Stock Analysis

Why EnerSys (NYSE:ENS) Could Be Worth Watching

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NYSE:ENS
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While EnerSys (NYSE:ENS) might not be the most widely known stock at the moment, it received a lot of attention from a substantial price movement on the NYSE over the last few months, increasing to US$85.49 at one point, and dropping to the lows of US$72.84. Some share price movements can give investors a better opportunity to enter into the stock, and potentially buy at a lower price. A question to answer is whether EnerSys' current trading price of US$78.19 reflective of the actual value of the mid-cap? Or is it currently undervalued, providing us with the opportunity to buy? Let’s take a look at EnerSys’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change.

Check out our latest analysis for EnerSys

Is EnerSys still cheap?

According to my valuation model, EnerSys seems to be fairly priced at around 18.75% above my intrinsic value, which means if you buy EnerSys today, you’d be paying a relatively reasonable price for it. And if you believe that the stock is really worth $65.85, then there isn’t really any room for the share price grow beyond what it’s currently trading. So, is there another chance to buy low in the future? Given that EnerSys’s share is fairly volatile (i.e. its price movements are magnified relative to the rest of the market) this could mean the price can sink lower, giving us an opportunity to buy later on. This is based on its high beta, which is a good indicator for share price volatility.

What does the future of EnerSys look like?

earnings-and-revenue-growth
NYSE:ENS Earnings and Revenue Growth December 28th 2021

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. In the upcoming year, EnerSys' earnings are expected to increase by 31%, 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? It seems like the market has already priced in ENS’s positive outlook, 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 confidence to invest in the company should the price drop below its fair 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 positive outlook is encouraging for the company, which means it’s worth further examining other factors such as the strength of its balance sheet, in order to take advantage of the next price drop.

If you'd like to know more about EnerSys as a business, it's important to be aware of any risks it's facing. When we did our research, we found 2 warning signs for EnerSys (1 is potentially serious!) that we believe deserve your full attention.

If you are no longer interested in EnerSys, you can use our free platform to see our list of over 50 other stocks with a high growth potential.

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Find out whether EnerSys is potentially over or undervalued by checking out our comprehensive analysis, which includes fair value estimates, risks and warnings, dividends, insider transactions and financial health.

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