Ametek (AME) AI Stock Analysis

• Market Cap: $39.27B
• Dividend Yield: 0.68%
• Average Volume (3M): 1.58M
• Price to Earnings (P/E): 27.9
• Beta (1Y): 0.88
• Revenue Growth: 2.98%
• EPS Growth: 7.29%
• Country: US
• Employees: 21,500
• Sector: Industrials
• Sector Strength: 78
• Industry: Industrial - Machinery
• EPS (TTM): 1.75
• Shares Outstanding: 230,878,980
• 10 Day Avg. Volume: 1,343,578
• 30 Day Avg. Volume: 1,577,804
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): 0.00
• Price to Cash Flow (P/CF): 0.00
• P/FCF Ratio: 0.00
• Enterprise Value/Market Cap: 1.06
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: 16.81
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: $188.17
• Price Target Upside: 12.11% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 8

Ametek demonstrates robust financial performance with consistent revenue growth and strong profit margins. The stock's technical indicators suggest mixed signals, with a potential for upward momentum. While the P/E ratio indicates possible overvaluation, the earnings call reveals strong growth prospects despite challenges in specific markets. Overall, Ametek is well-positioned for growth but faces some valuation and market challenges.

Positive Factors

Business Model Strength

AME's business model is less dependent on macro growth and brings strong pricing power, selling critical and bespoke products with limited competition.

Customer Engagement

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.

Negative Factors

Growth Expectations

There is concern that Consensus is setting a high bar on organic growth, modeling 5% growth in future years, which is roughly double the historical rate.

International Revenue Risk

Approximately 50% of AME's revenue comes from international markets, which could be negatively impacted by U.S. protectionism.

International Trade Challenges

AME faces a tough challenge with approximately 50% of revenue coming from international markets, which may be impacted by U.S. protectionism.

Ametek Business Overview & Revenue Model

Company Description

AMETEK, 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 Money

Ametek 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 exhibits strong financial health with consistent revenue growth, robust profit margins, and efficient cash flow management. Despite a slight decrease in equity, the company's low leverage and strong return on equity highlight its stability and effective capital management.

Income Statement

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

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

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
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

• Technical Analysis Sentiment: Negative
• Last Price: 167.85
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For AME, the sentiment is Negative. The current price of 167.85 is above the 20-day moving average (MA) of 162.84, below the 50-day MA of 171.19, and below the 200-day MA of 175.18, indicating a neutral trend. The MACD of 0.06 indicates Negative momentum. The RSI at 51.89 is Neutral, neither overbought nor oversold. The STOCH value of 83.52 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for AME.

Ametek Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
AME	77 Outperform	$39.27B	27.85	14.96%	0.68%	2.98%	7.29%
PH	76 Outperform	$79.71B	23.83	27.16%	1.06%	-0.23%	22.41%
ITW	74 Outperform	$71.00B	21.33	107.62%	2.45%	-1.85%	12.04%
EMR	70 Outperform	$61.08B	25.76	9.66%	1.94%	10.29%	22.72%
IR	69 Neutral	$30.93B	37.93	8.09%	0.10%	5.27%	0.61%
ROK	67 Neutral	$28.68B	31.56	26.22%	2.02%	-11.28%	-23.69%
Sector *	64 Neutral	$4.27B	11.80	5.31%	249.79%	4.07%	-9.02%