10Y annualized return is
very good
at 12.3% per year
AME has met or exceeded earnings expectations in
all
recent quarters (10/10)
Strong Price-to-Earnings Ratio
Healthy Price-to-Sales Ratio
Strong Net Profit Margin
Solid Return on Equity
Low Debt Levels
Strong Interest Coverage
Strong Financial Performance
High Operating Margins
Strong Market Position and Diverse Portfolio
Acquisition Strategy and Growth Potential
Investment in Innovation
Positive Order Trends
High EV/EBITDA Ratio
Elevated P/FCF Ratio
Moderate Operating Profit Margin
Current Ratio Below 2
Low Quick Ratio
Organic Sales Decline
Project Delays
Cautious Outlook for 2025
Overall, AMETEK demonstrates strong business quality with solid financial performance and a diverse portfolio, although it faces challenges such as organic sales declines and project delays. The future prospects appear promising with a focus on acquisitions, innovation, and improving order trends, albeit with a cautious growth forecast for 2025.
Analysis Date: February 4, 2025
Last Updated: March 11, 2025
Past performance does not guarantee future results. The data presented is indicative and may not be updated in real-time.
AMETEK, Inc. is a company that makes and sells tools and devices used in many industries around the world. They create electronic instruments that help monitor and control processes in fields like aerospace, healthcare, and manufacturing. AMETEK also produces parts and systems that protect important electronic devices and help machines run smoothly. Founded in 1930 and based in Pennsylvania, AMETEK plays a key role in making sure various technologies and industries work efficiently.
Streams of revenue
Estimations for reference only
Geographic Distribution
Estimations for reference only
Core Products
Business Type
Business to Business
Competitive Advantages
Key Business Risks
Trailing Twelve Months (TTM) values provide a view of the company's performance over the last year.
Benjamin Graham's value investing approach focuses on finding stocks with a significant margin of safety between their intrinsic value and market price.
Intrinsic Value
Estimated fair value based on Graham's formula
$192.45
Current Market Price: $151.91
IV/P Ratio: 1.27x (>1.0 indicates undervalued)
Margin of Safety
Gap between intrinsic value and market price
21.0%
Graham recommended a minimum of 20-30% margin of safety
Higher values indicate a greater potential discount to fair value
Graham Criteria Checklist
Benjamin Graham's value investing checklist for AME
Positive earnings (5+ years)
Dividend history (5+ years)
P/E ratio ≤ 20 (25.72)
P/B ratio ≤ 1.5 (3.67)
Current ratio ≥ 2.0 (1.24x)
Long-term debt < Net current assets (2.83x)
Margin of safety (21.0%)
AME does not meet all Graham criteria
Trailing Twelve Months (TTM) values provide a view of the company's performance over the last year.
Profitability metrics measure a company's ability to generate earnings relative to its revenue, operating costs, and other relevant metrics. Higher values generally indicate better performance.
Return on Equity (ROE)
Measures how efficiently a company uses its equity to generate profits
14.71%
Higher values indicate better returns for shareholders
TTM (as of 2025-04-30)
Gross Profit Margin
Percentage of revenue retained after accounting for cost of goods sold
35.68%
Higher values indicate better efficiency in production
TTM (as of 2025-04-30)
Net Profit Margin
Percentage of revenue retained after accounting for all expenses
19.83%
Higher values indicate better overall profitability
TTM (as of 2025-04-30)
The net profit margin of 19.83% indicates that AME is able to convert a significant portion of its sales into actual profit, reflecting effective cost management.
A return on equity of 14.71% demonstrates that AME is efficiently using shareholders' equity to generate profits, which is a strong indicator of management performance.
The operating profit margin of 25.64% is solid but could indicate room for improvement in operational efficiency compared to peers.
Financial health metrics assess a company's ability to meet its financial obligations and its overall financial stability.
Debt to Equity Ratio
Total debt divided by total equity
0.22x
Lower values indicate less financial leverage and risk
Less than 1.0 is conservative, 1.0-2.0 is moderate, >2.0 indicates high risk
Q4 2024
Current Ratio
Current assets divided by current liabilities
1.24x
Higher values indicate better short-term liquidity
Less than 1.0 is concerning, 1.0-2.0 is adequate, greater than 2.0 is good
Q4 2024
The debt-to-equity ratio of 0.22 suggests that AME has a conservative capital structure with low reliance on debt, reducing financial risk.
An interest coverage ratio of 15.75 indicates that AME can easily cover its interest obligations, suggesting strong financial stability.
A current ratio of 1.24 indicates that AME has more current liabilities than current assets, which could pose liquidity risks if short-term obligations need to be met.
The quick ratio of 0.75 suggests that AME may not have enough liquid assets to cover its current liabilities without selling inventory, raising liquidity concerns.
Meeting Expectations
Higher values indicate better execution and credibility
Recent Results
EPS
AMETEK delivered record results in key financial metrics such as sales, operating income, and cash flow. For instance, fourth quarter sales reached $1.76 billion, with operating income at $469 million and free cash flow at $498 million, demonstrating robust cash generation capabilities.
AMETEK reported impressive operating margins of 26.6%, a 90 basis point increase from the previous year, indicating strong operational efficiency and cost management.
The company has established a strong backlog of $3.4 billion and is well-positioned across diverse markets, including aerospace, defense, and medical technology, which are expected to drive continued demand.
Despite overall strong performance, organic sales were down by 3% in the fourth quarter, raising concerns about potential headwinds in certain segments due to market conditions.
The Electronics Instruments Group (EIG) experienced project delays, affecting sales in the fourth quarter. Although the company expects these to be temporary, it does pose a risk to short-term growth.
AMETEK is actively pursuing acquisitions, such as the recent purchase of Kern Microtechnik, which expands their capabilities in high-precision machining and optical inspection. This aligns with their strategy to enhance their market position and tap into high-growth areas like semiconductor and med tech.
The company is committed to growth investments, with plans to invest approximately $85 million in R&D and marketing to support organic growth initiatives. This investment is crucial for maintaining competitive advantages in niche markets.
AMETEK reported solid order growth of 4% in the fourth quarter, and management expressed optimism about continued order strength into 2025, particularly in the aerospace and defense sectors.
While the company expects low single-digit growth in sales for 2025, this cautious outlook may reflect ongoing macroeconomic uncertainties and the potential for further project delays.