EnerSys (ENS) | Investment Case

1. Company Snapshot

1.a. Company Description

EnerSys provides various stored energy solutions for industrial applications worldwide.It operates in three segments: Energy Systems, Motive Power, and Specialty.The company offers uninterruptible power systems applications for computer and computer-controlled systems, as well as telecommunications systems; switchgear and electrical control systems used in industrial facilities and electric utilities, large-scale energy storage, and energy pipelines; integrated power solutions and services to broadband, telecom, renewable, and industrial customers; and thermally managed cabinets and enclosures for electronic equipment and batteries.

It also provides motive power products that are used to provide power for electric industrial forklifts used in manufacturing, warehousing, and other material handling applications.In addition, the company offers mining equipment, diesel locomotive starting, and other rail equipment.Further, it provides specialty batteries for starting, lighting, and ignition applications in transportation; and energy solutions for satellites, military aircraft, submarines, ships, and other tactical vehicles, as well as medical and security systems.

Additionally, the company offers battery chargers, power equipment, battery accessories, and outdoor cabinet enclosures, as well as related after-market and customer-support services for industrial batteries.The company sells its products through a network of distributors, independent representatives, and internal sales forces.The company was formerly known as Yuasa, Inc.

and changed its name to EnerSys in January 2001.EnerSys was incorporated in 2000 and is headquartered in Reading, Pennsylvania.

Show Full description

1.b. Last Insights on ENS

EnerSys' recent performance was driven by strong Q3 earnings, with the company beating estimates with $2.77 per share, exceeding the Zacks Consensus Estimate of $2.73 per share. Disciplined cost reductions and a clean balance sheet contributed to resilient results, despite weak volumes in Motive Power and Transportation. The company's exposure to secular growth in data centers, aerospace & defense, and advanced batteries positions it for future upside. Additionally, EnerSys' robust free cash flow supports share repurchases and dividends. A recent rating upgrade to Buy by Zacks reflects growing optimism about its earnings prospects.

1.c. Company Highlights

Last Price	173.21
Change Percentage	-2.06%
Open	175.93
Previous Close	176.85
Market Cap ( Millions)	6393
Volume	609982
Year High	194.77
Year Low	76.57
M A 50	163.93
M A 200	120.21

FCF Yield	6.90%
Dividend Yield	0.58%
ROE	16.61%
Debt / Equity	62.34%
Net Debt / EBIDTA	138.57%
Price To Book	3.38
Price Earnings Ratio	20.41
Price To FCF	14.49
Price To sales	1.71
EV / EBITDA	13.54

2. EnerSys' Q3 Fiscal '26 Earnings: Strong Performance and Optimistic Outlook

EnerSys reported strong financial performance in Q3 Fiscal '26, with adjusted diluted EPS of $2.77, beating analyst estimates of $2.73. Net sales were up 1% year-over-year, driven by strong price/mix and favorable FX, despite lower volumes. The company's adjusted operating earnings were up 34% and adjusted EBITDA was up 30%, reflecting its energized strategic framework and cost improvement efforts. The actual EPS figure of $2.77 indicates a significant increase in profitability.

Publication Date: Feb -09

                                    📋 Highlights
                                    Adjusted Diluted EPS Surge:
                                                EnerSys achieved $1.84 adjusted diluted EPS in Q3, a 50% year-over-year increase, driven by strong operational performance.
Energy Systems Margin Breakthrough:
                                                The segment delivered its first double-digit adjusted operating earnings (AOE) margin, with sales growth and favorable price/mix contributing to improved profitability.
Robust Free Cash Flow:
                                                Generated $171 million in free cash flow (190% conversion) and returned $94 million to shareholders via buybacks and dividends, maintaining a leverage ratio of 1.2x EBITDA.
Data Center Momentum:
                                                Data center sales surged 28% YoY, with EnerSys holding over 50% US market share and anticipating high teens growth in 2026 due to AI infrastructure demand.
Q4 Guidance Optimistic:
                                                Expects $2.95–$3.05 adjusted diluted EPS for Q4 (excluding 45X benefits), reflecting a 10% YoY growth at the midpoint, supported by improved supply chain efficiency and demand resilience.

                                

Segment Performance

The Energy Systems segment delivered its first double-digit AOE margin, driven by sales growth and favorable price/mix. The data center business was a key contributor, with sales up 28% year-over-year. Motive Power margins remained in line with the prior year, despite lower sales, while Specialty delivered remarkable performance improvement, with sales up high single digits and AOE more than twice that of the prior year.

Cash Flow and Balance Sheet

Free cash flow was strong at $171 million, with a free cash flow conversion of 190%. The company returned $94 million to shareholders through share repurchases and dividends. The balance sheet remains strong, with a leverage ratio of 1.2x EBITDA and $450 million in cash and cash equivalents.

Outlook and Guidance

For the fourth quarter, the company expects net sales of $960 million to $1 billion, with adjusted diluted EPS of $2.95 to $3.05 per share. Excluding 45X benefits, adjusted diluted EPS is expected to be $1.91 to $2.01 per share, up 10% year-on-year at the midpoint. The company remains optimistic about its growth prospects, driven by durable secular demand trends and its diversified business model.

Valuation

With a P/E Ratio of 20.3 and an EV/EBITDA of 13.27, EnerSys' valuation appears reasonable, considering its strong financial performance and growth prospects. The company's ROIC of 11.44% and ROE of 16.61% also indicate a strong return on investment. Analysts estimate next year's revenue growth at 2.8%, which is relatively modest, but the company's diversified business model and cost improvement efforts are expected to drive earnings growth.

3. NewsRoom

Enersys $ENS Stock Holdings Cut by Rhumbline Advisers

Feb -19

Source: defenseworld.net

Enersys $ENS Position Reduced by Envestnet Asset Management Inc.

Feb -14

Source: defenseworld.net

All You Need to Know About EnerSys (ENS) Rating Upgrade to Buy

Feb -09

Source: zacks.com

EnerSys: Showing Margin Power But Waiting For Volume Growth

Feb -06

Source: seekingalpha.com

EnerSys (ENS) Q3 2026 Earnings Call Transcript

Feb -05

Source: seekingalpha.com

EnerSys' Q3 Earnings Beat Estimates, Decrease Year Over Year

Feb -05

Source:

EnerSys (ENS) Q3 Earnings: Taking a Look at Key Metrics Versus Estimates

Feb -05

Source: zacks.com

EnerSys (ENS) Tops Q3 Earnings Estimates

Feb -05

Source: zacks.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (1.85%)

6. Segments

Energy Systems

Expected Growth: 2.0%

EnerSys' Energy Systems segment growth is driven by increasing demand for renewable energy storage, electrification of transportation, and grid modernization. Additionally, the rising need for backup power systems and data center infrastructure, as well as the company's strategic acquisitions and investments in new technologies, contribute to its 2.0% growth.

Motive Power

Expected Growth: 1.8%

Motive Power's 1.8% growth is driven by increasing demand for energy-efficient solutions, rising adoption of lithium-ion batteries, and growing need for reliable backup power systems. Additionally, EnerSys' strategic acquisitions and expansion into emerging markets have contributed to the segment's growth.

Specialty

Expected Growth: 1.5%

EnerSys' Specialty segment growth is driven by increasing demand for high-performance batteries in motive power applications, such as electric forklifts and automated guided vehicles, as well as growing adoption of renewable energy systems and backup power solutions. Additionally, the company's strategic acquisitions and investments in technology advancements have expanded its product offerings and improved operational efficiency.

7. Detailed Products

Reserve Power

EnerSys provides reserve power solutions for telecommunications, data centers, and other critical infrastructure applications.

Motive Power

EnerSys offers motive power solutions for electric forklifts, pallet jacks, and other material handling equipment.

Aerospace and Defense

EnerSys provides specialized battery solutions for aerospace and defense applications, including military and commercial aircraft, and defense systems.

Energy Storage

EnerSys offers energy storage solutions for renewable energy systems, grid scale energy storage, and other applications.

Specialty Batteries

EnerSys provides specialty batteries for medical devices, security systems, and other niche applications.

8. EnerSys's Porter Forces

Forces Ranking

Threat Of Substitutes

EnerSys faces moderate threat from substitutes, as customers have limited alternatives for specialized battery solutions.

Bargaining Power Of Customers

EnerSys has a diverse customer base, reducing the bargaining power of individual customers.

Bargaining Power Of Suppliers

EnerSys relies on a few key suppliers for critical components, giving them moderate bargaining power.

Threat Of New Entrants

High barriers to entry, including significant capital investments and regulatory hurdles, limit the threat of new entrants.

Intensity Of Rivalry

The battery market is highly competitive, with several established players competing for market share.

9. SWOT Analysis

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

	Value
Debt Weight	32.70%
Debt Cost	5.93%
Equity Weight	67.30%
Equity Cost	10.73%
WACC	9.16%
Leverage	48.58%

11. Quality Control: EnerSys passed 8 out of 9 key points

Strong Liquidity

Low Debt

Strong Interest Coverage

Healthy Cash Flow

Operating Efficiency

Strong Return On Equity

Consistent Revenue Growth

Consistent Operating Cash Flow Growth

Margin Improvement

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

EnerSys

A-Score: 5.8/10

Value: 4.9

Growth: 6.3

Quality: 5.8

Yield: 2.0

Momentum: 9.0

Volatility: 7.0

1-Year Total Return ->

Acuity Brands

A-Score: 5.2/10

Value: 2.9

Growth: 6.8

Quality: 7.1

Yield: 0.0

Momentum: 7.0

Volatility: 7.7

1-Year Total Return ->

Hubbell

A-Score: 5.1/10

Value: 2.3

Growth: 6.7

Quality: 7.0

Yield: 2.0

Momentum: 5.0

Volatility: 7.7

1-Year Total Return ->

Hayward Holdings

A-Score: 4.4/10

Value: 4.2

Growth: 3.1

Quality: 7.5

Yield: 0.0

Momentum: 5.0

Volatility: 6.3

1-Year Total Return ->

Advanced Energy Industries

A-Score: 4.3/10

Value: 0.6

Growth: 5.0

Quality: 6.5

Yield: 0.0

Momentum: 9.5

Volatility: 4.3

1-Year Total Return ->

Atkore

A-Score: 3.9/10

Value: 6.9

Growth: 4.3

Quality: 3.4

Yield: 2.0

Momentum: 3.0

Volatility: 4.0

1-Year Total Return ->

Peers Metrics

12.e Scoring ^Insights

12.f DCF ^BETA

Parameters

Short Term Growth

8.50%

Short term Time

10.0

Long-Term Growth

2.00%

WACC

9.16%

EnerSys - US29275Y1029

1. Company Snapshot

1.a. Company Description

1.b. Last Insights on ENS

1.c. Company Highlights

Stable Momentum

Average Quality

Average Growth

Earnings Beats

Revenues Beats

Medium Volatility

Revenues Miss

Better Quality

Fairly Valued

2. EnerSys' Q3 Fiscal '26 Earnings: Strong Performance and Optimistic Outlook

Segment Performance

Cash Flow and Balance Sheet

Outlook and Guidance

Valuation

3. NewsRoom

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (1.85%)

6. Segments

Energy Systems

Expected Growth: 2.0%

Motive Power

Expected Growth: 1.8%

Specialty

Expected Growth: 1.5%

7. Detailed Products

Reserve Power

Motive Power

Aerospace and Defense

Energy Storage

Specialty Batteries

8. EnerSys's Porter Forces

Forces Ranking

Threat Of Substitutes

Bargaining Power Of Customers

Bargaining Power Of Suppliers

Threat Of New Entrants

Intensity Of Rivalry

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

11. Quality Control: EnerSys passed 8 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

173.21$

Current Price

173.21$

Potential

-0.00%

Expected Cash-Flows

12.e Scoring ^Insights

12.f DCF ^BETA