Amphenol: Gaining Market Share, But Upside Is Capped By Valuation
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Ezequiel Szyrko117 FollowersFollow5ShareSavePlay(16min)CommentsSummaryRevenues grew by 53% Y/Y (41% organically). Its main segment, "Communication Solutions," soared 96% Y/Y.Operating margin improved by 720 basis points over the year, rising from 20.3% to 27.5%.Guidance for Q4 2025 projects 39–41% revenue growth and 62–65% EPS growth. Consensus Estimates were beaten for 12 consecutive quarters. Estimates Revisions have been systematically upward.Current relative valuation multiples may suggest overvaluation at first glance, but factoring in growth suggests the stock is in a fair value zone.Reverse valuation (residual earnings) requires a 23.6% earnings CAGR over the next 10 years to justify the current valuation. I expect an upside of 12%, based on an absolute valuation model assuming revenue growth of 18% CAGR and net margin of 21%. zhangxiaomin/iStock via Getty Images Thesis I rate Amphenol Corporation (NYSE:APH) as a Hold, as I expect a 12% upside over the next 12 months, based on an absolute valuation model. This valuation assumes revenues growing at an 18.4% CAGR in the next 10This article was written byEzequiel Szyrko117 FollowersFollowMy investing approaches are GARP, Value, and Growth. I closely follow insider buying and buybacks. Also, I pay attention to some technical analysis tools, such as Elliott Wave, EMA crossovers, and chart patterns.Analyst’s Disclosure:I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article. Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.Recommended For You