ERG SPA (ERG.MI) Stock Fundamental Analysis
BIT:ERG - Euronext Milan - IT0001157020 - Common Stock - Currency: EUR
We assign a fundamental rating of 6 out of 10 to ERG. ERG was compared to 22 industry peers in the Independent Power and Renewable Electricity Producers industry. While ERG belongs to the best of the industry regarding profitability, there are some minor concerns on its financial health. ERG is valued correctly, but it does not seem to be growing. ERG also has an excellent dividend rating.
1. Profitability
1.1 Basic Checks
In the past year ERG was profitable.
ERG had a positive operating cash flow in the past year.
In the past 5 years ERG has always been profitable.
ERG had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
ERG has a Return On Assets of 4.59%. This is amongst the best in the industry. ERG outperforms 81.82% of its industry peers.
ERG has a better Return On Equity (13.51%) than 77.27% of its industry peers.
With an excellent Return On Invested Capital value of 5.95%, ERG belongs to the best of the industry, outperforming 81.82% of the companies in the same industry.
ERG had an Average Return On Invested Capital over the past 3 years of 4.72%. This is in line with the industry average of 5.28%.
The 3 year average ROIC (4.72%) for ERG is below the current ROIC(5.95%), indicating increased profibility in the last year.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 4.59% | ||
| ROE | 13.51% | ||
| ROIC | 5.95% |
ROA(3y)4.55%
ROA(5y)3.78%
ROE(3y)11.87%
ROE(5y)10.57%
ROIC(3y)4.72%
ROIC(5y)3.97%
1.3 Margins
ERG's Profit Margin of 26.09% is amongst the best of the industry. ERG outperforms 81.82% of its industry peers.
In the last couple of years the Profit Margin of ERG has grown nicely.
With an excellent Operating Margin value of 37.02%, ERG belongs to the best of the industry, outperforming 86.36% of the companies in the same industry.
ERG's Operating Margin has improved in the last couple of years.
Looking at the Gross Margin, with a value of 98.48%, ERG belongs to the top of the industry, outperforming 95.45% of the companies in the same industry.
ERG's Gross Margin has improved in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 37.02% | ||
| PM (TTM) | 26.09% | ||
| GM | 98.48% |
OM growth 3Y4.11%
OM growth 5Y13.88%
PM growth 3Y-4.11%
PM growth 5Y52.35%
GM growth 3Y-0.12%
GM growth 5Y6.64%
2. Health
2.1 Basic Checks
The Return on Invested Capital (ROIC) is just above the Cost of Capital (WACC), so ERG is still creating some value.
ERG has less shares outstanding than it did 1 year ago.
ERG has less shares outstanding than it did 5 years ago.
Compared to 1 year ago, ERG has a worse debt to assets ratio.
2.2 Solvency
ERG has an Altman-Z score of 1.33. This is a bad value and indicates that ERG is not financially healthy and even has some risk of bankruptcy.
With a decent Altman-Z score value of 1.33, ERG is doing good in the industry, outperforming 68.18% of the companies in the same industry.
The Debt to FCF ratio of ERG is 12.33, which is on the high side as it means it would take ERG, 12.33 years of fcf income to pay off all of its debts.
With an excellent Debt to FCF ratio value of 12.33, ERG belongs to the best of the industry, outperforming 81.82% of the companies in the same industry.
ERG has a Debt/Equity ratio of 1.18. This is a high value indicating a heavy dependency on external financing.
ERG has a worse Debt to Equity ratio (1.18) than 63.64% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.18 | ||
| Debt/FCF | 12.33 | ||
| Altman-Z | 1.33 |
ROIC/WACC1.35
WACC4.42%
2.3 Liquidity
A Current Ratio of 1.35 indicates that ERG should not have too much problems paying its short term obligations.
ERG has a Current ratio (1.35) which is in line with its industry peers.
ERG has a Quick Ratio of 1.33. This is a normal value and indicates that ERG is financially healthy and should not expect problems in meeting its short term obligations.
ERG has a Quick ratio of 1.33. This is comparable to the rest of the industry: ERG outperforms 50.00% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.35 | ||
| Quick Ratio | 1.33 |
3. Growth
3.1 Past
ERG shows a slight negative growth in Earnings Per Share. In the last year, the EPS has decreased by -6.71%.
ERG shows a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 43.27% yearly.
The Revenue has decreased by -1.34% in the past year.
Measured over the past years, ERG shows a decrease in Revenue. The Revenue has been decreasing by -6.29% on average per year.
EPS 1Y (TTM)-6.71%
EPS 3Y3.62%
EPS 5Y43.27%
EPS Q2Q%-35.48%
Revenue 1Y (TTM)-1.34%
Revenue growth 3Y7.06%
Revenue growth 5Y-6.29%
Sales Q2Q%-7.8%
3.2 Future
Based on estimates for the next years, ERG will show a small growth in Earnings Per Share. The EPS will grow by 1.47% on average per year.
Based on estimates for the next years, ERG will show a small growth in Revenue. The Revenue will grow by 5.58% on average per year.
EPS Next Y3.03%
EPS Next 2Y5.5%
EPS Next 3Y1.47%
EPS Next 5YN/A
Revenue Next Year9.51%
Revenue Next 2Y6.9%
Revenue Next 3Y5.58%
Revenue Next 5YN/A
3.3 Evolution
When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is decreasing.
The Revenue growth rate is accelerating: in the next years the growth will be better than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
With a Price/Earnings ratio of 10.30, the valuation of ERG can be described as very reasonable.
Based on the Price/Earnings ratio, ERG is valued cheaper than 81.82% of the companies in the same industry.
Compared to an average S&P500 Price/Earnings ratio of 27.29, ERG is valued rather cheaply.
The Price/Forward Earnings ratio is 12.33, which indicates a correct valuation of ERG.
Based on the Price/Forward Earnings ratio, ERG is valued a bit cheaper than 72.73% of the companies in the same industry.
ERG is valuated rather cheaply when we compare the Price/Forward Earnings ratio to 21.74, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 10.3 | ||
| Fwd PE | 12.33 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, ERG is valued a bit cheaper than 77.27% of the companies in the same industry.
Based on the Price/Free Cash Flow ratio, ERG is valued cheaply inside the industry as 81.82% of the companies are valued more expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 11.08 | ||
| EV/EBITDA | 6.05 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates ERG does not grow enough to justify the current Price/Earnings ratio.
The excellent profitability rating of ERG may justify a higher PE ratio.
PEG (NY)3.41
PEG (5Y)0.24
EPS Next 2Y5.5%
EPS Next 3Y1.47%
5. Dividend
5.1 Amount
ERG has a Yearly Dividend Yield of 5.20%, which is a nice return.
ERG's Dividend Yield is rather good when compared to the industry average which is at 3.54. ERG pays more dividend than 95.45% of the companies in the same industry.
ERG's Dividend Yield is rather good when compared to the S&P500 average which is at 2.37.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 5.2% |
5.2 History
On average, the dividend of ERG grows each year by 6.57%, which is quite nice.
Dividend Growth(5Y)6.57%
Div Incr Years0
Div Non Decr Years0
5.3 Sustainability
52.43% of the earnings are spent on dividend by ERG. This is a bit on the high side, but may be sustainable.
The dividend of ERG is growing, but the earnings are growing slower. This means the dividend growth is not sustainable.
DP52.43%
EPS Next 2Y5.5%
EPS Next 3Y1.47%
BIT:ERG (7/8/2025, 10:01:28 AM)
18.44
-0.11 (-0.59%)
Chartmill FA Rating
GICS SectorUtilities
GICS IndustryGroupUtilities
GICS IndustryIndependent Power and Renewable Electricity Producers
Earnings (Last)
Earnings (Next)
Inst Owners17.51%
Inst Owner ChangeN/A
Ins OwnersN/A
Ins Owner ChangeN/A
Market Cap2.77B
Analysts72
Price Target22.94 (24.4%)
Short Float %N/A
Short RatioN/A
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 5.2% |
Yearly Dividend1.04
Dividend Growth(5Y)6.57%
DP52.43%
Div Incr Years0
Div Non Decr Years0
Ex-DateN/A
Surprises & Revisions
EPS beat(2)N/A
Avg EPS beat(2)N/A
Min EPS beat(2)N/A
Max EPS beat(2)N/A
EPS beat(4)N/A
Avg EPS beat(4)N/A
Min EPS beat(4)N/A
Max EPS beat(4)N/A
EPS beat(8)N/A
Avg EPS beat(8)N/A
EPS beat(12)N/A
Avg EPS beat(12)N/A
EPS beat(16)N/A
Avg EPS beat(16)N/A
Revenue beat(2)N/A
Avg Revenue beat(2)N/A
Min Revenue beat(2)N/A
Max Revenue beat(2)N/A
Revenue beat(4)N/A
Avg Revenue beat(4)N/A
Min Revenue beat(4)N/A
Max Revenue beat(4)N/A
Revenue beat(8)N/A
Avg Revenue beat(8)N/A
Revenue beat(12)N/A
Avg Revenue beat(12)N/A
Revenue beat(16)N/A
Avg Revenue beat(16)N/A
PT rev (1m)-0.66%
PT rev (3m)-6.48%
EPS NQ rev (1m)N/A
EPS NQ rev (3m)N/A
EPS NY rev (1m)0%
EPS NY rev (3m)-3.69%
Revenue NQ rev (1m)N/A
Revenue NQ rev (3m)N/A
Revenue NY rev (1m)0%
Revenue NY rev (3m)-3.16%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 10.3 | ||
| Fwd PE | 12.33 | ||
| P/S | 2.49 | ||
| P/FCF | 11.08 | ||
| P/OCF | 5.73 | ||
| P/B | 1.29 | ||
| P/tB | 4.89 | ||
| EV/EBITDA | 6.05 |
EPS(TTM)1.79
EY9.71%
EPS(NY)1.5
Fwd EY8.11%
FCF(TTM)1.66
FCFY9.03%
OCF(TTM)3.22
OCFY17.47%
SpS7.4
BVpS14.28
TBVpS3.77
PEG (NY)3.41
PEG (5Y)0.24
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 4.59% | ||
| ROE | 13.51% | ||
| ROCE | 7.72% | ||
| ROIC | 5.95% | ||
| ROICexc | 7.36% | ||
| ROICexgc | 11.41% | ||
| OM | 37.02% | ||
| PM (TTM) | 26.09% | ||
| GM | 98.48% | ||
| FCFM | 22.5% |
ROA(3y)4.55%
ROA(5y)3.78%
ROE(3y)11.87%
ROE(5y)10.57%
ROIC(3y)4.72%
ROIC(5y)3.97%
ROICexc(3y)5.64%
ROICexc(5y)4.82%
ROICexgc(3y)8.71%
ROICexgc(5y)7.19%
ROCE(3y)6.04%
ROCE(5y)5.28%
ROICexcg growth 3Y13.65%
ROICexcg growth 5Y3.76%
ROICexc growth 3Y7.92%
ROICexc growth 5Y2.32%
OM growth 3Y4.11%
OM growth 5Y13.88%
PM growth 3Y-4.11%
PM growth 5Y52.35%
GM growth 3Y-0.12%
GM growth 5Y6.64%
F-Score6
Asset Turnover0.18
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.18 | ||
| Debt/FCF | 12.33 | ||
| Debt/EBITDA | 3.68 | ||
| Cap/Depr | 84.19% | ||
| Cap/Sales | 21.04% | ||
| Interest Coverage | 25.9 | ||
| Cash Conversion | 70.22% | ||
| Profit Quality | 86.26% | ||
| Current Ratio | 1.35 | ||
| Quick Ratio | 1.33 | ||
| Altman-Z | 1.33 |
F-Score6
WACC4.42%
ROIC/WACC1.35
Cap/Depr(3y)113.43%
Cap/Depr(5y)97.89%
Cap/Sales(3y)39.21%
Cap/Sales(5y)34.75%
Profit Quality(3y)163.12%
Profit Quality(5y)N/A
High Growth Momentum
Growth
EPS 1Y (TTM)-6.71%
EPS 3Y3.62%
EPS 5Y43.27%
EPS Q2Q%-35.48%
EPS Next Y3.03%
EPS Next 2Y5.5%
EPS Next 3Y1.47%
EPS Next 5YN/A
Revenue 1Y (TTM)-1.34%
Revenue growth 3Y7.06%
Revenue growth 5Y-6.29%
Sales Q2Q%-7.8%
Revenue Next Year9.51%
Revenue Next 2Y6.9%
Revenue Next 3Y5.58%
Revenue Next 5YN/A
EBIT growth 1Y-10.15%
EBIT growth 3Y11.47%
EBIT growth 5Y6.71%
EBIT Next Year99.87%
EBIT Next 3Y29.08%
EBIT Next 5YN/A
FCF growth 1Y-56.61%
FCF growth 3YN/A
FCF growth 5Y-11.63%
OCF growth 1Y-45.14%
OCF growth 3Y39.84%
OCF growth 5Y-2.18%