Contrasting Children’s Place (NASDAQ:PLCE) and Ermenegildo Zegna (NYSE:ZGN)

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

Analyst Recommendations

This is a breakdown of current recommendations and price targets for Children’s Place and Ermenegildo Zegna, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Children’s Place	1	1	0	0	1.50
Ermenegildo Zegna	0	4	5	0	2.56

Children’s Place currently has a consensus price target of $4.00, suggesting a potential upside of 16.28%. Ermenegildo Zegna has a consensus price target of $12.68, suggesting a potential downside of 8.74%. Given Children’s Place’s higher possible upside, equities analysts plainly believe Children’s Place is more favorable than Ermenegildo Zegna.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Children’s Place	-9.09%	N/A	-12.53%
Ermenegildo Zegna	N/A	N/A	N/A

Insider & Institutional Ownership

12.9% of Ermenegildo Zegna shares are owned by institutional investors. 0.9% of Children’s Place shares are owned by company insiders. Comparatively, 1.2% of Ermenegildo Zegna shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Valuation and Earnings

This table compares Children’s Place and Ermenegildo Zegna”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Children’s Place	$1.21 billion	0.06	-$88.26 million	($4.84)	-0.71
Ermenegildo Zegna	$2.17 billion	2.71	$111.54 million	N/A	N/A

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

Volatility & Risk

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

Summary

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

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.

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.