NYSE:EPAC
ENERPAC TOOL GROUP CORP
A leading global manufacturer of hydraulic tools providing essential fluid power solutions to heavy industry sectors.
Key Metrics
Investment Thesis
Bull Case
The stock offers compelling value with net income nearly doubling from 2023 to 2025, indicating strong operational momentum and market share gains. Significant cash reserves of $151.6M and positive operating cash flow provide flexibility for strategic acquisitions or dividend growth alongside the recent $68.7M in buybacks. The recovery in revenue trends suggests the company is well-positioned to capitalize on post-pandemic industrial expansion.
Bear Case
Investors should be cautious regarding the substantial goodwill of $289.8M which could be impaired if acquired businesses underperform expectations. The company faces potential headwinds from a debt load of $182.2M combined with significant accumulated other comprehensive income losses of -$104.1M affecting equity stability. Recent capital allocation towards repurchases may limit organic investment capacity if market conditions deteriorate further.
About ENERPAC TOOL GROUP CORP
Enerpac Tool Group Corp designs and manufactures high-pressure hydraulic tools and components for global industries including aerospace, automotive, construction, and energy. The company serves diverse markets with a focus on reliability and innovation in fluid power solutions. Revenue growth in 2025 reflects strong demand across these sectors.
Analysis
Management Discussion
Management successfully navigated market headwinds to drive revenue up to $616.9M in 2025 from $598.2M the prior year, while net profit improved to $92.7M compared to $46.6M in 2023. The strong cash flow from operations of $111.3M provided liquidity to return capital through share repurchases of $68.7M despite investing $46.0M in acquisitions and divestitures. Operating expenses of $178.4M were managed effectively relative to the growing revenue stream, resulting in a healthy operating profit margin.
Industry Overview
The global hydraulic tools industry is characterized by high specialization and reliance on infrastructure spending cycles within construction, energy, and manufacturing. Competition is moderate but dominated by established players with extensive R&D capabilities similar to Enerpac's $14.5M annual research spend. Industry margins are generally stable, supported by the durability of hydraulic components in heavy machinery applications.
Financial Statements
Income Statement
Balance Sheet
Cash Flow
| Metric | 2023 | 2024 | 2025 |
|---|---|---|---|
| Revenue | $598.2M | $589.5M | $616.9M |
| Cost of Revenue | $303.2M | $288.5M | $305.1M |
| Gross Profit | $295.0M | $301.0M | $311.8M |
| Operating Expenses | $211.1M | $179.4M | $178.4M |
| Operating Income | $83.9M | $121.6M | $133.5M |
| R&D | $9.0M | $12.4M | $14.5M |
| G&A | $205.1M | $168.6M | $166.9M |
| Stock-Based Comp | $8.6M | $10.9M | $13.0M |
| D&A | $16.3M | $13.3M | $15.7M |
| Depreciation | $11.2M | $10.0M | $10.1M |
| Amortization | $5.1M | $3.3M | $5.6M |
| Other OpEx | $-2.9M | $-1.5M | $-3.1M |
| Non-Operating Income | $-15.0M | $-16.1M | $-12.7M |
| Interest Income | $2.6M | $2.5M | $2.3M |
| Pre-Tax Income | $68.9M | $105.5M | $120.7M |
| Income Tax | $15.2M | $23.3M | $28.0M |
| Continuing Ops | $53.6M | $82.2M | $92.7M |
| Discontinued Ops | $7.1M | $-3.5M | $0 |
| Net Income | $46.6M | $85.7M | $92.7M |
| Minority Interest | $0 | $0 | $0 |
| Net to Common | $46.6M | $85.7M | $92.7M |
| Metric | 2023 | 2024 | 2025 |
|---|---|---|---|
| Current Assets | $355.6M | $372.3M | $376.1M |
| Cash & Equivalents | $154.4M | $167.1M | $151.6M |
| Accounts Receivable | $97.6M | $104.3M | $106.1M |
| Inventory | $74.8M | $72.9M | $78.8M |
| Prepaid Expenses | $28.8M | — | — |
| Other Current Assets | $0 | $27.9M | $39.7M |
| Long-Term Assets | $407.0M | $405.1M | $451.7M |
| PP&E (Net) | $39.0M | $40.3M | $53.3M |
| Intangibles | $37.3M | $36.1M | $46.9M |
| Goodwill | $266.5M | $269.6M | $289.8M |
| Operating Leases | $37.7M | $33.0M | $35.4M |
| Other LT Assets | $26.4M | $26.2M | $26.3M |
| Total Assets | $762.6M | $777.3M | $827.9M |
| Current Liabilities | $148.1M | $129.4M | $137.1M |
| Accounts Payable | $50.5M | $43.4M | $42.9M |
| Current Debt | $3.8M | $5.0M | $7.5M |
| Current Leases | $9.8M | $9.5M | $9.9M |
| Other Current Liab | $84.1M | $71.6M | $76.8M |
| Long-Term Liabilities | $287.9M | $256.0M | $257.1M |
| Long-Term Debt | $210.3M | $189.5M | $182.2M |
| LT Operating Leases | $29.2M | $25.2M | $28.2M |
| Other LT Liab | $48.3M | $41.3M | $46.7M |
| Total Liabilities | $436.0M | $385.3M | $394.2M |
| Shareholders' Equity | $326.6M | $392.0M | $433.7M |
| Paid-In Capital | $220.5M | $235.7M | $243.1M |
| Retained Earnings | $1.01B | $261.9M | $284.1M |
| AOCI | $-121.2M | $-116.4M | $-104.1M |
| Treasury Stock | $800.5M | $0 | — |
| Total L&E | $762.6M | $777.3M | $827.9M |
| Metric | 2023 | 2024 | 2025 |
|---|---|---|---|
| Net Income (CFO) | $46.6M | $85.7M | $92.7M |
| Non-Cash Adjustments | $40.0M | $18.6M | $334.0K |
| Working Capital Changes | $-8.9M | $-23.1M | $18.2M |
| Cash from Operations | $77.6M | $81.3M | $111.3M |
| Cash from Investing | $11.3M | $-13.9M | $-46.0M |
| Debt Issuances | $200.0M | — | — |
| Share Buybacks | $57.7M | $38.4M | $68.7M |
| Dividends Paid | $2.3M | $2.2M | $2.2M |
| Cash from Financing | $-53.1M | $-56.3M | $-81.5M |
| FX Effect | $-2.1M | $1.6M | $638.0K |
| Net Change in Cash | $33.7M | $12.7M | $-15.5M |
| Beginning Cash | $120.7M | $154.4M | $167.1M |
| Ending Cash | $154.4M | $167.1M | $151.6M |
Frequently Asked Questions
How does ENERPAC TOOL GROUP CORP make money?
The company's revenue is driven by its core manufacturing operations which generate over $616M in sales, supported by significant investments in R&D totaling $14.5M to maintain product leadership. Financial data indicates a robust operational profile with gross profits of $311.8M against cost of revenues at $305.1M, highlighting efficient production scales. The balance sheet shows substantial goodwill of $289.8M and intangible assets, suggesting significant value derived from acquired brands and proprietary technology portfolios.
What are the main risks for EPAC?
Exposure to cyclical downturns in construction and automotive sectors which could impact the $78.8M inventory levels. Currency fluctuations affecting international sales given the company's global footprint and cash holdings of $151.6M. High leverage with long-term debt of $182.2M against total liabilities of $394.2M creating refinancing pressures in a rising rate environment.
What is EPAC's competitive advantage?
Strong global distribution network ensuring rapid delivery to critical industries like aerospace and construction. High barrier to entry due to specialized hydraulic engineering capabilities and extensive patent portfolio protecting core designs. Proven resilience with operating profits of $133.5M demonstrating efficient cost management relative to a $616.9M revenue base.
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Not financial advice. All content is for informational purposes only. Data may contain errors. Consult a qualified financial advisor before making investment decisions.