Enerpac Tool Group (EPAC) is in focus ahead of its Q3 2026 earnings release on July 7 before the market opens, with Wall Street watching revenue of about $165 million and earnings of $0.50 per share.

At a share price of $34.87, Enerpac Tool Group has seen its 30 day share price return rise 4.25%, but the year to date share price return is down 11.86%. However, the 3 year total shareholder return of 33.09% points to a stronger longer term picture than the recent pullback.

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With Enerpac Tool Group trading below both its analyst price target and some intrinsic value estimates, the key question now is whether the downside is already reflected in the share price or whether the market is already pricing in future growth.

Price-to-Earnings of 21x: Is it justified?

On a P/E of 21x at a share price of $34.87, Enerpac Tool Group screens as cheaper than both its Machinery industry and peer averages, which points to the market pricing the stock below many close comparables.

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 profit. For a company like Enerpac Tool Group, with established operations and forecast earnings growth rather than early stage losses, P/E is a commonly watched yardstick for how the market is treating its profit outlook.

Enerpac Tool Group’s 21x P/E sits below the US Machinery industry average of 27.9x and well below the peer average of 50.3x, which is a strong gap. Relative to an estimated fair P/E of 22.3x, the current ratio is also slightly lower, suggesting the market is pricing the stock at a level that could move closer to that fair multiple if conditions and expectations align.

Result: Price-to-Earnings of 21x (UNDERVALUED)

However, Enerpac Tool Group’s recent share price declines over 7 days and year to date, along with its reliance on cyclical industrial end markets, could challenge that valuation narrative.

Another view: what the SWS DCF model says about Enerpac Tool Group

While Enerpac Tool Group is presented as inexpensive on a 21x P/E, the SWS DCF model points to an estimated future cash flow value of $57.37 per share compared with the current $34.87. This suggests the stock is trading at a discount based on those assumptions. The key consideration is whether those cash flow assumptions align with your own view.

Simply Wall St performs a discounted cash flow (DCF) on every stock in the world every day (check out Enerpac Tool Group 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

If this mix of potential discount and open questions around Enerpac Tool Group’s outlook leaves you undecided, consider reviewing the numbers yourself and then weighing up the company’s 3 key rewards

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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.