ERG SPA (ERG.MI) Stock Fundamental Analysis
BIT:ERG - Euronext Milan - IT0001157020 - Common Stock - Currency: EUR
Taking everything into account, ERG scores 6 out of 10 in our fundamental rating. ERG was compared to 22 industry peers in the Independent Power and Renewable Electricity Producers industry. While ERG has a great profitability rating, there are some minor concerns on its financial health. ERG is valued quite cheap, but it does not seem to be growing. Finally ERG also has an excellent dividend rating.
1. Profitability
1.1 Basic Checks
ERG had positive earnings in the past year.
In the past year ERG had a positive cash flow from operations.
Each year in the past 5 years ERG has been profitable.
In the past 5 years ERG always reported a positive cash flow from operatings.
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.
Looking at the Return On Equity, with a value of 13.51%, ERG is in the better half of the industry, outperforming 72.73% of the companies in the same industry.
Looking at the Return On Invested Capital, with a value of 5.95%, ERG belongs to the top of the industry, outperforming 81.82% of the companies in the same industry.
Measured over the past 3 years, the Average Return On Invested Capital for ERG is in line with the industry average of 5.31%.
The last Return On Invested Capital (5.95%) for ERG is above the 3 year average (4.72%), which is a sign of increasing profitability.
| 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 has a Profit Margin of 26.09%. This is in the better half of the industry: ERG outperforms 77.27% of its industry peers.
ERG's Profit Margin has improved in the last couple of years.
With an excellent Operating Margin value of 37.02%, ERG belongs to the best of the industry, outperforming 81.82% of the companies in the same industry.
ERG's Operating Margin has improved in the last couple of years.
The Gross Margin of ERG (98.48%) is better than 95.45% of its industry peers.
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.
The number of shares outstanding for ERG has been reduced compared to 5 years ago.
Compared to 1 year ago, ERG has a worse debt to assets ratio.
2.2 Solvency
Based on the Altman-Z score of 1.33, we must say that ERG is in the distress zone and has some risk of bankruptcy.
Looking at the Altman-Z score, with a value of 1.33, ERG is in the better half of the industry, outperforming 68.18% of the companies in the same industry.
ERG has a debt to FCF ratio of 12.33. This is a negative value and a sign of low solvency as ERG would need 12.33 years to pay back of all of its debts.
Looking at the Debt to FCF ratio, with a value of 12.33, ERG belongs to the top 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.
Looking at the Debt to Equity ratio, with a value of 1.18, ERG is doing worse than 63.64% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.18 | ||
| Debt/FCF | 12.33 | ||
| Altman-Z | 1.33 |
ROIC/WACC1.34
WACC4.44%
2.3 Liquidity
ERG has a Current Ratio of 1.35. 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 Current ratio of 1.35. This is comparable to the rest of the industry: ERG outperforms 54.55% of its industry peers.
A Quick Ratio of 1.33 indicates that ERG should not have too much problems paying its short term obligations.
With a Quick ratio value of 1.33, ERG perfoms like the industry average, outperforming 50.00% of the companies in the same industry.
| 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.
Looking at the last year, ERG shows a decrease in Revenue. The Revenue has decreased by -1.34% in the last year.
ERG shows a decrease in Revenue. Measured over the last years, the Revenue has been decreasing by -6.29% yearly.
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
The Earnings Per Share is expected to grow by 1.47% on average over the next years.
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.
When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.
4. Valuation
4.1 Price/Earnings Ratio
A Price/Earnings ratio of 10.45 indicates a reasonable valuation of ERG.
ERG's Price/Earnings ratio is rather cheap when compared to the industry. ERG is cheaper than 81.82% of the companies in the same industry.
When comparing the Price/Earnings ratio of ERG to the average of the S&P500 Index (27.50), we can say ERG is valued rather cheaply.
ERG is valuated correctly with a Price/Forward Earnings ratio of 12.51.
Compared to the rest of the industry, the Price/Forward Earnings ratio of ERG indicates a somewhat cheap valuation: ERG is cheaper than 68.18% of the companies listed in the same industry.
Compared to an average S&P500 Price/Forward Earnings ratio of 36.44, ERG is valued rather cheaply.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 10.45 | ||
| Fwd PE | 12.51 |
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.
81.82% of the companies in the same industry are more expensive than ERG, based on the Price/Free Cash Flow ratio.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 11.24 | ||
| EV/EBITDA | 6.02 |
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)3.46
PEG (5Y)0.24
EPS Next 2Y5.5%
EPS Next 3Y1.47%
5. Dividend
5.1 Amount
ERG has a Yearly Dividend Yield of 5.42%, which is a nice return.
ERG's Dividend Yield is rather good when compared to the industry average which is at 3.51. ERG pays more dividend than 95.45% of the companies in the same industry.
Compared to an average S&P500 Dividend Yield of 2.35, ERG pays a better dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 5.42% |
5.2 History
The dividend of ERG is nicely growing with an annual growth rate of 6.57%!
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 (7/18/2025, 7:00:00 PM)
18.71
+0.28 (+1.52%)
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 Cap2.81B
Analysts72
Price Target22.94 (22.61%)
Short Float %N/A
Short RatioN/A
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 5.42% |
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)-0.56%
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 | 10.45 | ||
| Fwd PE | 12.51 | ||
| P/S | 2.53 | ||
| P/FCF | 11.24 | ||
| P/OCF | 5.81 | ||
| P/B | 1.31 | ||
| P/tB | 4.96 | ||
| EV/EBITDA | 6.02 |
EPS(TTM)1.79
EY9.57%
EPS(NY)1.5
Fwd EY7.99%
FCF(TTM)1.66
FCFY8.9%
OCF(TTM)3.22
OCFY17.22%
SpS7.4
BVpS14.28
TBVpS3.77
PEG (NY)3.46
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
WACC4.44%
ROIC/WACC1.34
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%