Ermenegildo Zegna N.V.

ZGN

Apparel - Manufacturers · Consumer Cyclical

Price

$13.90

-0.53 (-3.67%)

Market Cap

$3.73B

Winston Score

Winston is curious

Mixed quality — meaningful strengths and weaknesses.

Share count rising — dilution

+28.5% over 4y

The company has issued more shares over this period, which dilutes each existing shareholder’s stake.

Diluted shares outstanding: 203.5M (2021) → 261.5M (2025)

Ermenegildo Zegna is an Italian luxury fashion company that makes high-end men's clothing, suits, and accessories. It also owns the Thom Browne brand, which sells premium tailored clothing popular in the United States and Asia. Zegna is one of the oldest luxury menswear houses in the world, founded in 1910, and it controls its own fabric mills in northern Italy.

The company earns money by selling clothing and accessories directly to customers through its own stores, as well as through wholesale partners. It operates globally, with a strong presence in Europe, North America, and Greater China, which is a key growth market. Zegna's main competitive advantage is its vertical integration — it controls production from raw wool all the way to finished garments. The biggest risk the business faces is slowing luxury spending in China, where economic uncertainty has already pressured sales across the broader luxury goods industry.

Winston Score History

Growth Profile

For growth stock investors

When traditional metrics don't capture the full picture, these are the signals growth stock investors use instead.

Revenue Growth

-0.5% YoY

YoY Growth Rate

Revenue declining

EPS Growth

-4.8% YoY

YoY Growth Rate

Earnings declining

R&D Spend

$0/ year

0.0% of revenue

Below sector average (4%)

Research and development spending

Insider Activity

72.8%ownership

→ Flat

Insiders holding steady — not selling despite ability to

Cash Position

Cash flow positive

$220M cash & investments

Quarterly Free Cash Flow

↑ Burn rate improving

Company generates more cash than it spends — no dilution risk from fundraising

Revenue declining

Ermenegildo Zegna N.V.'s revenue is actually shrinking. In a growth stock, that removes the core investment thesis. The low Winston Score here may be warranted — unless there's a turnaround story.

The Winston Score above measures business quality today. Growth stocks often score lower because they invest in the future rather than maximising current profits. These metrics show what matters most for evaluating that future.

Score breakdown

Every number that matters to educated investors.

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Quality

Gross Margin

56.0%

Premium pricing power — 56.0% gross margin

Operating Margin

9.5%

Modest — 9.5% operating margin

ROCE

6.6%

Weak — 6.6% return on capital

ROIC between 5% and 15%. They earn 5 to 15 cents back per year on every dollar invested.

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Growth

Sales YoY

+13.5%

Fast-growing sales (13.5% YoY)

EPS YoY

-1.0%

Earnings shrinking (-1.0% YoY)

Slight earnings drop. Typical near a cyclical low.

EPS Consistency

4/8 quarters

Earnings inconsistent quarter-to-quarter

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Cash Flow

Cash Conversion

354%

Turns 354% of profit into real cash

FCF Margin

11.2%

Modest free cash flow (11.2%)

FCF margin between 10% and 20%. Every $100 in sales becomes $10 to $20 in real cash.

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Stability

Debt / Equity

0.38

Conservative — low debt load (0.38)

Interest Cover

5.24x

Adequate interest coverage (5.2x)

Interest coverage between 3 and 8. Profits cover interest several times over.

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Valuation

P/E Ratio (TTM)

20.4x

Growth-priced — P/E 20.4

P/E above the market average. People are paying up for expected growth.

P/E vs Forward

-4.0

SLOWING

Earnings expected to fall — forward P/E higher than today

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Dividends

Dividend Yield

1.07%

Small dividend — 1.07% yield

Modest yield. The bulk of any return needs to come from price appreciation.

Dividend Growth

N/A

no trend

Data not available

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