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Ametek (AME)
NYSE:AME
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Ametek
(NYSE:AME)
73Outperform
Positive Factors
Customer Closeness
The company's flywheel is its closeness to the customer, providing AME with an early read on top challenges, allowing it to solve them through research and development and mergers and acquisitions.
Financial Performance
AME has managed to grow EBITDA at a nearly 10% compound annual growth rate since 2019, outperforming the peer group despite imbalanced M&A versus organic growth.
Product Differentiation
AME's business model is less dependent on macro growth and brings strong pricing power, selling critical and bespoke products with limited competition.
Negative Factors
International Revenue Risk
Approximately 50% of AME's revenue comes from international markets, which could be negatively impacted by U.S. protectionism.
Organic Growth Expectations
There is concern that Consensus is setting a high bar on organic growth, modeling 5% in 2025-27, which is roughly twice the historical growth rate.
Tariff Impact
The discussed tariffs imply a significant annualized financial headwind that isn't already incorporated into guidance.
Ametek (AME) vs. S&P 500 (SPY)
Market Cap
$38.46B
Dividend Yield0.69%
Average Volume (3M)1.52M
Price to Earnings (P/E)28.1
Beta (1Y)0.88
Revenue Growth5.22%
EPS Growth4.46%
CountryUS
Employees21,500
SectorIndustrials
Sector Strength72
IndustryIndustrial - Machinery
Share Statistics
EPS (TTM)5.93
Shares Outstanding230,746,900
10 Day Avg. Volume1,312,325
30 Day Avg. Volume1,517,875
Financial Highlights & Ratios
PEG Ratio6.30
Price to Book (P/B)N/A
Price to Sales (P/S)5.80
Price to Cash Flow (P/CF)18.30
P/FCF Ratio18.30
Enterprise Value/Market Cap1.14
Enterprise Value/RevenueN/A
Enterprise Value/Gross Profit17.68
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$188.75Price Target Upside13.23% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering9
Ametek Business Overview & Revenue Model
Company DescriptionAMETEK, Inc. manufactures and sells electronic instruments and electromechanical devices worldwide. It operates in two segments, Electronic Instruments (EIG) and Electromechanical (EMG). The company's EIG segment offers advanced instruments for the process, aerospace, power, and industrial markets; process and analytical instruments for the oil and gas, petrochemical, pharmaceutical, semiconductor, automation, and food and beverage industries; and instruments to the laboratory equipment, ultra-precision manufacturing, medical, and test and measurement markets. This segment also provides power quality monitoring and metering devices, uninterruptible power supplies, programmable power equipment, electromagnetic compatibility test equipment, gas turbines, and environmental health and safety market sensors, dashboard instruments for heavy trucks and other vehicles, and instrumentation and controls for the food and beverage industries; and aircraft and engine sensors, monitoring systems, power supplies, fuel and fluid measurement systems, and data acquisition systems for the aerospace industry. Its EMG segment offers engineered electrical connectors and electronics packaging to protect sensitive devices and mission-critical electronics; precision motion control products for data storage, medical devices, business equipment, automation, and other applications; high-purity powdered metals, strips and foils, specialty clad metals, and metal matrix composites; motor-blower systems and heat exchangers for use in thermal management, military, commercial aircraft, and military ground vehicles; and motors for use in commercial appliances, fitness equipment, food and beverage machines, hydraulic pumps, and industrial blowers. This segment also operates a network of aviation maintenance, repair, and overhaul facilities. In addition, the company offers clinical and educational communication solutions. AMETEK, Inc. was founded in 1930 and is headquartered in Berwyn, Pennsylvania.
How the Company Makes MoneyAmetek generates revenue primarily through the design, manufacturing, and distribution of its diverse range of electronic instruments and electromechanical devices. The Electronic Instruments Group (EIG) contributes significantly to its earnings by providing highly advanced and reliable monitoring and testing equipment used in sectors like power generation, aerospace, and industrial production. The Electromechanical Group (EMG) adds to the revenue stream through the production of precision motion control products and specialty metals that serve industries including aerospace, automotive, and medical. Ametek's business model involves direct sales to customers, as well as through a network of distributors and partners, which enables the company to reach a wide customer base globally. Strategic acquisitions of complementary businesses also play a crucial role in enhancing their product offerings and expanding their market reach, which further contributes to their financial performance.
Ametek Financial Statement Overview
Summary
Ametek shows strong financial health with impressive revenue and profit growth, solid balance sheet metrics, and generally healthy cash flows. The company's income statement and balance sheet scores are high, reflecting strong operational efficiency and prudent financial management. However, the cash flow score suggests a need for updated reporting.Income Statement
Ametek has shown solid growth in revenues, with a consistent upward trend over the years, increasing from $4.54 billion in 2020 to $6.94 billion in 2024. The net profit margin is robust, supported by a significant net income increase from $872 million in 2020 to $1.38 billion in 2024. The company's EBIT and EBITDA margins are strong, reflecting operational efficiency.88
Very Positive
Balance Sheet
The balance sheet is strong, with a healthy equity ratio of approximately 66% in 2024. The debt-to-equity ratio has improved over the years, indicating prudent financial management. Return on equity remains high, showcasing effective utilization of shareholder funds. However, total assets have slightly decreased from 2023 to 2024, which warrants monitoring.85
Very Positive
Cash Flow
Ametek's cash flow statements show stability, with free cash flow consistently positive, although it was zero in 2024 due to unreported figures. Historically, the company has maintained a strong operating cash flow relative to net income. The lack of current cash flow data suggests a need for updated reporting.75
Positive
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 6.94B | 6.60B | 6.15B | 5.55B | 4.54B | Gross Profit |
| 2.48B | 2.38B | 2.15B | 1.91B | 1.54B | EBIT |
| 1.78B | 1.71B | 1.50B | 1.31B | 1.03B | EBITDA |
| 2.16B | 2.03B | 1.83B | 1.60B | 1.42B | Net Income Common Stockholders |
| 1.38B | 1.31B | 1.16B | 990.05M | 872.44M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 374.00M | 409.80M | 345.39M | 346.77M | 1.21B | Total Assets |
| 14.63B | 15.02B | 12.43B | 11.90B | 10.36B | Total Debt |
| 2.08B | 3.37B | 2.39B | 2.54B | 2.41B | Net Debt |
| 1.71B | 2.96B | 2.04B | 2.20B | 1.20B | Total Liabilities |
| 4.98B | 6.29B | 4.95B | 5.03B | 4.41B | Stockholders Equity |
| 9.66B | 8.73B | 7.48B | 6.87B | 5.95B |
| Cash Flow | Free Cash Flow | |||
| 1.70B | 1.60B | 1.01B | 1.05B | 1.21B | Operating Cash Flow |
| 1.83B | 1.74B | 1.15B | 1.16B | 1.28B | Investing Cash Flow |
| -244.81M | -2.38B | -552.76M | -2.06B | 61.63M | Financing Cash Flow |
| -1.60B | 697.28M | -575.70M | 39.34M | -539.44M |
Ametek Technical Analysis
Neutral
166.69
Price Trends
173.60
Negative
178.95
Negative
175.26
Negative
Market Momentum
-2.99
Negative
51.71
Neutral
87.21
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For AME, the sentiment is Neutral. The current price of 166.69 is above the 20-day moving average (MA) of 161.62, below the 50-day MA of 173.60, and below the 200-day MA of 175.26, indicating a neutral trend. The MACD of -2.99 indicates Negative momentum. The RSI at 51.71 is Neutral, neither overbought nor oversold. The STOCH value of 87.21 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for AME.
Ametek Risk Analysis
Ametek disclosed 18 risk factors in its most recent earnings report. Ametek reported the most risks in the “Legal & Regulatory” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Ametek Peers Comparison
Overall Rating
UnderperformOutperform
Sector (63)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
74 Outperform | $70.26B | 20.45 | 110.24% | 2.46% | -1.30% | 20.26% | |
73 Outperform | $38.46B | 28.12 | 14.97% | 0.69% | 5.22% | 4.46% | |
70 Outperform | $59.37B | 25.04 | 9.66% | 2.00% | 10.29% | 22.72% | |
67 Neutral | $28.09B | 30.93 | 26.22% | 2.06% | -11.28% | -23.69% | |
67 Neutral | $30.22B | 36.41 | 8.40% | 0.11% | 5.22% | 8.01% | |
66 Neutral | $77.00B | 24.69 | 25.87% | 1.09% | 0.41% | 19.76% | |
63 Neutral | $4.27B | 11.40 | 5.38% | 214.63% | 4.11% | -8.98% |
* Industrials Sector Average
Performance Comparison
AME
Ametek
166.69
-9.84
-5.57%
EMR
Emerson Electric Company
105.28
-2.53
-2.35%
ITW
Illinois Tool Works
239.50
-3.92
-1.61%
PH
Parker Hannifin
598.02
49.34
8.99%
ROK
Rockwell Automation
248.38
-26.45
-9.62%
IR
Ingersoll Rand
74.98
-18.33
-19.64%
Ametek Earnings Call Summary
Earnings Call Date:Feb 04, 2025
(Q4-2024)
| % Change Since: -9.31%|
Next Earnings Date:May 01, 2025
Earnings Call Sentiment Positive
AMETEK's Q4 2024 performance was strong, with record-breaking financial metrics, robust order growth, and successful strategic initiatives such as acquisitions and share repurchases. Despite challenges such as organic sales decline and inventory destocking, the overall outlook remains positive with a focus on long-term growth.Q4-2024 Updates
Positive Updates
Record-Breaking Financial Performance
AMETEK achieved record levels for sales ($1.76 billion), operating income ($469 million), EBITDA ($561 million), and diluted earnings per share ($1.87) in Q4 2024. Free cash flow also reached a record $498 million, up 4% from the previous year, with a cash flow to net income conversion of 129%.
Strong Order Growth and Backlog
Organic orders increased by 4% in Q4, contributing to a strong backlog of $3.4 billion. Positive order growth was noted across both the EIG and EMG segments.
Successful Share Repurchases and Acquisitions
AMETEK repurchased $155 million in shares in Q4 and $220 million for the year. The acquisition of Kern Microtechnik for approximately €105 million was announced, aligning with their strategic growth initiatives.
Margin Expansion
Operating margins improved to 26.6% in Q4, up 90 basis points from the prior year. Core margins increased by 140 basis points, and EBITDA margins reached 31.9%.
EIG Segment Performance
EIG operating income reached a record $386.6 million, with operating margins at 31.8%, up 280 basis points from the prior year. Growth was driven by Aerospace and Defense and Advanced Optical Metrology businesses.
Negative Updates
Decline in Organic Sales
Q4 2024 saw a 3% decline in organic sales, although acquisitions added 5 points to sales growth. The Electromechanical Group's organic sales were down 4%.
Inventory Destocking Challenges
The EMG segment faced headwinds from inventory destocking, particularly impacting OEM exposed businesses, leading to a 1% decrease in operating income for the segment.
Project Delays in EIG
Similar to the previous year, EIG experienced some project delays as customers remained cautious at year-end, affecting sales.
Company Guidance
In the AMETEK Fourth Quarter 2024 earnings call, the company provided comprehensive guidance with several key metrics. Sales reached a record $1.76 billion, marking a 2% increase from the previous year, although organic sales decreased by 3%. Acquisitions contributed a 5% sales increase, and foreign currency impact was neutral. AMETEK's operating income was a record $469 million, up 5% year-over-year, with operating margins improving by 90 basis points to 26.6%. EBITDA was also a record at $561 million, with margins of 31.9%. The company generated a record $498 million in free cash flow, with a conversion rate of 129%. Diluted earnings per share were $1.87, an 11% increase from the previous year, surpassing the guidance range of $1.81 to $1.06. For 2025, AMETEK anticipates low single-digit growth in both overall and organic sales and projects diluted earnings per share to be in the range of $7.02 to $7.18, reflecting a 3% to 5% increase over 2024.Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.