MA) of 9.65, above the 50-day MA of 8.98, and above the 200-day MA of 8.36, indicating a bullish trend. The MACD of 0.23 indicates Negative momentum. The RSI at 63.40 is Neutral, neither overbought nor oversold. The STOCH value of 78.71 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for ZGN.

Ermenegildo Zegna Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
RL	77 Outperform	$19.30B	25.42	32.55%	1.08%	9.61%	21.14%
ZGN	71 Outperform	$4.09B	24.46	10.58%	1.41%	-1.88%	-5.94%
LEVI	71 Outperform	$8.47B	18.49	25.99%	2.50%	3.20%	200.49%
PVH	68 Neutral	$3.93B	9.16	9.32%	0.18%	-1.14%	-29.30%
COLM	67 Neutral	$2.79B	12.98	12.93%	2.36%	0.81%	4.86%
Sector *	61 Neutral	$18.38B	12.79	-2.54%	3.03%	1.52%	-15.83%
VFC	51 Neutral	$5.54B	65.24	7.83%	2.54%	-7.41%	―

Ermenegildo Zegna Corporate Events

Ermenegildo Zegna to Announce Q3 2025 Revenues

On October 9, 2025, Ermenegildo Zegna N.V. announced it will release its unaudited revenues for the third quarter of 2025 on October 23, 2025. The announcement will be followed by a conference call and webcast, providing stakeholders an opportunity to engage with the company’s financial disclosures. This upcoming release is significant for stakeholders as it offers insights into the company’s recent financial performance and market positioning.

Ermenegildo Zegna Reports Strong Profit Growth in H1 2025

Ermenegildo Zegna reported its financial results for the first half of 2025, showing a profit increase to €47.9 million, up 53% from the previous year. Despite a slight decline in overall revenues, the company’s direct-to-consumer channel saw growth, and the Zegna segment improved its adjusted EBIT margin, balancing strategic transformations at Thom Browne and Tom Ford Fashion. The company remains committed to its long-term growth targets despite facing sector and currency challenges.

Ermenegildo Zegna Releases Semi-Annual Report Highlighting Financial Performance and Risks

On September 5, 2025, Ermenegildo Zegna N.V. released its semi-annual report for the period ending June 30, 2025. The report highlights the company’s financial performance and outlines various risks and uncertainties that could impact its operations, such as geopolitical tensions, economic instability, and fluctuations in raw material prices. The company also identified material weaknesses in its internal control over financial reporting, which could affect investor confidence and its ability to access capital markets.

Ermenegildo Zegna to Announce First Half 2025 Financial Results on September 5

On August 25, 2025, Ermenegildo Zegna N.V. announced that it will release its financial results for the first half of 2025 on September 5, 2025. The announcement includes details of a conference call and webcast to discuss the results, which will be accessible to stakeholders. This upcoming financial disclosure is significant for stakeholders as it provides insights into the company’s performance and strategic positioning in the luxury fashion market.

Ermenegildo Zegna Announces Leadership Change at Thom Browne

On July 30, 2025, Ermenegildo Zegna N.V. announced that Rodrigo Bazan will step down as CEO of Thom Browne, effective August 31, 2025, to pursue other opportunities. Sam Lobban, known for his innovative merchandising approach, will take over as CEO on September 2, 2025. Under Bazan’s leadership, Thom Browne’s revenue grew to €315 million in 2024, and the brand expanded to 116 stores globally. His tenure was marked by strategic growth and the defense of the brand’s intellectual property rights. The transition is expected to continue the brand’s growth trajectory, with Lobban’s customer-focused and creative vision anticipated to drive further retail expansion.

Ermenegildo Zegna Reports H1 2025 Revenue of €927.7 Million Amid Strategic Shifts

On July 30, 2025, Ermenegildo Zegna announced its H1 2025 revenues of €927.7 million, reflecting a 3% decrease year-on-year. Despite the decline, the company saw a positive performance in its direct-to-consumer channels, with brands like ZEGNA, Thom Browne, and TOM FORD FASHION showing organic growth. The strategic decision to reduce exposure in the wholesale branded channel led to a notable drop in that segment. The company also highlighted key milestones, such as a fashion show outside Milan and the appointment of Sam Lobban as CEO of Thom Browne, alongside a significant investment from Temasek, indicating confidence in Zegna’s long-term growth potential.

Ermenegildo Zegna Partners with Temasek for Strategic Growth

Ermenegildo Zegna Group announced a strategic partnership with Temasek, a Singapore-based investment firm, which will acquire a 10% stake in the Italian luxury group. The transaction, expected to close by July 30, 2025, involves Temasek purchasing 14.1 million treasury shares at $8.95 per share, providing Zegna with $126.4 million in cash. This investment will enhance Zegna’s financial flexibility to support organic growth and expand its global footprint, particularly in underdeveloped markets. The partnership underscores the strength of Zegna’s vision and positions the company to capitalize on its brand momentum, with Temasek’s expertise in the luxury sector expected to contribute to Zegna’s growth prospects.

Ermenegildo Zegna to Announce H1 2025 Revenues on July 30

On July 16, 2025, Ermenegildo Zegna N.V. announced that it will disclose its preliminary revenues for the first half of 2025 on July 30, 2025. The announcement will be followed by a conference call and webcast, providing stakeholders with insights into the company’s financial performance. This upcoming release is significant for stakeholders as it will offer a glimpse into the company’s operational health and market positioning amidst the evolving luxury fashion landscape.