Enerpac Tool Group (EPAC): Expanding Profit Margins Challenge Cautious Growth Narratives

Enerpac Tool Group (EPAC) posted a five-year annual earnings growth rate of 38.3%, while its net profit margin climbed to 15% from last year’s 13.9%. More recently, the company’s earnings growth over the past twelve months slowed to 12.8%, and forecasts point to further moderation, with annual earnings growth expected at 11.4% versus the broader US market’s 15.6%. With revenue growth forecasts slightly trailing industry averages, the spotlight remains on strong profit margins and a share price trading below the estimated fair value. This combination may create a compelling setup for investors even as the pace of growth normalizes.

See our full analysis for Enerpac Tool Group.

Next up, we will see how these results measure up to the narratives driving sentiment among analysts and investors. Some views may be confirmed while others will face a reality check.

See what the community is saying about Enerpac Tool Group

Margins Climb Despite Cost Pressures

• Net profit margin improved from 13.9% to 15% this year, demonstrating Enerpac’s ability to expand profitability even while some peers are seeing margin slippage.
• Analysts’ consensus view highlights that expansion of higher-margin service offerings and commercial execution are driving net margin gains.
• Service and innovation initiatives are shifting revenue toward more recurring, less cyclical streams, helping profitability.
• Ongoing process improvements reduce R&D and prototyping costs, directly supporting the margin trend displayed this year.

📈 Read the full Enerpac Tool Group Consensus Narrative.

Tariffs and Acquisition Integration Remain Watch Points

• A $12 million annualized tariff cost from exposure to imports and a softer-than-expected DTA acquisition both threaten future margin stability and targeted earnings growth.
• Analysts’ consensus view points out risks around ongoing industrial softness and structural headwinds.
• A 140 basis point decline in gross margin year-over-year shows profitability vulnerability if the higher-margin business mix is not maintained.
• Restructuring costs of $5.9 million and reliance on operational improvements at DTA illustrate the execution risks flagged by consensus.

Valuation Suggests Upside Against DCF and Analyst Targets

• Shares trade at $41.98, which is below both the DCF fair value of $48.01 and the $49.50 analyst price target, hinting at repricing potential if forecast improvements come through.
• Analysts’ consensus view agrees relative value is favorable compared to select peers.
• The price-to-earnings multiple of 24.4x sits under the peer average of 51x, providing additional support for the value proposition.
• Profit and revenue growth, though moderating, are currently sufficient to justify a higher fair value than the current market price.

Next Steps

To see how these results tie into long-term growth, risks, and valuation, check out the full range of community narratives for Enerpac Tool Group on Simply Wall St. Add the company to your watchlist or portfolio so you'll be alerted when the story evolves.

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A good starting point is our analysis highlighting 3 key rewards investors are optimistic about regarding Enerpac Tool Group.

See What Else Is Out There

Enerpac Tool Group’s moderating earnings growth, margin vulnerability from tariffs, and integration risks distinguish it from companies that deliver consistent results year after year.

If steadier performance is your priority, use our stable growth stocks screener (2084 results) to find companies that are recognized for reliable earnings and revenue across market cycles.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.