Ermenegildo Zegna (NYSE:ZGN) vs. Lululemon Athletica (NASDAQ:LULU) Critical Contrast

Ermenegildo Zegna (NYSE:ZGNGet Rating) and Lululemon Athletica (NASDAQ:LULUGet Rating) are both retail/wholesale companies, but which is the superior stock? We will compare the two companies based on the strength of their valuation, profitability, dividends, analyst recommendations, institutional ownership, earnings and risk.

Valuation & Earnings

This table compares Ermenegildo Zegna and Lululemon Athletica’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Ermenegildo Zegna $1.53 billion 0.35 -$160.90 million N/A N/A
Lululemon Athletica $6.26 billion 5.60 $975.32 million $7.50 36.54

Lululemon Athletica has higher revenue and earnings than Ermenegildo Zegna.

Analyst Ratings

This is a summary of current ratings for Ermenegildo Zegna and Lululemon Athletica, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Ermenegildo Zegna 0 2 1 0 2.33
Lululemon Athletica 1 4 20 0 2.76

Ermenegildo Zegna presently has a consensus price target of $11.87, indicating a potential upside of 13.12%. Lululemon Athletica has a consensus price target of $442.76, indicating a potential upside of 61.57%. Given Lululemon Athletica’s stronger consensus rating and higher probable upside, analysts plainly believe Lululemon Athletica is more favorable than Ermenegildo Zegna.

Risk and Volatility

Ermenegildo Zegna has a beta of 0.48, meaning that its share price is 52% less volatile than the S&P 500. Comparatively, Lululemon Athletica has a beta of 1.29, meaning that its share price is 29% more volatile than the S&P 500.

Profitability

This table compares Ermenegildo Zegna and Lululemon Athletica’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Ermenegildo Zegna N/A -82.29% -14.51%
Lululemon Athletica 15.59% 37.92% 22.25%

Insider & Institutional Ownership

24.8% of Ermenegildo Zegna shares are held by institutional investors. Comparatively, 85.5% of Lululemon Athletica shares are held by institutional investors. 1.2% of Ermenegildo Zegna shares are held by insiders. Comparatively, 0.3% of Lululemon Athletica shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Summary

Lululemon Athletica beats Ermenegildo Zegna on 11 of the 12 factors compared between the two stocks.

Ermenegildo Zegna Company Profile (Get Rating)

Ermenegildo Zegna N.V., together with its subsidiaries, designs, manufactures, markets, and distributes luxury menswear, footwear, leather goods, and other accessories under the Zegna and the Thom Browne brands. It provides luxury leisurewear for men; formal suits, tuxedos, shirts, blazers, formal overcoats, and accessories; leather accessories comprising shoes, bags, belts, and small leather accessories; and fragrances. The company also offers luxury womenswear and childrenswear under the Thom Browne brand, as well as provides eyewear, cufflinks and jewelry, watches, underwear, and beachwear manufactured by third parties under licenses. It serves customers through its retail stores and online channels in Europe, the Middle East, Africa, North America, Latin America, the Asia Pacific, and internationally. The company was founded in 1910 and is based in Trivero, Italy. Ermenegildo Zegna N.V. is a subsidiary of Monterubello Societa' Semplice.

Lululemon Athletica Company Profile (Get Rating)

lululemon athletica inc., together with its subsidiaries, designs, distributes, and retails athletic apparel and accessories for women and men. It operates in two segments, Company-Operated Stores and Direct to Consumer. The company offers pants, shorts, tops, and jackets for healthy lifestyle and athletic activities, such as yoga, running, and training, as well as other sweaty pursuits. It also provides fitness-related accessories and footwear. The company sells its products through a chain of company-operated stores; outlets and warehouse sales; interactive workout platform; a network of wholesale accounts, such as yoga studios, health clubs, and fitness centers; temporary locations; and license and supply arrangements, as well as directly to consumer through mobile apps and lululemon.com e-commerce website. As of January 30, 2022, it operated 574 company-operated stores under the lululemon brand in the United States, Canada, the People's Republic of China, Australia, the United Kingdom, Japan, New Zealand, Germany, South Korea, Singapore, France, Malaysia, Sweden, Ireland, the Netherlands, Norway, and Switzerland. lululemon athletica inc. was founded in 1998 and is based in Vancouver, Canada.

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