Stock Analysis
EnerSys (NYSE:ENS), is not the largest company out there, but it saw a double-digit share price rise of over 10% in the past couple of months on the NYSE. With many analysts covering the mid-cap stock, we may expect any price-sensitive announcements have already been factored into the stock’s share price. But what if there is still an opportunity to buy? Today I will analyse the most recent data on EnerSys’s outlook and valuation to see if the opportunity still exists.
See our latest analysis for EnerSys
What's the opportunity in EnerSys?
According to my valuation model, EnerSys seems to be fairly priced at around 12.43% above my intrinsic value, which means if you buy EnerSys today, you’d be paying a relatively fair price for it. And if you believe the company’s true value is $84.65, then there isn’t really any room for the share price grow beyond what it’s currently trading. Is there another opportunity to buy low in the future? Since EnerSys’s share price is quite volatile, we could potentially see it sink lower (or rise higher) in the future, giving us another chance to buy. This is based on its high beta, which is a good indicator for how much the stock moves relative to the rest of the market.
What does the future of EnerSys look like?
Investors looking for growth in their portfolio may want to consider the prospects of a company before buying its shares. Buying a great company with a robust outlook at a cheap price is always a good investment, so let’s also take a look at the company's future expectations. EnerSys' earnings over the next few years are expected to increase by 94%, indicating a highly optimistic future ahead. This should lead to more robust cash flows, feeding into a higher share value.
What this means for you:
Are you a shareholder? ENS’s optimistic future growth appears to have been factored into the current share price, with shares trading around its fair value. However, there are also other important factors which we haven’t considered today, such as the financial strength of the company. Have these factors changed since the last time you looked at the stock? Will you have enough conviction to buy should the price fluctuates below the true value?
Are you a potential investor? If you’ve been keeping tabs on ENS, now may not be the most advantageous time to buy, given it is trading around its fair value. However, the optimistic prospect is encouraging for the company, which means it’s worth diving deeper into other factors such as the strength of its balance sheet, in order to take advantage of the next price drop.
If you want to dive deeper into EnerSys, you'd also look into what risks it is currently facing. For example - EnerSys has 1 warning sign we think you should be aware of.
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What are the risks and opportunities for EnerSys?
EnerSys provides various stored energy solutions for industrial applications worldwide.
Rewards
Trading at 60.1% below our estimate of its fair value
Earnings are forecast to grow 37.67% per year
Risks
Debt is not well covered by operating cash flow
Further research on
EnerSys
This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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About NYSE:ENS
EnerSys
EnerSys provides various stored energy solutions for industrial applications worldwide.
Good value with moderate growth potential.
