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Ametek (AME)
NYSE:AME
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Ametek
(NYSE:AME)72Outperform
Positive Factors
Acquisitions
Ametek closed on the acquisition of Kern Microtechnik, manufacturers of high-precision machining equipment, historically acquisitions have been positive catalysts for AME shares.
Financial Performance
The company experienced a significant stock price increase by 8.5%, driven by a margin-driven EPS beat and an upturn in total orders.
Negative Factors
Earnings Guidance
Initial 2025 adj. EPS guidance ($7.02-7.18) was below prior $7.30 consensus.
Ametek (AME) vs. S&P 500 (SPY)
Market Cap
$42.29B
Dividend Yield0.61%
Average Volume (3M)1.40M
Price to Earnings (P/E)30.9
Beta (1Y)0.84
Revenue Growth5.22%
EPS Growth4.46%
CountryUS
Employees21,500
SectorIndustrials
Sector Strength66
IndustryIndustrial Goods
Share Statistics
EPS (TTM)5.93
Shares Outstanding230,659,380
10 Day Avg. Volume1,275,574
30 Day Avg. Volume1,404,110
Financial Highlights & Ratios
PEG Ratio6.93
Price to Book (P/B)N/A
Price to Sales (P/S)6.20
Price to Cash Flow (P/CF)19.60
P/FCF Ratio19.60
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$202.86Price Target Upside9.63% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering8
Ametek Business Overview & Revenue Model
Company DescriptionAMETEK, Inc. is a global manufacturer of electronic instruments and electromechanical devices. The company specializes in manufacturing instruments used for monitoring, examining, calibration and display purposes in the power, aerospace and industrial instrumentation markets. It also produces engineered electrical connectors and electronics packaging for electronic applications in defense, aerospace, medical and industrial markets.
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 demonstrates strong financial health with impressive revenue and profit growth, solid balance sheet metrics, and generally healthy cash flows. The company is well-positioned within the industrial goods sector, although attention should be given to updated cash flow reporting and asset management to maintain its growth trajectory.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 | |||||
| TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|
| Income Statement | Total Revenue | ||||
| 5.92B | 6.94B | 6.60B | 6.15B | 5.55B | 4.54B | Gross Profit |
| 2.05B | 2.48B | 2.38B | 2.15B | 1.91B | 1.54B | EBIT |
| 1.42B | 1.78B | 1.71B | 1.19B | 1.01B | 1.03B | EBITDA |
| 1.75B | 2.16B | 2.03B | 1.82B | 1.60B | 1.28B | Net Income Common Stockholders |
| 1.09B | 1.38B | 1.31B | 1.16B | 990.05M | 872.44M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | ||||
| 374.00M | 374.00M | 409.80M | 345.39M | 346.77M | 1.21B | Total Assets |
| 14.63B | 14.63B | 15.02B | 12.43B | 11.90B | 10.36B | Total Debt |
| 2.08B | 2.08B | 3.37B | 2.39B | 2.54B | 2.41B | Net Debt |
| 1.71B | 1.71B | 2.96B | 2.04B | 2.20B | 1.20B | Total Liabilities |
| 4.98B | 4.98B | 6.29B | 4.95B | 5.03B | 4.41B | Stockholders Equity |
| 9.66B | 9.66B | 8.73B | 7.48B | 6.87B | 5.95B |
| Cash Flow | Free Cash Flow | ||||
| 904.04M | 1.70B | 1.60B | 1.01B | 1.05B | 1.21B | Operating Cash Flow |
| 1.03B | 1.83B | 1.74B | 1.15B | 1.16B | 1.28B | Investing Cash Flow |
| -214.73M | -244.81M | -2.38B | -552.76M | -2.06B | 61.63M | Financing Cash Flow |
| -822.65M | -1.60B | 697.28M | -575.70M | 39.34M | -539.44M |
Ametek Technical Analysis
Neutral
185.04
Price Trends
183.54
Positive
183.55
Positive
175.39
Positive
Market Momentum
0.57
Positive
49.06
Neutral
29.14
Neutral
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 185.04 is below the 20-day moving average (MA) of 185.65, above the 50-day MA of 183.54, and above the 200-day MA of 175.39, indicating a neutral trend. The MACD of 0.57 indicates Positive momentum. The RSI at 49.06 is Neutral, neither overbought nor oversold. The STOCH value of 29.14 is Neutral, 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 (62)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
80 Outperform | $74.94B | 21.80 | 110.24% | 2.27% | -1.30% | 20.26% | |
74 Outperform | $109.45B | 29.39 | 20.23% | 1.35% | 7.25% | 18.36% | |
74 Outperform | $64.30B | 27.12 | 9.66% | 1.85% | 10.29% | 22.72% | |
72 Outperform | $42.29B | 30.93 | 14.25% | 0.61% | 5.22% | 4.46% | |
66 Neutral | $30.29B | 33.33 | 26.22% | 1.91% | -11.28% | -23.69% | |
65 Neutral | $147.17B | 38.93 | 7.57% | 0.52% | -13.50% | -17.25% | |
62 Neutral | $8.11B | 13.34 | 1.17% | 3.02% | 4.16% | -15.14% |
* Industrials Sector Average
Performance Comparison
AME
Ametek
185.04
5.81
3.24%
DHR
Danaher
210.56
-41.25
-16.38%
ETN
Eaton
287.73
-5.39
-1.84%
EMR
Emerson Electric Company
115.84
7.99
7.41%
ITW
Illinois Tool Works
261.05
6.66
2.62%
ROK
Rockwell Automation
273.66
-12.17
-4.26%
Ametek Earnings Call Summary
Earnings Call Date: Feb 4, 2025 | % Change Since: 0.49% | Next Earnings Date: May 6, 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.Highlights
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.
Lowlights
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.