Ermenegildo Zegna (NYSE:ZGN) versus Crocs (NASDAQ:CROX) Financial Analysis

Ermenegildo Zegna (NYSE:ZGN) and Crocs (NASDAQ:CROX) are both mid-cap consumer discretionary companies, but which is the better investment? We will compare the two businesses based on the strength of their dividends, profitability, valuation, analyst recommendations, earnings, risk and institutional ownership.

Volatility and Risk

Ermenegildo Zegna has a beta of 0.88, meaning that its stock price is 12% less volatile than the S&P 500. Comparatively, Crocs has a beta of 1.53, meaning that its stock price is 53% more volatile than the S&P 500.

Profitability

This table compares Ermenegildo Zegna and Crocs’ 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
Crocs	14.64%	47.75%	15.20%

Institutional and Insider Ownership

12.9% of Ermenegildo Zegna shares are held by institutional investors. Comparatively, 93.4% of Crocs shares are held by institutional investors. 1.2% of Ermenegildo Zegna shares are held by insiders. Comparatively, 3.1% of Crocs shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.

Earnings and Valuation

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Ermenegildo Zegna	$2.17 billion	2.68	$111.54 million	N/A	N/A
Crocs	$4.04 billion	1.45	-$81.20 million	$11.57	10.56

Ermenegildo Zegna has higher earnings, but lower revenue than Crocs.

Analyst Ratings

This is a summary of recent ratings for Ermenegildo Zegna and Crocs, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Ermenegildo Zegna	1	4	5	0	2.40
Crocs	2	7	10	1	2.50

Ermenegildo Zegna presently has a consensus price target of $13.13, suggesting a potential downside of 4.51%. Crocs has a consensus price target of $139.10, suggesting a potential upside of 13.80%. Given Crocs’ stronger consensus rating and higher probable upside, analysts clearly believe Crocs is more favorable than Ermenegildo Zegna.

Summary

Crocs beats Ermenegildo Zegna on 11 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 Crocs

Crocs, Inc., together with its subsidiaries, designs, develops, manufactures, markets, distributes, and sells casual lifestyle footwear and accessories for men, women, and children under Crocs and HEYDUDE Brand in the United States and internationally. The company offers various footwear products, including clogs, sandals, slides, flips, wedges, platforms, socks, boots, charms, flip flops, sneakers, and slippers. It sells its products through wholesalers, retail stores, e-commerce sites, third-party marketplaces, and kiosks/store-in-store locations. Crocs, Inc. was founded in 1999 and is headquartered in Broomfield, Colorado.