Financial Contrast: Ermenegildo Zegna (NYSE:ZGN) versus Urban Outfitters (NASDAQ:URBN)

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

Institutional and Insider Ownership

77.6% of Urban Outfitters shares are held by institutional investors. Comparatively, 12.9% of Ermenegildo Zegna shares are held by institutional investors. 32.1% of Urban Outfitters shares are held by insiders. Comparatively, 1.2% of Ermenegildo Zegna 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.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Urban Outfitters	7.48%	18.92%	10.45%
Ermenegildo Zegna	N/A	N/A	N/A

Risk & Volatility

Urban Outfitters has a beta of 1.23, suggesting that its share price is 23% more volatile than the S&P 500. Comparatively, Ermenegildo Zegna has a beta of 0.88, suggesting that its share price is 12% less volatile than the S&P 500.

Analyst Ratings

This is a breakdown of current ratings and recommmendations for Urban Outfitters and Ermenegildo Zegna, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Urban Outfitters	0	5	8	1	2.71
Ermenegildo Zegna	0	4	5	0	2.56

Urban Outfitters presently has a consensus price target of $87.91, suggesting a potential upside of 13.15%. Ermenegildo Zegna has a consensus price target of $13.23, suggesting a potential downside of 13.31%. Given Urban Outfitters’ stronger consensus rating and higher probable upside, equities analysts clearly believe Urban Outfitters is more favorable than Ermenegildo Zegna.

Earnings and Valuation

This table compares Urban Outfitters and Ermenegildo Zegna”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Urban Outfitters	$6.17 billion	1.08	$464.92 million	$5.21	14.91
Ermenegildo Zegna	$2.17 billion	2.98	$111.54 million	N/A	N/A

Urban Outfitters has higher revenue and earnings than Ermenegildo Zegna.

Summary

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

About Urban Outfitters

Urban Outfitters, Inc. engages in the retail and wholesale of general consumer products. The company operates through three segments: Retail, Wholesale, and Nuuly. It operates Urban Outfitters stores, which offer women's and men's fashion apparel, activewear, intimates, footwear, accessories, home goods, electronics, and beauty products for young adults aged 18 to 28; and Anthropologie stores that provide women's apparel, accessories, intimates, shoes, and home furnishings, as well as gifts, decorative items, and beauty and wellness products for women aged 28 to 45. The company also operates Terrain stores that provide lifestyle home products, garden and outdoor living products, antiques, live plants, flowers, wellness products, and accessories. In addition, it operates Free People retail stores, which offer casual women's apparel, intimates, activewear, shoes, accessories, home products, gifts, and beauty and wellness products for young women aged 25 to 30; and restaurants, as well as women's apparel subscription rental service under the Nuuly brand. Further, the company is involved in the wholesale of young women's contemporary casual apparel, intimates, activewear, and shoes under the Free People brand; and apparel collections under the Urban Outfitters brand. The company serves its customers directly through retail stores, websites, mobile applications, catalogs and customer contact centers, franchisee-owned stores, and department and specialty stores, as well as social media and third-party digital platforms. Urban Outfitters, Inc. was founded in 1970 and is based in Philadelphia, Pennsylvania.

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.