Head-To-Head Survey: Ermenegildo Zegna (NYSE:ZGN) and Children’s Place (NASDAQ:PLCE)

Ermenegildo Zegna (NYSE:ZGN) and Children’s Place (NASDAQ:PLCE) are both retail/wholesale companies, but which is the superior investment? We will compare the two companies based on the strength of their risk, analyst recommendations, valuation, profitability, dividends, institutional ownership and earnings.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Ermenegildo Zegna	N/A	N/A	N/A
Children’s Place	-7.30%	N/A	-10.79%

Institutional and Insider Ownership

12.9% of Ermenegildo Zegna shares are held by institutional investors. 1.2% of Ermenegildo Zegna shares are held by insiders. Comparatively, 0.9% of Children’s Place shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Volatility and Risk

Ermenegildo Zegna has a beta of 0.87, indicating that its share price is 13% less volatile than the S&P 500. Comparatively, Children’s Place has a beta of 1.9, indicating that its share price is 90% more volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of recent recommendations for Ermenegildo Zegna and Children’s Place, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Ermenegildo Zegna	0	3	5	0	2.63
Children’s Place	1	1	0	0	1.50

Ermenegildo Zegna currently has a consensus price target of $12.51, indicating a potential downside of 14.96%. Children’s Place has a consensus price target of $4.00, indicating a potential upside of 14.94%. Given Children’s Place’s higher probable upside, analysts plainly believe Children’s Place is more favorable than Ermenegildo Zegna.

Earnings & Valuation

This table compares Ermenegildo Zegna and Children’s Place”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Ermenegildo Zegna	$2.17 billion	2.87	$111.54 million	N/A	N/A
Children’s Place	$1.21 billion	0.06	-$88.26 million	($4.01)	-0.87

Ermenegildo Zegna has higher revenue and earnings than Children’s Place.

Summary

Ermenegildo Zegna beats Children’s Place on 9 of the 11 factors compared between the two stocks.

About Ermenegildo Zegna

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. operates as a subsidiary of Monterubello Societa’ Semplice.

About Children’s Place

The Children’s Place, Inc. engages in the provision of apparel, footwear, accessories, and other items for children. The firm also designs contracts to manufacture and sell fashionable and value-priced merchandise under the brand names of The Children’s Place, Baby Place, and Gymboree. It operates through The Children’s Place U.S. and The Children’s Place International segments. The Children’s Place U.S. segment refers to the company’s U.S. and Puerto Rico-based stores and revenue from its U.S. based wholesale business. The Children’s Place International segment is involved in the Canadian-based stores, revenue from the company’s Canadian-based wholesale business, as well as revenue from international franchisees. The company was founded by David Pulver and Clinton A. Clark in 1969 and is headquartered in Secaucus, NJ.