Ermenegildo Zegna N.V. (ZGN) Fundamental Analysis: Bull vs. Bear Case

ZGN

Ermenegildo Zegna N.V.

Fundamental data last updated:May 12, 2026

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company profile

SECTOR

Consumer Cyclical

industry

Apparel - Manufacturers

Exchange

NYSE

County of HQ

IT

Next Earnings Date

09/03/2026

Business Summary

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.

VALUATION

P/E

33.87 Market Cap ($M USD)

$3.37B

Forward P/E

23.92 PEG

0.58 PRICE TO SALES

1.50 PRICE TO BOOK

2.74 EV / EBITDA

11.09 5-Year Average P/E

Free Cash Flow Yield

8.91%

DCF Value

$51.89

Graham Number

$5.69

Price to FCF

11.22 EV to FCF

14.19 Earnings Yield

3.48%

FCF Yield

8.91%

DIVIDEND

Yield

1.13%

Annual Payout

$0.12

Payout Ratio

30.83%

Consecutive Years of Dividend Growth

5-Year Dividend Growth Rate

Financial Health & Profitability

Earnings Per Share

$0.37

Next Year EPS Growth Estimate

$0.52

Next Year Revenue Growth Estimate

$235.81B

Return on Equity (ROE)

10.25%

FREE CASH FLOW

Operating Margin

8.11%

Debt-to-Equity

0.95 Piotroski F-Score

6 Altman Z-Score

3.30 Return on Invested Capital (ROIC)

7.44%

Current Ratio

1.59 Quick Ratio

0.91 Net Debt to EBITDA

2.32 Interest Coverage

3.79 Gross Profit margin

61.59%

FCF PER SHARE

$0.96

REVENUE PER SHARE

$7.21

Gainseekers Quantitative Analysis

Summary

ZGN Ermenegildo Zegna N.V. appears significantly undervalued when juxtaposed with its DCF value, suggesting a potential mispricing by the market. The Forward P/E of 25.03 indicates a more reasonable future valuation compared to its current P/E of 35.52, hinting at expected earnings growth. Despite a modest earnings yield of 3.33%, the Altman Z-score of 3.35 suggests financial stability and low bankruptcy risk. The stock’s price is extended above its 50-Day SMA, indicating potential technical overextension, yet the deep discount to its intrinsic value cannot be ignored.

AI Exposure / Tech Reliance

Operating in the Apparel Manufacturing industry, ZGN is positioned to leverage AI for supply chain optimization and personalized customer experiences. As consumer preferences shift rapidly, the company's ability to integrate tech-driven efficiencies will be crucial. However, the traditional nature of its sector may pose challenges in rapid tech adoption.

The Bull Case

For the discerning GARP investor, ZGN offers compelling strengths. A robust ROIC of 7.44% underscores efficient capital allocation, while a Piotroski F-Score of 6 signals solid financial health. The FCF Yield of 8.52% and a healthy operating margin of 8.11% highlight strong cash generation and pricing power. These metrics suggest a company capable of sustaining growth while delivering shareholder value.

The Bear Case

Despite its strengths, ZGN faces structural risks. The Price/Book ratio of 2.86 and Price/Sales ratio of 1.57 indicate a premium valuation, which may not be justified given the modest earnings yield. The stock's proximity to its 52-week high raises concerns of overvaluation. Additionally, a Quick Ratio below 1 suggests potential liquidity constraints, which could hinder operational flexibility.

Market Sentiment & Smart Money

Short Interest %

Analyst Consensus

Hold

Average Analyst Price Target

$12.83

Institutional Ownership %

1-Year Beta

0.82 Insider Buying % (6 Mo)

Distance to 52-Week High

6.61%

Distance to 52-Week Low

39.40%

EARNINGS SURPRISE %

47.67%

50-DAY SMA

$11.07

200-DAY SMA

$10.07

⚠️ Financial Disclaimer:
This content is for informational purposes only and is not financial advice. Information may be delayed or inaccurate. We may earn a commission from partner links.