ERG SPA (ERG.MI) Stock Fundamental Analysis
BIT:ERG - Euronext Milan - IT0001157020 - Common Stock - Currency: EUR
ERG gets a fundamental rating of 6 out of 10. The analysis compared the fundamentals against 22 industry peers in the Independent Power and Renewable Electricity Producers industry. While ERG has a great profitability rating, there are quite some concerns on its financial health. ERG is valued quite cheap, while showing a decent growth score. This is a good combination!
1. Profitability
1.1 Basic Checks
In the past year ERG was profitable.
In the past year ERG had a positive cash flow from operations.
ERG had positive earnings in each of the past 5 years.
In the past 5 years ERG always reported a positive cash flow from operatings.
1.2 Ratios
With an excellent Return On Assets value of 5.90%, ERG belongs to the best of the industry, outperforming 95.45% of the companies in the same industry.
ERG's Return On Equity of 16.14% is amongst the best of the industry. ERG outperforms 95.45% of its industry peers.
ERG has a better Return On Invested Capital (5.01%) than 86.36% of its industry peers.
Measured over the past 3 years, the Average Return On Invested Capital for ERG is below the industry average of 6.06%.
The last Return On Invested Capital (5.01%) for ERG is above the 3 year average (3.27%), which is a sign of increasing profitability.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 5.9% | ||
| ROE | 16.14% | ||
| ROIC | 5.01% |
ROA(3y)4.52%
ROA(5y)3.33%
ROE(3y)12.66%
ROE(5y)9.18%
ROIC(3y)3.27%
ROIC(5y)2.94%
1.3 Margins
With an excellent Profit Margin value of 30.13%, ERG belongs to the best of the industry, outperforming 90.91% of the companies in the same industry.
In the last couple of years the Profit Margin of ERG has grown nicely.
ERG's Operating Margin of 39.72% is fine compared to the rest of the industry. ERG outperforms 77.27% of its industry peers.
In the last couple of years the Operating Margin of ERG has grown nicely.
Looking at the Gross Margin, with a value of 98.13%, 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 | 39.72% | ||
| PM (TTM) | 30.13% | ||
| GM | 98.13% |
OM growth 3Y31.88%
OM growth 5Y15.39%
PM growth 3Y24.15%
PM growth 5Y13.23%
GM growth 3Y13.5%
GM growth 5Y7.59%
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
ERG has a worse debt/assets ratio than last year.
2.2 Solvency
Based on the Altman-Z score of 1.36, we must say that ERG is in the distress zone and has some risk of bankruptcy.
ERG has a better Altman-Z score (1.36) than 81.82% of its industry peers.
The Debt to FCF ratio of ERG is 8.28, which is on the high side as it means it would take ERG, 8.28 years of fcf income to pay off all of its debts.
ERG has a Debt to FCF ratio of 8.28. This is amongst the best in the industry. ERG outperforms 81.82% of its industry peers.
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 perfoms like the industry average, outperforming 40.91% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.18 | ||
| Debt/FCF | 8.28 | ||
| Altman-Z | 1.36 |
ROIC/WACC1.1
WACC4.56%
2.3 Liquidity
ERG has a Current Ratio of 0.79. This is a bad value and indicates that ERG is not financially healthy enough and could expect problems in meeting its short term obligations.
The Current ratio of ERG (0.79) is worse than 68.18% of its industry peers.
A Quick Ratio of 0.77 indicates that ERG may have some problems paying its short term obligations.
With a Quick ratio value of 0.77, ERG is not doing good in the industry: 68.18% of the companies in the same industry are doing better.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.79 | ||
| Quick Ratio | 0.77 |
3. Growth
3.1 Past
The Earnings Per Share has grown by an impressive 83.29% over the past year.
Measured over the past 5 years, ERG shows a small growth in Earnings Per Share. The EPS has been growing by 5.98% on average per year.
Looking at the last year, ERG shows a small growth in Revenue. The Revenue has grown by 5.40% in the last year.
The Revenue has been decreasing by -6.26% on average over the past years.
EPS 1Y (TTM)83.29%
EPS 3Y18.23%
EPS 5Y5.98%
EPS Q2Q%-17.26%
Revenue 1Y (TTM)5.4%
Revenue growth 3Y-4.7%
Revenue growth 5Y-6.26%
Sales Q2Q%3.31%
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 4.93% on average per year.
Based on estimates for the next years, ERG will show a small growth in Revenue. The Revenue will grow by 3.81% on average per year.
EPS Next Y4.4%
EPS Next 2Y7.75%
EPS Next 3Y5.3%
EPS Next 5Y4.93%
Revenue Next Year4.25%
Revenue Next 2Y8.42%
Revenue Next 3Y6.93%
Revenue Next 5Y3.81%
3.3 Evolution
The EPS growth rate is stable: in the next years the growth will be about the same 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
The Price/Earnings ratio is 7.86, which indicates a rather cheap valuation of ERG.
ERG's Price/Earnings ratio is rather cheap when compared to the industry. ERG is cheaper than 95.45% of the companies in the same industry.
Compared to an average S&P500 Price/Earnings ratio of 29.35, ERG is valued rather cheaply.
A Price/Forward Earnings ratio of 11.65 indicates a reasonable valuation of ERG.
Based on the Price/Forward Earnings ratio, ERG is valued cheaper than 90.91% of the companies in the same industry.
The average S&P500 Price/Forward Earnings ratio is at 22.10. ERG is valued slightly cheaper when compared to this.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 7.86 | ||
| Fwd PE | 11.65 |
4.2 Price Multiples
Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of ERG indicates a rather cheap valuation: ERG is cheaper than 81.82% of the companies listed in the same industry.
Compared to the rest of the industry, the Price/Free Cash Flow ratio of ERG indicates a rather cheap valuation: ERG is cheaper than 90.91% of the companies listed in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 8.69 | ||
| EV/EBITDA | 5.87 |
4.3 Compensation for Growth
The PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a correct valuation of the company.
ERG has an outstanding profitability rating, which may justify a higher PE ratio.
PEG (NY)1.79
PEG (5Y)1.31
EPS Next 2Y7.75%
EPS Next 3Y5.3%
5. Dividend
5.1 Amount
ERG has a Yearly Dividend Yield of 5.78%, which is a nice return.
Compared to an average industry Dividend Yield of 4.02, ERG pays a better dividend. On top of this ERG pays more dividend than 90.91% of the companies listed in the same industry.
ERG's Dividend Yield is rather good when compared to the S&P500 average which is at 2.33.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 5.78% |
5.2 History
The dividend of ERG decreases each year by -2.02%.
Dividend Growth(5Y)-2.02%
Div Incr Years0
Div Non Decr Years0
5.3 Sustainability
ERG pays out 43.99% of its income as dividend. This is a bit on the high side, but may be sustainable.
DP43.99%
EPS Next 2Y7.75%
EPS Next 3Y5.3%
BIT:ERG (3/7/2025, 7:00:00 PM)
17.61
+0.31 (+1.79%)
Chartmill FA Rating
GICS SectorUtilities
GICS IndustryGroupUtilities
GICS IndustryIndependent Power and Renewable Electricity Producers
Earnings (Last)
Earnings (Next)
Inst Owners18.22%
Inst Owner ChangeN/A
Ins OwnersN/A
Ins Owner ChangeN/A
Market Cap2.65B
Analysts72
Price Target27.99 (58.94%)
Short Float %N/A
Short RatioN/A
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 5.78% |
Yearly Dividend1.04
Dividend Growth(5Y)-2.02%
DP43.99%
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)-0.98%
EPS NQ rev (1m)N/A
EPS NQ rev (3m)N/A
EPS NY rev (1m)-0.96%
EPS NY rev (3m)-7.62%
Revenue NQ rev (1m)N/A
Revenue NQ rev (3m)N/A
Revenue NY rev (1m)-0.31%
Revenue NY rev (3m)-1.63%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 7.86 | ||
| Fwd PE | 11.65 | ||
| P/S | 2.35 | ||
| P/FCF | 8.69 | ||
| P/OCF | 4.38 | ||
| P/B | 1.26 | ||
| P/tB | 5.17 | ||
| EV/EBITDA | 5.87 |
EPS(TTM)2.24
EY12.72%
EPS(NY)1.51
Fwd EY8.58%
FCF(TTM)2.03
FCFY11.5%
OCF(TTM)4.02
OCFY22.83%
SpS7.49
BVpS13.99
TBVpS3.41
PEG (NY)1.79
PEG (5Y)1.31
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 5.9% | ||
| ROE | 16.14% | ||
| ROCE | 9.26% | ||
| ROIC | 5.01% | ||
| ROICexc | 5.4% | ||
| ROICexgc | 7.88% | ||
| OM | 39.72% | ||
| PM (TTM) | 30.13% | ||
| GM | 98.13% | ||
| FCFM | 27.03% |
ROA(3y)4.52%
ROA(5y)3.33%
ROE(3y)12.66%
ROE(5y)9.18%
ROIC(3y)3.27%
ROIC(5y)2.94%
ROICexc(3y)3.95%
ROICexc(5y)3.54%
ROICexgc(3y)5.78%
ROICexgc(5y)5.15%
ROCE(3y)5.93%
ROCE(5y)5.18%
ROICexcg growth 3Y21.77%
ROICexcg growth 5Y5.5%
ROICexc growth 3Y19.29%
ROICexc growth 5Y3.67%
OM growth 3Y31.88%
OM growth 5Y15.39%
PM growth 3Y24.15%
PM growth 5Y13.23%
GM growth 3Y13.5%
GM growth 5Y7.59%
F-Score6
Asset Turnover0.2
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.18 | ||
| Debt/FCF | 8.28 | ||
| Debt/EBITDA | 3.61 | ||
| Cap/Depr | 124.82% | ||
| Cap/Sales | 26.62% | ||
| Interest Coverage | 34.33 | ||
| Cash Conversion | 87.89% | ||
| Profit Quality | 89.73% | ||
| Current Ratio | 0.79 | ||
| Quick Ratio | 0.77 | ||
| Altman-Z | 1.36 |
F-Score6
WACC4.56%
ROIC/WACC1.1
Cap/Depr(3y)123.11%
Cap/Depr(5y)86.03%
Cap/Sales(3y)42.98%
Cap/Sales(5y)29.91%
Profit Quality(3y)N/A
Profit Quality(5y)N/A
High Growth Momentum
Growth
EPS 1Y (TTM)83.29%
EPS 3Y18.23%
EPS 5Y5.98%
EPS Q2Q%-17.26%
EPS Next Y4.4%
EPS Next 2Y7.75%
EPS Next 3Y5.3%
EPS Next 5Y4.93%
Revenue 1Y (TTM)5.4%
Revenue growth 3Y-4.7%
Revenue growth 5Y-6.26%
Sales Q2Q%3.31%
Revenue Next Year4.25%
Revenue Next 2Y8.42%
Revenue Next 3Y6.93%
Revenue Next 5Y3.81%
EBIT growth 1Y4.88%
EBIT growth 3Y25.68%
EBIT growth 5Y8.16%
EBIT Next Year93.39%
EBIT Next 3Y30.57%
EBIT Next 5Y19.15%
FCF growth 1Y240.13%
FCF growth 3Y24.6%
FCF growth 5Y20.51%
OCF growth 1Y74.51%
OCF growth 3Y29.04%
OCF growth 5Y25.17%