Ermenegildo Zegna (ZGN) AI Stock Analysis

• Market Cap: $4.35B
• Dividend Yield: 1.29%
• Average Volume (3M): 539.21K
• Price to Earnings (P/E): 26.0
• 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: 508,521
• 30 Day Avg. Volume: 539,205
• 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: 0.74
• Enterprise Value/Revenue: 1.68
• Enterprise Value/Gross Profit: 2.50
• Enterprise Value/Ebitda: 12.66
• 1Y Price Target: $11.40
• Price Target Upside: 4.59% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 8
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 74 Outperform
• Price Target: $12.00 ▲(10.09% Upside)

Ermenegildo Zegna's stock is supported by strong technical momentum and solid financial performance, despite valuation concerns and mixed earnings call results. The company's growth in revenue and gross margins are positive, but declining profitability and increased leverage warrant caution.

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 (ZGN) is an Italian luxury fashion house founded in 1910, renowned for its high-quality men's clothing, particularly suits, tailoring, and accessories. The company operates in the luxury apparel sector, offering a range of products including ready-to-wear collections, bespoke tailoring, and a selection of leather goods. Zegna is also known for its commitment to sustainable practices, integrating eco-friendly materials and production processes into its offerings. The brand caters to affluent consumers worldwide, positioning itself as a leader in men's luxury fashion.

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 margins and increased leverage are concerning. Cash generation is solid, though higher capital expenditures have reduced free cash flow.

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: 10.90
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Negative

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 10.9 is above the 20-day moving average (MA) of 10.18, above the 50-day MA of 10.02, and above the 200-day MA of 8.64, indicating a bullish trend. The MACD of 0.21 indicates Negative momentum. The RSI at 64.51 is Neutral, neither overbought nor oversold. The STOCH value of 85.26 is Negative, 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	78 Outperform	$21.59B	26.29	34.01%	0.97%	12.32%	29.40%
ZGN	74 Outperform	$4.35B	26.00	10.58%	1.29%	-1.88%	-5.94%
COLM	68 Neutral	$2.94B	16.44	10.84%	2.17%	2.76%	-7.83%
LEVI	64 Neutral	$8.64B	19.06	25.99%	2.41%	3.20%	200.49%
PVH	64 Neutral	$4.08B	9.50	9.32%	0.17%	-1.14%	-29.30%
Sector *	61 Neutral	$18.38B	12.79	-2.54%	3.03%	1.52%	-15.83%
VFC	59 Neutral	$6.92B	78.27	6.39%	1.93%	-4.56%	―

Ermenegildo Zegna Corporate Events

Ermenegildo Zegna Group Announces Leadership Restructuring for 2026

On November 24, 2025, Ermenegildo Zegna Group announced a significant leadership restructuring effective January 1, 2026, as part of its succession planning. Gildo Zegna will transition to Group Executive Chairman, focusing on brand legacy and long-term value creation, while Gianluca Tagliabue will become Group CEO, tasked with executing the Group’s strategy and enhancing corporate functions. Edoardo and Angelo Zegna, fourth-generation family members, will be appointed Co-CEOs of the ZEGNA brand, continuing the family legacy and strengthening the brand’s heritage.

Ermenegildo Zegna Reports Q3 2025 Revenue Growth Driven by DTC Success

On October 23, 2025, Ermenegildo Zegna announced its unaudited revenues for the first nine months of 2025, totaling €1.33 billion, a slight decline of 2.3% year-over-year. However, the third quarter showed a positive trend with revenues of €398.2 million, marking a 0.2% increase year-over-year and a 3.6% organic growth. The company highlighted robust growth in its DTC channel, with all brands, including ZEGNA, Thom Browne, and TOM FORD FASHION, showing solid performance. Despite challenges such as consumer demand uncertainties and currency fluctuations, the company remains optimistic about achieving its mid-term targets.

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.