GAP (NYSE:GAP) and Ermenegildo Zegna (NYSE:ZGN) Financial Review

Ermenegildo Zegna (NYSE:ZGN) and GAP (NYSE:GAP) are both mid-cap retail/wholesale companies, but which is the better business? We will compare the two companies based on the strength of their analyst recommendations, risk, institutional ownership, valuation, dividends, earnings and profitability.

Analyst Recommendations

This is a summary of recent ratings and target prices for Ermenegildo Zegna and GAP, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Ermenegildo Zegna	0	3	5	0	2.63
GAP	0	6	10	2	2.78

Ermenegildo Zegna presently has a consensus target price of $12.51, suggesting a potential downside of 14.36%. GAP has a consensus target price of $28.71, suggesting a potential upside of 32.17%. Given GAP’s stronger consensus rating and higher possible upside, analysts clearly believe GAP is more favorable than Ermenegildo Zegna.

Insider and Institutional Ownership

12.9% of Ermenegildo Zegna shares are owned by institutional investors. Comparatively, 58.8% of GAP shares are owned by institutional investors. 1.2% of Ermenegildo Zegna shares are owned by company insiders. Comparatively, 31.0% of GAP shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.

Profitability

This table compares Ermenegildo Zegna and GAP’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
GAP	6.25%	21.13%	6.23%

Risk and Volatility

Ermenegildo Zegna has a beta of 0.87, suggesting that its stock price is 13% less volatile than the S&P 500. Comparatively, GAP has a beta of 2.03, suggesting that its stock price is 103% more volatile than the S&P 500.

Earnings & Valuation

This table compares Ermenegildo Zegna and GAP”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Ermenegildo Zegna	$2.17 billion	2.85	$111.54 million	N/A	N/A
GAP	$15.40 billion	0.51	$816.00 million	$2.54	8.55

GAP has higher revenue and earnings than Ermenegildo Zegna.

Summary

GAP beats Ermenegildo Zegna on 12 of the 13 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 GAP

Gap, Inc. operates as a global apparel retail company, which offers clothing, apparel, accessories, and personal care products for men, women, and children. The firm operates through the following segments: Gap Global, Old Navy Global, Banana Republic Global, Athleta, and Other. The Gap Global segment includes apparel and accessories for men and women under the Gap brand, along with the GapKids, BabyGap, GapMaternity, GapBody, and GapFit collections. The Old Navy Global segment offers clothing and accessories for adults and children. The Banana Republic Global segment provides clothing, eyewear, jewelry, shoes, handbags, and fragrances. The Athleta segment offers fitness apparel for women. The company founded by Donald G. Fisher and Doris F. Fisher in July 1969 and is headquartered in San Francisco, CA.