Head-To-Head Comparison: GAP (NYSE:GAP) versus Ermenegildo Zegna (NYSE:ZGN)

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

Institutional & Insider Ownership

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

Volatility and Risk

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

Analyst Recommendations

This is a breakdown of current recommendations for GAP and Ermenegildo Zegna, as provided by MarketBeat.

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

GAP currently has a consensus price target of $28.71, suggesting a potential upside of 31.75%. Ermenegildo Zegna has a consensus price target of $12.51, suggesting a potential downside of 16.03%. Given GAP’s stronger consensus rating and higher probable upside, analysts plainly believe GAP is more favorable than Ermenegildo Zegna.

Earnings and Valuation

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
GAP	$15.37 billion	0.51	$816.00 million	$2.54	8.58
Ermenegildo Zegna	$2.17 billion	2.91	$111.54 million	N/A	N/A

GAP has higher revenue and earnings than Ermenegildo Zegna.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
GAP	6.25%	21.13%	6.23%
Ermenegildo Zegna	N/A	N/A	N/A

Summary

GAP beats Ermenegildo Zegna on 12 of the 13 factors compared between the two stocks.

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.

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.