Energizer trades at $27.31 per share and has moved almost in lockstep with the market over the last six months. The stock has lost 13.4% while the S&P 500 is down 10.5%. This may have investors wondering how to approach the situation.

Is there a buying opportunity in Energizer, or does it present a risk to your portfolio? See what our analysts have to say in our full research report, it’s free.

Even though the stock has become cheaper, we're swiping left on Energizer for now. Here are three reasons why we avoid ENR and a stock we'd rather own.

Why Do We Think Energizer Will Underperform?

Masterminds behind the viral Energizer Bunny mascot, Energizer (NYSE:ENR) is one of the world's largest manufacturers of batteries.

1. Core Business Falling Behind as Demand Plateaus

When analyzing revenue growth, we care most about organic revenue growth. This metric captures a business’s performance excluding one-time events such as mergers, acquisitions, and divestitures as well as foreign currency fluctuations.

The demand for Energizer’s products has barely risen over the last eight quarters. On average, the company’s organic sales have been flat.

2. Projected Revenue Growth Is Slim

Forecasted revenues by Wall Street analysts signal a company’s potential. Predictions may not always be accurate, but accelerating growth typically boosts valuation multiples and stock prices while slowing growth does the opposite.

Over the next 12 months, sell-side analysts expect Energizer’s revenue to rise by 1.1%. While this projection implies its newer products will catalyze better top-line performance, it is still below the sector average.

3. Free Cash Flow Margin Dropping

Free cash flow isn't a prominently featured metric in company financials and earnings releases, but we think it's telling because it accounts for all operating and capital expenses, making it tough to manipulate. Cash is king.

As you can see below, Energizer’s margin dropped by 4 percentage points over the last year. If its declines continue, it could signal increasing investment needs and capital intensity. Energizer’s free cash flow margin for the trailing 12 months was 7.6%.

Final Judgment

Energizer doesn’t pass our quality test. After the recent drawdown, the stock trades at 7.6× forward price-to-earnings (or $27.31 per share). While this valuation is optically cheap, the potential downside is huge given its shaky fundamentals. There are better stocks to buy right now. Let us point you toward a dominant Aerospace business that has perfected its M&A strategy.

Stocks We Would Buy Instead of Energizer

The market surged in 2024 and reached record highs after Donald Trump’s presidential victory in November, but questions about new economic policies are adding much uncertainty for 2025.

While the crowd speculates what might happen next, we’re homing in on the companies that can succeed regardless of the political or macroeconomic environment. Put yourself in the driver’s seat and build a durable portfolio by checking out our Top 9 Market-Beating Stocks. This is a curated list of our High Quality stocks that have generated a market-beating return of 175% over the last five years.

Stocks that made our list in 2019 include now familiar names such as Nvidia (+2,183% between December 2019 and December 2024) as well as under-the-radar businesses like Sterling Infrastructure (+1,096% five-year return). Find your next big winner with StockStory today for free.