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. ERG scores excellent on profitability, but there are some minor concerns on its financial health. ERG has a valuation in line with the averages, 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.
Each year in the past 5 years ERG had a positive operating cash flow.
1.2 Ratios
With an excellent Return On Assets value of 4.59%, ERG belongs to the best of the industry, outperforming 80.95% of the companies in the same industry.
ERG has a better Return On Equity (13.51%) than 76.19% of its industry peers.
The Return On Invested Capital of ERG (5.95%) is better than 80.95% of its industry peers.
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
The Profit Margin of ERG (26.09%) is better than 80.95% of its industry peers.
ERG's Profit Margin has improved in the last couple of years.
The Operating Margin of ERG (37.02%) is better than 85.71% of its industry peers.
ERG's Operating Margin has improved in the last couple of years.
ERG has a better Gross Margin (98.48%) than 95.24% of its industry peers.
In the last couple of years the Gross Margin of ERG has grown nicely.
| 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
With a Return on Invested Capital (ROIC) just above the Cost of Capital (WACC), ERG is creating some value.
Compared to 1 year ago, ERG has less shares outstanding
Compared to 5 years ago, ERG has less shares outstanding
The debt/assets ratio for ERG is higher compared to a year ago.
2.2 Solvency
ERG has an Altman-Z score of 1.34. This is a bad value and indicates that ERG is not financially healthy and even has some risk of bankruptcy.
ERG's Altman-Z score of 1.34 is fine compared to the rest of the industry. ERG outperforms 61.90% of its industry peers.
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.
With a decent Debt to FCF ratio value of 12.33, ERG is doing good in the industry, outperforming 76.19% 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.
With a Debt to Equity ratio value of 1.18, ERG is not doing good in the industry: 66.67% of the companies in the same industry are doing better.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.18 | ||
| Debt/FCF | 12.33 | ||
| Altman-Z | 1.34 |
ROIC/WACC1.33
WACC4.47%
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.
A Quick Ratio of 1.33 indicates that ERG should not have too much problems paying its short term obligations.
ERG has a Quick ratio (1.33) which is comparable to the rest of the 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%.
Measured over the past years, ERG shows a very strong growth in Earnings Per Share. The EPS has been growing by 43.27% on average per year.
ERG shows a decrease in Revenue. In the last year, the revenue decreased by -1.34%.
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.
ERG is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 5.58% yearly.
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
The EPS growth rate is decreasing: in the next years the growth will be less than in the last years.
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
ERG is valuated reasonably with a Price/Earnings ratio of 10.60.
ERG's Price/Earnings ratio is rather cheap when compared to the industry. ERG is cheaper than 80.95% of the companies in the same industry.
Compared to an average S&P500 Price/Earnings ratio of 27.45, ERG is valued rather cheaply.
The Price/Forward Earnings ratio is 12.69, which indicates a correct valuation of ERG.
Based on the Price/Forward Earnings ratio, ERG is valued a bit cheaper than the industry average as 71.43% of the companies are valued more expensively.
Compared to an average S&P500 Price/Forward Earnings ratio of 21.89, ERG is valued a bit cheaper.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 10.6 | ||
| Fwd PE | 12.69 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, ERG is valued a bit cheaper than the industry average as 76.19% of the companies are valued more expensively.
Compared to the rest of the industry, the Price/Free Cash Flow ratio of ERG indicates a somewhat cheap valuation: ERG is cheaper than 76.19% of the companies listed in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 11.4 | ||
| EV/EBITDA | 6.14 |
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)3.51
PEG (5Y)0.25
EPS Next 2Y5.5%
EPS Next 3Y1.47%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 5.20%, ERG is a good candidate for dividend investing.
ERG's Dividend Yield is rather good when compared to the industry average which is at 3.54. ERG pays more dividend than 95.24% 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
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
ERG pays out 52.43% of its income as dividend. 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 (7/4/2025, 7:00:00 PM)
18.98
-0.25 (-1.3%)
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 Cap2.85B
Analysts72
Price Target22.94 (20.86%)
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 | 10.6 | ||
| Fwd PE | 12.69 | ||
| P/S | 2.57 | ||
| P/FCF | 11.4 | ||
| P/OCF | 5.89 | ||
| P/B | 1.33 | ||
| P/tB | 5.03 | ||
| EV/EBITDA | 6.14 |
EPS(TTM)1.79
EY9.43%
EPS(NY)1.5
Fwd EY7.88%
FCF(TTM)1.66
FCFY8.77%
OCF(TTM)3.22
OCFY16.97%
SpS7.4
BVpS14.28
TBVpS3.77
PEG (NY)3.51
PEG (5Y)0.25
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 | 1.34 |
F-Score6
WACC4.47%
ROIC/WACC1.33
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%