Energizer Holdings (ENR) has drawn investor attention after recent share price moves, with the stock last closing at $22.64. The company has a market value of about $1.53 billion.

Recent trading has been strong for Energizer Holdings, with a 1 month share price return of 21.52% and a 90 day share price return of 33.10%. The 1 year total shareholder return of 18.68% contrasts with declines over the 3 and 5 year periods, suggesting improving short term momentum after a weaker longer term experience for shareholders.

If this kind of rebound has caught your attention, it could be a good moment to widen your search and check out 20 top founder-led companies

With Energizer Holdings shares rebounding and trading above the average analyst price target, the key question is whether the stock is still undervalued based on its fundamentals or if the market is already pricing in future growth.

Price to earnings of 7.9x: Is it justified?

On the numbers provided, Energizer Holdings trades on a P/E of 7.9x, which is materially below several valuation reference points even after the recent share price rebound to $22.64.

The P/E ratio compares the current share price to earnings per share and is a quick way to see how much investors are paying for each dollar of earnings. For a consumer products company like Energizer Holdings, this is a commonly watched measure because earnings are a central driver of long term value.

According to the data, Energizer Holdings is assessed as good value on this metric in several ways. Its current P/E of 7.9x sits well below an estimated fair P/E of 13.3x, below the peer average of 25.5x, and below the global household products industry average of 17.8x. These gaps show that the market is currently placing a much lower earnings multiple on the stock than those reference levels.

Result: Price-to-earnings of 7.9x (UNDERVALUED)

However, Energizer Holdings still faces risks, including its reliance on mature battery markets and its exposure to consumer spending patterns across its global retail channels.

Another view on Energizer Holdings' value

While the P/E of 7.9x suggests Energizer Holdings looks inexpensive, the SWS DCF model paints an even starker picture. With the stock at $22.64 and an estimated future cash flow value of $94.14, the model implies the shares trade at a steep discount. Could the cash flow assumptions be too optimistic, or is the market overlooking something?

Simply Wall St performs a discounted cash flow (DCF) on every stock in the world every day (check out Energizer Holdings for example). We show the entire calculation in full. You can track the result in your watchlist or portfolio and be alerted when this changes, or use our stock screener to discover 44 high quality undervalued stocks. If you save a screener we even alert you when new companies match - so you never miss a potential opportunity.

Next Steps

With mixed signals around Energizer Holdings, this is a good time to review the underlying data, weigh both concerns and positives carefully, and then examine the 5 key rewards and 2 important warning signs

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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.