With a daily gain of 6.69%, a 3-month loss of -1.2%, and an Earnings Per Share (EPS) of 0.62, Enerpac Tool Group Corp (EPAC, Financial) is a stock that has caught the attention of many investors. But the question remains: is the stock fairly valued? This article presents an in-depth analysis of Enerpac Tool Group's valuation, financial strength, profitability, and growth. Read on to discover whether it's the right time to invest in Enerpac Tool Group.
Company Introduction
Enerpac Tool Group Corp, formerly known as Actuant, is a leading provider of high-precision tools, controlled-force products, and solutions for precise heavy lifting. The company operates through two segments: industrial tools and services and other. It categorizes its revenue into two parts: product sales and services, which include manpower services and rentals. With the largest contribution to the company's total revenue coming from the United States, Enerpac Tool Group Corp also operates in Asia, Australia, Europe, and the Middle East.
Currently, Enerpac Tool Group's stock price is $27.73 per share, with a market cap of $1.60 billion. When compared to the GF Value of $25.72, the stock appears to be fairly valued. This comparison sets the stage for a more detailed exploration of the company's value.
Understanding the GF Value
The GF Value is an exclusive measure that represents the current intrinsic value of a stock. It calculates this value based on historical multiples, a GuruFocus adjustment factor based on the company's past returns and growth, and future estimates of the business performance. The GF Value Line gives an overview of the fair value at which the stock should ideally be traded.
For Enerpac Tool Group, the GF Value suggests that the stock is fairly valued. If the stock price is significantly above the GF Value Line, it is overvalued and its future return is likely to be poor. On the other hand, if it is significantly below the GF Value Line, its future return will likely be higher.
Given that Enerpac Tool Group is fairly valued, the long-term return of its stock is likely to be close to the rate of its business growth.
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Financial Strength
Investing in companies with low financial strength could result in permanent capital loss. Therefore, it's crucial to review a company's financial strength before deciding whether to buy shares. Enerpac Tool Group has a cash-to-debt ratio of 0.61, ranking worse than 63.52% of 2848 companies in the Industrial Products industry. Based on this, GuruFocus ranks Enerpac Tool Group's financial strength as 7 out of 10, suggesting a fair balance sheet.
Profitability and Growth
Profitable companies, especially those that have demonstrated consistent profitability over the long term, are less risky investments. Enerpac Tool Group has been profitable 6 times over the past 10 years. Over the past twelve months, the company had a revenue of $589.40 million and Earnings Per Share (EPS) of $0.62. Its operating margin is 12.79%, ranking better than 76.21% of 2896 companies in the Industrial Products industry. Overall, GuruFocus ranks the profitability of Enerpac Tool Group at 6 out of 10, indicating fair profitability.
One of the most important factors in the valuation of a company is growth. Companies that grow faster create more value for shareholders, especially if that growth is profitable. The average annual revenue growth of Enerpac Tool Group is -3.6%, ranking worse than 80.78% of 2737 companies in the Industrial Products industry. The 3-year average EBITDA growth is -9.7%, ranking worse than 80.02% of 2427 companies in the Industrial Products industry.
Another way to evaluate a company's profitability is by comparing its return on invested capital (ROIC) to its weighted average cost of capital (WACC). Return on invested capital (ROIC) measures how well a company generates cash flow relative to the capital it has invested in its business. The weighted average cost of capital (WACC) is the rate that a company is expected to pay on average to all its security holders to finance its assets. If the ROIC exceeds the WACC, the company is likely creating value for its shareholders. During the past 12 months, Enerpac Tool Group's ROIC was 10.4 while its WACC came in at 11.6.
Conclusion
In summary, the stock of Enerpac Tool Group is believed to be fairly valued. The company's financial condition is fair, and its profitability is fair. Its growth ranks worse than 80.02% of 2427 companies in the Industrial Products industry. To learn more about Enerpac Tool Group stock, you can check out its 30-Year Financials here.
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This article, generated by GuruFocus, is designed to provide general insights and is not tailored financial advice. Our commentary is rooted in historical data and analyst projections, utilizing an impartial methodology, and is not intended to serve as specific investment guidance. It does not formulate a recommendation to purchase or divest any stock and does not consider individual investment objectives or financial circumstances. Our objective is to deliver long-term, fundamental data-driven analysis. Be aware that our analysis might not incorporate the most recent, price-sensitive company announcements or qualitative information. GuruFocus holds no position in the stocks mentioned herein.
