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EnerSys's (NYSE:ENS) Earnings Grew 34%, Did It Beat Long-Term Trend?

Simply Wall St

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Understanding how EnerSys (NYSE:ENS) is performing as a company requires looking at more than just a years' earnings. Today I will run you through a basic sense check to gain perspective on how EnerSys is doing by comparing its latest earnings with its long-term trend as well as the performance of its electrical industry peers.

Check out our latest analysis for EnerSys

How Well Did ENS Perform?

ENS's trailing twelve-month earnings (from 31 March 2019) of US$160m has jumped 34% compared to the previous year.

Furthermore, this one-year growth rate has exceeded its 5-year annual growth average of -3.6%, indicating the rate at which ENS is growing has accelerated. What's the driver of this growth? Let's see if it is solely owing to industry tailwinds, or if EnerSys has seen some company-specific growth.

NYSE:ENS Income Statement, June 22nd 2019

In terms of returns from investment, EnerSys has fallen short of achieving a 20% return on equity (ROE), recording 12% instead. Furthermore, its return on assets (ROA) of 6.1% is below the US Electrical industry of 7.8%, indicating EnerSys's are utilized less efficiently. And finally, its return on capital (ROC), which also accounts for EnerSys’s debt level, has declined over the past 3 years from 15% to 11%. This correlates with an increase in debt holding, with debt-to-equity ratio rising from 26% to 81% over the past 5 years.

What does this mean?

While past data is useful, it doesn’t tell the whole story. While EnerSys has a good historical track record with positive growth and profitability, there's no certainty that this will extrapolate into the future. I recommend you continue to research EnerSys to get a more holistic view of the stock by looking at:

  1. Future Outlook: What are well-informed industry analysts predicting for ENS’s future growth? Take a look at our free research report of analyst consensus for ENS’s outlook.
  2. Financial Health: Are ENS’s operations financially sustainable? Balance sheets can be hard to analyze, which is why we’ve done it for you. Check out our financial health checks here.
  3. Other High-Performing Stocks: Are there other stocks that provide better prospects with proven track records? Explore our free list of these great stocks here.

NB: Figures in this article are calculated using data from the trailing twelve months from 31 March 2019. This may not be consistent with full year annual report figures.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. 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. Simply Wall St has no position in the stocks mentioned. Thank you for reading.