ERG SPA (ERG.MI) Stock Fundamental Analysis
Europe • Euronext Milan • BIT:ERG • IT0001157020
22.42 EUR
+0.12 (+0.54%)
Last: Jan 30, 2026, 07:00 PM
ERG gets a fundamental rating of 5 out of 10. The analysis compared the fundamentals against 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
- ERG had positive earnings in the past year.
- ERG had a positive operating cash flow in the past year.
- 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
- With a decent Return On Assets value of 3.69%, ERG is doing good in the industry, outperforming 72.73% of the companies in the same industry.
- ERG's Return On Equity of 10.40% is fine compared to the rest of the industry. ERG outperforms 72.73% of its industry peers.
- ERG has a better Return On Invested Capital (5.33%) than 77.27% of its industry peers.
- The Average Return On Invested Capital over the past 3 years for ERG is in line with the industry average of 5.29%.
- The last Return On Invested Capital (5.33%) for ERG is above the 3 year average (4.72%), which is a sign of increasing profitability.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 3.69% | ||
| ROE | 10.4% | ||
| ROIC | 5.33% |
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 (19.28%) is better than 86.36% of its industry peers.
- In the last couple of years the Profit Margin of ERG has grown nicely.
- ERG has a Operating Margin of 33.37%. This is amongst the best in the industry. ERG outperforms 90.91% of its industry peers.
- ERG's Operating Margin has improved in the last couple of years.
- The Gross Margin of ERG (98.63%) is better than 100.00% of its industry peers.
- ERG's Gross Margin has improved in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 33.37% | ||
| PM (TTM) | 19.28% | ||
| GM | 98.63% |
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
- ERG has a Return on Invested Capital (ROIC), which is just above the Cost of Capital (WACC), which means it is creating some value.
- The number of shares outstanding for ERG has been reduced compared to 1 year ago.
- Compared to 5 years ago, ERG has less shares outstanding
- Compared to 1 year ago, ERG has a worse debt to assets ratio.
2.2 Solvency
- ERG has an Altman-Z score of 1.51. This is a bad value and indicates that ERG is not financially healthy and even has some risk of bankruptcy.
- Looking at the Altman-Z score, with a value of 1.51, ERG is in the better half of the industry, outperforming 63.64% of the companies in the same industry.
- The Debt to FCF ratio of ERG is 9.46, which is on the high side as it means it would take ERG, 9.46 years of fcf income to pay off all of its debts.
- ERG has a better Debt to FCF ratio (9.46) than 77.27% of its industry peers.
- A Debt/Equity ratio of 1.30 is on the high side and indicates that ERG has dependencies on debt financing.
- ERG has a Debt to Equity ratio (1.30) which is comparable to the rest of the industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.3 | ||
| Debt/FCF | 9.46 | ||
| Altman-Z | 1.51 |
ROIC/WACC1.12
WACC4.75%
2.3 Liquidity
- ERG has a Current Ratio of 1.71. 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 (1.71) which is comparable to the rest of the industry.
- ERG has a Quick Ratio of 1.65. This is a normal value and indicates that ERG is financially healthy and should not expect problems in meeting its short term obligations.
- With a Quick ratio value of 1.65, ERG perfoms like the industry average, outperforming 54.55% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.71 | ||
| Quick Ratio | 1.65 |
3. Growth
3.1 Past
- ERG shows a strong negative growth in Earnings Per Share. In the last year the EPS decreased by -36.52%.
- 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 -3.11% in the last year.
- The Revenue has been decreasing by -6.29% on average over the past years.
EPS 1Y (TTM)-36.52%
EPS 3Y3.62%
EPS 5Y43.27%
EPS Q2Q%-39.18%
Revenue 1Y (TTM)-3.11%
Revenue growth 3Y7.06%
Revenue growth 5Y-6.29%
Sales Q2Q%-0.99%
3.2 Future
- Based on estimates for the next years, ERG will show a decrease in Earnings Per Share. The EPS will decrease by -1.76% on average per year.
- ERG is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 5.19% yearly.
EPS Next Y-9.19%
EPS Next 2Y3.83%
EPS Next 3Y2.4%
EPS Next 5Y-1.76%
Revenue Next Year6.13%
Revenue Next 2Y6.32%
Revenue Next 3Y4.91%
Revenue Next 5Y5.19%
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 15.57 indicates a correct valuation of ERG.
- Based on the Price/Earnings ratio, ERG is valued cheaply inside the industry as 81.82% of the companies are valued more expensively.
- The average S&P500 Price/Earnings ratio is at 28.32. ERG is valued slightly cheaper when compared to this.
- A Price/Forward Earnings ratio of 15.48 indicates a correct valuation of ERG.
- Based on the Price/Forward Earnings ratio, ERG is valued a bit cheaper than the industry average as 68.18% of the companies are valued more expensively.
- The average S&P500 Price/Forward Earnings ratio is at 25.57. ERG is valued slightly cheaper when compared to this.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 15.57 | ||
| Fwd PE | 15.48 |
4.2 Price Multiples
- Based on the Enterprise Value to EBITDA ratio, ERG is valued a bit cheaper than the industry average as 72.73% of the companies are valued more expensively.
- 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 | 11.89 | ||
| EV/EBITDA | 7.89 |
4.3 Compensation for Growth
- The excellent profitability rating of ERG may justify a higher PE ratio.
PEG (NY)N/A
PEG (5Y)0.36
EPS Next 2Y3.83%
EPS Next 3Y2.4%
5. Dividend
5.1 Amount
- ERG has a Yearly Dividend Yield of 4.48%, which is a nice return.
- Compared to an average industry Dividend Yield of 2.15, 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 1.83.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 4.48% |
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 72.21% of its income as dividend. This is not a sustainable payout ratio.
- The Dividend Rate of ERG has been growing, while earnings will be declining. This means the dividend growth is most likely not sustainable.
DP72.21%
EPS Next 2Y3.83%
EPS Next 3Y2.4%
ERG SPA / ERG.MI FAQ
What is the ChartMill fundamental rating of ERG SPA (ERG.MI) stock?
ChartMill assigns a fundamental rating of 5 / 10 to ERG.MI.
Can you provide the valuation status for ERG SPA?
ChartMill assigns a valuation rating of 6 / 10 to ERG SPA (ERG.MI). This can be considered as Fairly Valued.
What is the profitability of ERG stock?
ERG SPA (ERG.MI) has a profitability rating of 8 / 10.
What is the financial health of ERG SPA (ERG.MI) stock?
The financial health rating of ERG SPA (ERG.MI) is 4 / 10.
How sustainable is the dividend of ERG SPA (ERG.MI) stock?
The dividend rating of ERG SPA (ERG.MI) is 7 / 10 and the dividend payout ratio is 72.21%.