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Enersys (ENS) Suffers From Soft End Markets Amid Pandemic
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On Jun 3, we issued an updated research report on Enersys (ENS - Free Report) .
Year to date, this Zacks Rank #4 (Sell) stock has lost 10% compared with the industry’s decline of 14.8%.
Existing Business Scenario
The coronavirus outbreak has been impacting Enersys’ operational performance. For instance, in the fourth quarter of fiscal 2020 (ended March 2020), the company’s net sales declined 1.9% (3% on an organic basis) year over year, owing to softness in its end markets in China and supply-chain disruptions. The difficult end-market conditions in motive power, transportation and telecommunications systems in the wake of the pandemic will likely continue to affect its performance in the first half of fiscal 2021 (ending September 2020). On uncertainties, regarding the impacts of the outbreak on financial and operating results, the company has not provided any guidance for fiscal 2021 (ending March 2021).
Also, the company has been experiencing escalating costs and expenses over some time. Notably, in the last five fiscal years (2016-2020), the company’s cost of goods sold increased 4.3% (CAGR). Also, its operating expenses grew 8.1% (CAGR) over the same time frame. At the end of the fiscal fourth quarter, its cost of goods sold and operating expenses totaled $582.9 million and $133.8 million, respectively.
Moreover, high debt level remains concerning for the company. Notably, in the last five fiscal years (2016-2020), its long-term debt net of unamortized debt issuance costs) rose 17.5% (CAGR). Also, its long-term debt (net of unamortized debt issuance costs) of $1,104.7 million at the end of the fourth quarter of fiscal 2020 represented an increase of 13.7% from the fiscal 2019 end. We find the company more leveraged than the industry. Its long-term debt-to-capital ratio is 45.9%, higher than the industry’s 31.2%.
However, the company’s solid backlog level at the transportation business, growing popularity of the ODYSSEY brand, and solid demand for NexSys TPPL products and cloud computing services might aid. Going forward, its solid product portfolio and new product offerings might be beneficial.
Intellicheck delivered a positive earnings surprise of 70.24%, on average, in the trailing four quarters.
Alcoa delivered a positive earnings surprise of 12.78%, on average, in the trailing four quarters.
Broadwind delivered a positive earnings surprise of 50.00%, on average, in the trailing four quarters.
These Stocks Are Poised to Soar Past the Pandemic
The COVID-19 outbreak has shifted consumer behavior dramatically, and a handful of high-tech companies have stepped up to keep America running. Right now, investors in these companies have a shot at serious profits. For example, Zoom jumped 108.5% in less than 4 months while most other stocks were sinking.
Our research shows that 5 cutting-edge stocks could skyrocket from the exponential increase in demand for “stay at home” technologies. This could be one of the biggest buying opportunities of this decade, especially for those who get in early.
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Enersys (ENS) Suffers From Soft End Markets Amid Pandemic
On Jun 3, we issued an updated research report on Enersys (ENS - Free Report) .
Year to date, this Zacks Rank #4 (Sell) stock has lost 10% compared with the industry’s decline of 14.8%.
Existing Business Scenario
The coronavirus outbreak has been impacting Enersys’ operational performance. For instance, in the fourth quarter of fiscal 2020 (ended March 2020), the company’s net sales declined 1.9% (3% on an organic basis) year over year, owing to softness in its end markets in China and supply-chain disruptions. The difficult end-market conditions in motive power, transportation and telecommunications systems in the wake of the pandemic will likely continue to affect its performance in the first half of fiscal 2021 (ending September 2020). On uncertainties, regarding the impacts of the outbreak on financial and operating results, the company has not provided any guidance for fiscal 2021 (ending March 2021).
Also, the company has been experiencing escalating costs and expenses over some time. Notably, in the last five fiscal years (2016-2020), the company’s cost of goods sold increased 4.3% (CAGR). Also, its operating expenses grew 8.1% (CAGR) over the same time frame. At the end of the fiscal fourth quarter, its cost of goods sold and operating expenses totaled $582.9 million and $133.8 million, respectively.
Moreover, high debt level remains concerning for the company. Notably, in the last five fiscal years (2016-2020), its long-term debt net of unamortized debt issuance costs) rose 17.5% (CAGR). Also, its long-term debt (net of unamortized debt issuance costs) of $1,104.7 million at the end of the fourth quarter of fiscal 2020 represented an increase of 13.7% from the fiscal 2019 end. We find the company more leveraged than the industry. Its long-term debt-to-capital ratio is 45.9%, higher than the industry’s 31.2%.
However, the company’s solid backlog level at the transportation business, growing popularity of the ODYSSEY brand, and solid demand for NexSys TPPL products and cloud computing services might aid. Going forward, its solid product portfolio and new product offerings might be beneficial.
Stocks to Consider
Some better-ranked stocks from the Zacks Industrial Products sector are Intellicheck, Inc. (IDN - Free Report) , Alcoa Corporation (AA - Free Report) and Broadwind Energy Inc. (BWEN - Free Report) . All the companies currently carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Intellicheck delivered a positive earnings surprise of 70.24%, on average, in the trailing four quarters.
Alcoa delivered a positive earnings surprise of 12.78%, on average, in the trailing four quarters.
Broadwind delivered a positive earnings surprise of 50.00%, on average, in the trailing four quarters.
These Stocks Are Poised to Soar Past the Pandemic
The COVID-19 outbreak has shifted consumer behavior dramatically, and a handful of high-tech companies have stepped up to keep America running. Right now, investors in these companies have a shot at serious profits. For example, Zoom jumped 108.5% in less than 4 months while most other stocks were sinking.
Our research shows that 5 cutting-edge stocks could skyrocket from the exponential increase in demand for “stay at home” technologies. This could be one of the biggest buying opportunities of this decade, especially for those who get in early.
See the 5 high-tech stocks now>>