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Ametek (AME)
NYSE:AME

Ametek (AME) AI Stock Analysis

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AM

Ametek

(NYSE:AME)

Rating:79Outperform
Price Target:
$196.00
▲(9.90%Upside)
Ametek's overall score reflects its strong financial fundamentals, consistent growth, and strategic initiatives like acquisitions. While the earnings call and corporate events highlight positive prospects, the valuation and technical analysis suggest caution with potential overvaluation and mixed market momentum. The company is well-positioned for long-term growth but faces challenges in specific markets and valuation metrics.
Positive Factors
Customer Relations
The company's flywheel is driven by its closeness to customers, which allows it to solve challenges through research and development and mergers and acquisitions.
Execution Prowess
AME's execution prowess is evident through consistent margin expansion and successful mergers and acquisitions, allowing it to grow EBITDA at a near 10% compound annual growth rate since 2019.
Macro Environment Positioning
AME is well positioned in the current macroeconomic environment where growth concerns are mounting, with the ability to defend margins.
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 Concerns
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. SPDR S&P 500 ETF (SPY)

Ametek Business Overview & Revenue Model

Company DescriptionAmetek, Inc. (NYSE: AME) is a leading global manufacturer of electronic instruments and electromechanical devices. Founded in 1930 and headquartered in Berwyn, Pennsylvania, the company operates through two main business segments: Electronic Instruments Group (EIG) and Electromechanical Group (EMG). Ametek's core products and services include advanced monitoring, testing, calibration instruments, and precision electromechanical devices, catering to a diverse array of industries such as aerospace, power, and industrial markets.
How the Company Makes MoneyAmetek generates revenue through the design, manufacture, and distribution of its broad range of electronic instruments and electromechanical devices. The Electronic Instruments Group (EIG) segment contributes significantly to the company's revenue by providing instruments for process control, analytical measurement, and aerospace. This segment benefits from continuous demand for high-precision and reliable equipment. The Electromechanical Group (EMG) focuses on producing precision motion control and specialty motors, serving industries such as aerospace, defense, and medical devices. Ametek's revenue model is bolstered by its strategy of acquiring complementary businesses to expand its product offerings and market reach, alongside fostering long-term relationships with key clients and partners in various sectors.

Ametek Key Performance Indicators (KPIs)

Any
Any
Revenue by Product
Revenue by Product
Shows how much revenue each product line generates, highlighting which products are driving growth and which may need strategic adjustments.
Chart InsightsAMETEK's Aerospace and Power segment shows consistent growth, bolstered by strong demand in aerospace and defense markets, as highlighted in the earnings call. Despite a slight dip in organic sales, the Process and Analytical Instrumentation segment faces challenges with project delays. Meanwhile, Automation and Engineered Solutions experienced a notable uptick in early 2024, but recent quarters show a slowdown. The company's strategic focus on acquisitions and a robust backlog suggests resilience, although challenges in China and organic sales declines pose risks.
Data provided by:Main Street Data

Ametek Earnings Call Summary

Earnings Call Date:May 01, 2025
(Q1-2025)
|
% Change Since: 5.17%|
Next Earnings Date:Aug 05, 2025
Earnings Call Sentiment Neutral
AMETEK's first quarter performance was marked by strong cash flow and earnings growth, driven by robust order intake and effective margin management. However, challenges in the China market and declines in organic sales were notable concerns. The company's strategic investments and backlog provide a positive outlook, although uncertainties persist in global markets.
Q1-2025 Updates
Positive Updates
Strong Cash Flow and Earnings Growth
AMETEK reported robust free cash flow of $394 million, with a free cash flow to net income conversion of 112%. Earnings per share increased by 7% compared to the first quarter of 2024, exceeding guidance.
Record Backlog Levels
The company ended the first quarter with a near-record backlog of $3.47 billion, indicating strong demand and future revenue potential.
Electronic Instruments Group Performance
The Electronic Instruments Group delivered strong operating margins of 31%, with core margins up 110 basis points from the prior year.
Orders Growth
Overall orders increased by 8% and organic orders rose by 3% compared to the prior year.
Aerospace and Defense Market Strength
The Aerospace and Defense business experienced mid-single-digit growth, with strong performance in both commercial OEM and aftermarket segments.
Negative Updates
Challenges in China Market
Sales in China were down about 10% due to trade tensions and retaliatory tariffs affecting direct U.S. to China sales.
Organic Sales Decline
Overall, organic sales were down 1% compared to the previous year, indicating challenges in core business areas despite acquisition growth.
Process Business Sales Decline
The Process business experienced low single-digit declines in organic sales, with project delays due to customer cautiousness.
Company Guidance
During the first quarter of 2025, AMETEK delivered solid financial performance, exceeding expectations with several key metrics. The company achieved sales of $1.73 billion, which remained stable compared to the first quarter of 2024. Organic sales saw a slight decline of 1%, with acquisitions contributing a 1% increase, while foreign currency impact was neutral. Orders increased impressively by 8%, with organic orders up 3% year-over-year, resulting in a book-to-bill ratio of 1.04 and a near-record backlog of $3.47 billion. Operating income rose by 2% to $455 million, with operating margins improving by 60 basis points to 26.3%. EBITDA increased by 3% to $559 million, reflecting a strong EBITDA margin of 32.2%. The company generated free cash flow of $394 million with a conversion rate of 112%, and diluted earnings per share climbed 7% to $1.75, surpassing the guidance range of $1.67 to $1.69. Looking ahead, AMETEK reaffirmed its full-year guidance, expecting sales to grow in the low single digits and diluted EPS to range between $7.02 to $7.18, up 3% to 5% from the previous year. The company remains committed to strategic investments, including an additional $85 million in research, development, and engineering, and continues to actively pursue acquisitions alongside a $1.25 billion share repurchase authorization.

Ametek Financial Statement Overview

Summary
Ametek shows strong financial health with consistent revenue growth, profitability, and efficient cash flow management. The company's low leverage and strong return on equity highlight its financial stability and effective capital management. However, a slight decrease in equity suggests a need for ongoing financial vigilance.
Income Statement
88
Very Positive
Ametek has demonstrated strong financial performance with a consistent increase in total revenue over the years, highlighted by a TTM gross profit margin of 52.14% and a net profit margin of 20.42%. The company's EBIT and EBITDA margins are robust, at 26.19% and 30.23% respectively for TTM, indicating efficiency in converting revenue into profit. The revenue growth rate is healthy, with a 5.84% increase from 2023 to 2024, showcasing a positive growth trajectory.
Balance Sheet
78
Positive
Ametek's balance sheet reflects a solid financial position with a low debt-to-equity ratio of 0.05 in TTM, indicating low leverage. The return on equity is strong at 14.21%, showing effective use of equity to generate profit. The equity ratio of 67.03% indicates a robust equity base relative to total assets, contributing to financial stability. However, the slight decrease in stockholders' equity from the previous year suggests a need for cautious financial management.
Cash Flow
85
Very Positive
Ametek's cash flow performance is impressive, with a strong free cash flow to net income ratio of 1.21, indicating efficient cash generation relative to profits. The operating cash flow to net income ratio is 1.30, highlighting effective cash management. The free cash flow growth rate of 0.70% from 2023 to 2024, though moderate, is stable, demonstrating resilience in cash flow generation despite fluctuations in capital expenditures.
Breakdown
TTMDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income StatementTotal Revenue
6.94B6.94B6.60B6.15B5.55B4.54B
Gross Profit
2.51B2.48B2.38B2.15B1.91B1.54B
EBIT
1.82B1.78B1.71B1.50B1.31B1.03B
EBITDA
2.10B2.16B2.03B1.83B1.60B1.42B
Net Income Common Stockholders
1.42B1.38B1.31B1.16B990.05M872.44M
Balance SheetCash, Cash Equivalents and Short-Term Investments
346.77M374.00M409.80M345.39M346.77M1.21B
Total Assets
11.90B14.63B15.02B12.43B11.90B10.36B
Total Debt
2.54B2.08B3.37B2.39B2.54B2.41B
Net Debt
2.20B1.71B2.96B2.04B2.20B1.20B
Total Liabilities
5.03B4.98B6.29B4.95B5.03B4.41B
Stockholders Equity
6.87B9.66B8.73B7.48B6.87B5.95B
Cash FlowFree Cash Flow
1.71B1.70B1.60B1.01B1.05B1.21B
Operating Cash Flow
1.84B1.83B1.74B1.15B1.16B1.28B
Investing Cash Flow
-349.11M-244.81M-2.38B-552.76M-2.06B61.63M
Financing Cash Flow
-1.46B-1.60B697.28M-575.70M39.34M-539.44M

Ametek Technical Analysis

Technical Analysis Sentiment
Positive
Last Price178.35
Price Trends
50DMA
170.08
Positive
100DMA
176.32
Positive
200DMA
176.80
Positive
Market Momentum
MACD
1.75
Positive
RSI
55.37
Neutral
STOCH
38.63
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For AME, the sentiment is Positive. The current price of 178.35 is below the 20-day moving average (MA) of 178.78, above the 50-day MA of 170.08, and above the 200-day MA of 176.80, indicating a neutral trend. The MACD of 1.75 indicates Positive momentum. The RSI at 55.37 is Neutral, neither overbought nor oversold. The STOCH value of 38.63 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive 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 (66)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
AMAME
79
Outperform
$41.18B29.2114.96%0.64%2.98%7.29%
ITITW
79
Outperform
$72.54B21.79107.62%2.38%-1.85%12.04%
PHPH
76
Outperform
$85.77B25.8427.16%1.00%-0.23%22.41%
IRIR
74
Outperform
$33.54B41.098.09%0.10%5.27%0.61%
EMEMR
73
Outperform
$69.47B29.489.82%1.71%6.49%24.14%
ROROK
68
Neutral
$36.56B40.8325.86%1.60%-11.19%-22.50%
66
Neutral
$4.51B12.295.40%248.53%4.14%-12.41%
* Industrials Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
AME
Ametek
178.35
6.47
3.76%
EMR
Emerson Electric Company
123.51
16.69
15.62%
ITW
Illinois Tool Works
247.56
13.78
5.89%
PH
Parker Hannifin
671.26
150.65
28.94%
ROK
Rockwell Automation
324.33
73.69
29.40%
IR
Ingersoll Rand
83.12
-7.99
-8.77%

Ametek Corporate Events

Executive/Board ChangesShareholder Meetings
Ametek Holds Annual Stockholders Meeting, Elects Board Members
Positive
May 8, 2025

On May 7, 2025, Ametek, Inc. held its Annual Meeting of Stockholders where key decisions were made, including the election of Dean Seavers and David A. Zapico to the Board of Directors for terms expiring in 2028. Additionally, stockholders approved the executive compensation on an advisory basis and ratified Ernst & Young LLP as the independent registered public accounting firm for the year ending December 31, 2025. These decisions reflect continued confidence in the company’s leadership and financial oversight, potentially impacting its strategic direction and stakeholder relations.

M&A Transactions
AMETEK to Acquire FARO Technologies for $920 Million
Positive
May 8, 2025

On May 6, 2025, AMETEK announced a definitive agreement to acquire FARO Technologies for $44 per share in cash, valuing FARO at approximately $920 million. This acquisition, approved by both companies’ boards, is expected to enhance AMETEK’s Ultra Precision Technologies division by expanding its presence in growth markets and complementing its existing Creaform business. The transaction, subject to customary conditions and regulatory approvals, is anticipated to close in the second half of 2025, potentially accelerating growth and offering new opportunities for stakeholders.

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.