Ametek
AME
$239.69
+0.58%
Ametek, Inc. is a diversified industrial manufacturer that operates through two segments — the Electronic Instruments Group (EIG), which sells analytical, test, and measurement instruments, and the Electromechanical Group (EMG), which produces highly engineered components, interconnects, and specialty metals for markets spanning aerospace, energy, medical, and general manufacturing. Rather than competing as a single monolithic brand, Ametek functions as a decentralized holding company of more than 40 autonomous niche-market businesses, each pursuing product differentiation and market leadership in narrowly defined segments — a structure that has made it a long-standing compounder in the industrials sector. The current investor debate centers on whether Ametek's acquisition-driven growth model can sustain its recent acceleration, with Q3 2026 revenue up 17.3% year-over-year to $2.22 billion and management raising the quarterly dividend by 10% in February 2026, while bears point to a sharp post-earnings share-price pullback in early November and a valuation that embeds considerable optimism. Attention is also focused on the durability of margin expansion — gross margin has widened to 36.5% and operating margin to 26.3% — and on how aggressively Ametek is deploying capital into M&A, with roughly $424 million of acquisitions completed in Q3 alone.…
AME
Ametek
$239.69
Related headlines
Investment Opinion: Should I buy AME Today?
Rating: Buy (accumulate on weakness). Ametek is a high-quality industrial compounder whose Q3 2026 revenue grew 17.3% YoY to $2.22 billion while gross margin expanded to 36.5% and operating margin held at 26.3%, and the sell-side consensus of 14 Buy / 6 Hold / 0 Sell with a $287.44 average target implies roughly 25.7% upside from the $228.67 price. The core thesis is that the recent 6.3% single-day post-earnings drop and 9.85% three-month decline reflect multiple compression on a premium asset rather than any deterioration in the franchise, creating an entry point into a business that converts 19.2% net margin into $1.93 billion of trailing free cash flow.
Supporting evidence is broad: revenue has climbed about 28% over nine quarters from $1.73 billion in Q1 2025 to $2.22 billion, net income has risen every quarter from $351.8 million to $426.3 million, and the 26.3% operating margin has stayed inside a tight 25.8%–26.7% band for eight quarters. The balance sheet is a genuine differentiator with debt-to-equity of 0.22 and interest coverage near 14.7x ($584.9 million operating income against $39.8 million interest expense), funding both the 10% dividend raise and roughly $424 million of Q3 acquisitions. The valuation is the offsetting data point: 31.98x trailing PE, 23.78x forward PE, 6.39x PS and a PEG of 4.05 sit at a premium to the industrial-machinery cohort's high-teens to low-20s multiples, so the implied 25.7% upside is a bet on the $12.38 consensus 2027 EPS being delivered.
The biggest risks that could invalidate the thesis are a shortfall against the roughly 34% forward EPS growth embedded in the trailing-to-forward PE gap, margin compression from the 36.5% gross margin level as acquisitions are integrated, and a sector de-rating that pulls the multiple toward the low-20s and the $217 analyst low target. This Buy would downgrade to Hold if gross margin slipped below 35% or revenue growth decelerated below 10%, and would upgrade to a stronger conviction Buy if the stock retested the $217–$222 support zone while forward EPS estimates held at $12.38. Verdict: fairly valued to modestly rich versus history — the 31.98x PE sits in the upper quartile of the 21.8x–34.0x band since Q3 2022 — but reasonable on forward earnings, so the stock is a quality-at-a-fair-price accumulation rather than a deep-value opportunity.
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AME 12-Month Price Forecast
The forward view is constructive but valuation-dependent: Ametek's fundamentals are accelerating while the share price has de-rated 9.85% over three months and 8.02% over one month, lagging the S&P 500 by 3.03 points, which creates an attractive entry into a proven compounder. The base case (50% probability) assumes the $12.38 consensus 2027 EPS is broadly delivered and the stock recovers toward the $287.44 average target, while the 25% bull case requires multiple re-expansion toward the $325 high and the 25% bear case prices a de-rating to the $217 low target or the $188.47 52-week low. Confidence is medium rather than high because the 31.98x trailing PE sits in the upper quartile of the 21.8x–34.0x historical band and the PEG of 4.05 means the market is already paying for growth. I would upgrade to high confidence if Q4 results show revenue growth above 15% with gross margin holding above 36.5%, and I would downgrade to neutral if the stock broke below $222.99 or if forward EPS estimates slipped below $11.27.
Wall Street consensus
Most Wall Street analysts maintain a constructive view on Ametek's 12-month outlook, with a consensus price target around $287.44 and implied upside of +19.9% versus the current price.
Average Target
$287.44
20 analysts
Implied Upside
+19.9%
vs. current price
Analyst Count
20
covering this stock
Price Range
$217 - $325
Analyst target range
Coverage is solid, with 18 analysts publishing ratings and a distribution of 14 Buy, 6 Hold, and 0 Sell — a consensus recommendation of "buy" and a recommendation mean of 1.7 on a 1-to-5 scale where lower is more bullish. The average target price of $287.44 implies roughly 25.7% upside from the current $228.67, a gap that is unusually wide for a large-cap industrial and suggests the sell-side is looking through the recent post-earnings selloff. The bullish tilt is reinforced by the consensus 2027 EPS estimate of $12.38 (range $11.27–$12.82) and revenue estimate of $11.14 billion, both of which assume continued mid-teens top-line growth and stable margins. The target range runs from a low of $217.00 — about 5.1% below the current price — to a high of $325.00, roughly 42.1% above it, a spread of $108 that signals meaningful disagreement about the growth trajectory. The high target likely assumes multiple expansion back toward the mid-30s PE alongside accelerating EIG demand and successful M&A integration, while the low target of $217 prices in margin compression and a de-rating toward the low-20s multiple. Institutional ratings show a stable-to-constructive pattern: Mizuho, RBC Capital, and BNP Paribas maintain Outperform ratings, Truist, TD Cowen, and KeyBanc reiterate Buy/Overweight, and Citigroup and Baird remain Neutral — notably, there have been no downgrades in the recent tape, and the November 4 reiterations came directly after the Q3 print. The wide target spread, combined with the absence of Sell ratings, points to high conviction on the long-term compounding story but genuine uncertainty about near-term timing and valuation.
Bulls vs Bears: AME Investment Factors
The bull case currently carries stronger evidence: revenue is accelerating at 17.3% YoY, gross margin is expanding to 36.5%, free cash flow of $1.93 billion funds both a 10% dividend raise and bolt-on M&A, and 14 of 18 analysts rate Buy with a $287.44 average target implying 25.7% upside. The bear case rests less on fundamentals than on price and timing — a 31.98x trailing PE in the upper quartile of its historical range, a PEG of 4.05, and a 6.3% single-day post-earnings drop that has left the stock down 9.85% over three months and underperforming the S&P 500 by 3.03 points in the past month. The single most important tension is whether the market's embedded ~34% forward EPS growth assumption is delivered: if the $12.38 consensus materializes, the forward multiple of 23.78x looks reasonable and the selloff is an entry point; if growth decelerates, the multiple compresses toward the mid-20s and the low target of $217 becomes the reference. With a beta of 0.971 and mid-range positioning at roughly 55% of the 52-week band, this is a quality-compounder debate about valuation, not a solvency or franchise debate.
Bullish
- Revenue accelerating at 17.3% YoY: Q3 2026 revenue of $2.22 billion grew 17.31% year-over-year versus $1.89 billion in Q3 2025, and quarterly revenue has climbed roughly 28% from $1.73 billion in Q1 2025 to $2.22 billion now. This is compounding growth, not a one-off rebound, with EIG at $1.44 billion (about 65% of segment revenue) leading the mix.
- Margins expanding with pricing power: Gross margin widened to 36.5% in Q3 2026 from 35.95% in Q2 2026 and 36.25% in Q3 2025, while operating margin held at 26.35% within a tight 25.8%–26.7% band across eight quarters. Net margin of 19.2% and ROE of 13.93% are well above typical capital-goods profitability.
- Analyst consensus implies 25.7% upside: Of 18 analysts, 14 rate Buy and none rate Sell, with a recommendation mean of 1.7 and an average target of $287.44 versus the $228.67 price. The $325 high target implies 42.1% upside, and November 4 reiterations from Mizuho, RBC, Truist, TD Cowen and KeyBanc came directly after the Q3 print.
- Fortress balance sheet funds M&A: Debt-to-equity is just 0.22, interest coverage is roughly 14.7x ($584.9 million operating income against $39.8 million interest expense), and trailing free cash flow of $1.93 billion comfortably covers the $77.9 million quarterly dividend. That capacity supported roughly $424 million of acquisitions in Q3 alone.
Bearish
- Valuation sits in upper historical quartile: Trailing PE of 31.98x is near the top of the 21.8x–34.0x quarterly range since Q3 2022, and the 6.39x PS, 21.37x EV/EBITDA and 7.17x EV/Sales all carry a premium to the industrial-machinery cohort. A PEG of 4.05 shows investors are paying heavily for the growth on offer.
- Post-earnings selloff broke momentum: The stock fell 6.3% in a single session on November 5, from $237.09 to $222.99, and is down 8.02% over one month and 9.85% over three months. It lags the S&P 500 by 3.03 percentage points over the past month, underperforming even in a risk-off tape.
- Forward earnings bar is high: The gap between 31.98x trailing and 23.78x forward PE requires roughly 34% EPS growth to the $12.38 consensus, leaving little room for execution missteps. Any deceleration would likely compress the multiple toward the mid-20s.
- Thin liquidity cushion: A current ratio of 1.06 and quick ratio near 0.91 leave minimal working-capital buffer, and Q3 2026 saw a $4.61 billion debt repayment alongside $4.95 billion of investing outflows. This active balance-sheet restructuring bears watching for integration and funding risk.
AME Technical Analysis
Ametek is in a choppy, range-bound consolidation rather than a clean trend, with the stock up 15.93% over the past year but only 9.34% year-to-date, and the current price of $228.67 sits at roughly 55% of the 52-week range between a low of $188.47 and a high of $261.16. That mid-range positioning signals neither momentum-driven overextension nor a falling-knife setup — instead it reflects a market that has repeatedly failed to hold the upper $250s, having peaked at $261.16 in August before rolling over. The 52-week high remains about 14.2% above the current price, while the 52-week low is roughly 17.6% below, framing a wide but well-defined trading envelope. Recent momentum has deteriorated sharply: the stock is down 8.02% over the past month and 9.85% over three months, a clear deceleration from the positive 15.93% one-year return and a divergence that suggests the intermediate uptrend has stalled. The one-month decline also lags the S&P 500's -4.99% by 3.03 percentage points (relative strength of -3.03), indicating Ametek is underperforming in the recent risk-off tape rather than merely tracking it. The most recent session did show a 2.55% bounce off the $222.99 close, but that rebound follows a brutal 6.3% single-day drop from $237.09 to $222.99 on November 5 — a post-earnings reaction that leaves the short-term trend fragile. Key support sits at the 52-week low of $188.47, with an intermediate floor near the recent $222.99 low; resistance is anchored at the $261.16 high, with a secondary ceiling around $254–$258 where the stock repeatedly stalled in August and October. A breakout above $261 would signal renewed institutional accumulation and likely re-open the uptrend, while a breakdown below $222.99 would put the $188.47 low in play and confirm a medium-term downtrend. With a beta of 0.971, Ametek is marginally less volatile than the market — roughly 3% less — meaning position sizing can be somewhat more aggressive than for high-beta cyclicals, though the -13.74% max drawdown and 2.65 short ratio indicate the stock is not immune to sharp air pockets.
Beta
0.97
0.97x market volatility
Max Drawdown
-13.7%
Largest decline past year
52-Week Range
$188-$261
Price range past year
Annual Return
+21.3%
Cumulative gain past year
| Period | AME Return | S&P 500 |
|---|---|---|
| 1m | -4.1% | -2.4% |
| 3m | -6.5% | -2.3% |
| 6m | +5.2% | +2.8% |
| 1y | +21.3% | +11.3% |
| ytd | +14.6% | +11.4% |
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AME Fundamental Analysis
Ametek's revenue trajectory is clearly accelerating: Q3 2026 revenue of $2.22 billion grew 17.31% year-over-year versus $1.89 billion in Q3 2025, extending a sequential climb from $1.93 billion in Q1 and $2.04 billion in Q2 2026. The Electronic Instruments Group is the larger engine at $1.44 billion versus $778 million for the Electromechanical Group, meaning EIG carries roughly 65% of segment revenue and is the primary driver of the consolidated growth. The multi-quarter trend is unambiguously upward — quarterly revenue has risen from $1.73 billion in Q1 2025 to $2.22 billion in Q3 2026, a gain of about 28% over nine quarters — which supports the thesis that Ametek's mix of organic growth and bolt-on M&A is compounding rather than stalling. Profitability is robust and improving: Q3 2026 net income reached $426.3 million on a 19.2% net margin, with gross margin at 36.5% and operating margin at 26.35%, and the gross margin has expanded from 35.95% in Q2 2026 and 36.25% in Q3 2025. Net income has grown every quarter from $351.8 million in Q1 2025 to $426.3 million in Q3 2026, and the operating margin has held in a tight 25.8%–26.7% band across the last eight quarters — a hallmark of pricing power and cost discipline in niche industrial markets. The balance sheet is conservatively managed: debt-to-equity is just 0.22, the current ratio is 1.06, and trailing free cash flow is $1.93 billion, which comfortably funds the $77.9 million quarterly dividend and leaves ample capacity for acquisitions. Return on equity of 13.93% and return on assets of 7.06% are solid for a capital-goods manufacturer, and the interest coverage ratio of roughly 14.7x (Q3 2026 operating income of $584.9 million against $39.8 million of interest expense) underscores low financial risk. The one caveat is liquidity — a current ratio of 1.06 and quick ratio near 0.91 leave a thin working-capital cushion, and Q3 2026 saw a large $4.61 billion debt repayment alongside $4.95 billion of investing outflows, suggesting active balance-sheet restructuring that bears watching.
Quarterly Revenue
$2.2B
2026-09
Revenue YoY Growth
+17.3%
YoY Comparison
Gross Margin
36.5%
Latest Quarter
Free Cash Flow
$1.9B
Last 12 Months
Revenue & Net Income Trends (2 Years)
Revenue Breakdown
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Valuation Analysis: Is AME Overvalued?
Because Ametek is solidly profitable — Q3 2026 net income of $426.3 million and trailing EPS positive — the PE ratio is the appropriate primary metric, and the trailing PE of 31.98x against a forward PE of 23.78x implies the market expects earnings to grow roughly 34% over the next twelve months, consistent with the consensus EPS estimate of $12.38 versus the current run-rate. That trailing-to-forward gap is wide and signals that investors are paying today for tomorrow's earnings, leaving little room for execution missteps. On relative valuation, Ametek's 31.98x trailing PE and 6.39x PS sit at a premium to the broader industrial-machinery cohort, where high-teens to low-20s multiples are more typical; the 21.37x EV/EBITDA and 7.17x EV/Sales similarly reflect a quality premium rather than a deep-value entry point. The premium is partly justified by Ametek's 19.2% net margin, 26.3% operating margin, and 13.9% ROE — profitability well above the average capital-goods company — but a PEG ratio of 4.05 suggests the growth on offer is expensive relative to the multiple being paid. Historically, Ametek's quarterly PE has ranged from roughly 21.8x (Q3 2022) to 34.0x (Q2 2026), and the current 31.98x sits in the upper quartile of that band — closer to the top than the middle. The PS ratio of 6.39x is likewise elevated versus the 2022–2023 range of roughly 16.7x–23.7x on a quarterly basis, though the comparison is distorted by share-count and revenue-base changes; on a normalized basis the stock is clearly priced for continued double-digit growth. Near-historical-high multiples mean the market is embedding optimistic assumptions about margin durability and M&A accretion, and any deceleration would likely compress the multiple toward the mid-20s.
PE
32.0x
Latest Quarter
vs. Historical
High-End
5-Year PE Range 25x~33x
vs. Industry Avg
24.4x
Industry PE ~24.4x*
EV/EBITDA
21.4x
Enterprise Value Multiple
Investment Risk Disclosure
Financial and operational risks center on the premium multiple's dependence on continued growth and on balance-sheet activity. The 31.98x trailing PE versus 23.78x forward requires roughly 34% EPS growth to the $12.38 consensus, so a shortfall in any single quarter could compress the multiple sharply; the PEG of 4.05 quantifies how much optimism is embedded. Liquidity is thin, with a current ratio of 1.06 and quick ratio near 0.91, and Q3 2026 showed a $4.61 billion debt repayment alongside $4.95 billion of investing outflows, indicating active restructuring that could complicate integration. Revenue concentration adds risk: EIG at $1.44 billion carries about 65% of segment revenue, so a slowdown in analytical and test instrumentation demand would hit the consolidated growth engine disproportionately. Interest coverage of roughly 14.7x and debt-to-equity of 0.22 keep solvency risk low, but the $424 million of Q3 acquisitions must be integrated without diluting the 26.3% operating margin.
Market and competitive risks are dominated by valuation compression. At 6.39x PS, 21.37x EV/EBITDA and 7.17x EV/Sales, Ametek trades at a premium to the industrial-machinery cohort's high-teens to low-20s PE range, and the current 31.98x PE sits in the upper quartile of its 21.8x–34.0x historical band. With a beta of 0.971, the stock is only about 3% less volatile than the market, so it offers little defensive offset in a broad de-rating; indeed it fell 8.02% over the past month versus the S&P 500's -4.99%, a relative strength of -3.03. The recent tape reinforces this: a 6.3% single-day drop on November 5 despite no downgrades and post-earnings reiterations from Mizuho, RBC, Truist, TD Cowen and KeyBanc suggests the market is repricing the multiple rather than the business. Sector rotation away from premium-multiple industrials and any sign of margin compression in the 36.5% gross margin would amplify the move.
In a worst-case scenario, decelerating EIG demand combines with margin compression and a de-rating toward the low-20s multiple, pulling the stock toward the $217 analyst low target — about 5.1% below the current $228.67 — and potentially to the $188.47 52-week low, roughly 17.6% below the current price. A break below the recent $222.99 low would confirm a medium-term downtrend and put that $188.47 floor in play, consistent with the -13.74% max drawdown already experienced. In that chain of events, an investor could lose approximately 17.6% from the current price to the 52-week low, with the analyst low target of $217 representing a milder -5.1% downside. The 2.65 short ratio suggests short sellers are not yet positioned aggressively, meaning a negative catalyst could force a sharper, less cushioned move.
FAQ
Ranked by severity, the first risk is valuation compression: at 31.98x trailing PE in the upper quartile of its historical band and a PEG of 4.05, a de-rating toward the low-20s alone could take the stock to the $217 analyst low target, about 5.1% below the current $228.67. Second is earnings-delivery risk, since the 31.98x trailing versus 23.78x forward gap requires roughly 34% EPS growth to the $12.38 consensus, leaving little room for a miss. Third is margin and integration risk from the roughly $424 million of Q3 acquisitions, which must be absorbed without pushing gross margin below the current 36.5% and 35% threshold, compounded by thin liquidity with a current ratio of 1.06 and quick ratio near 0.91. Fourth is market and concentration risk: EIG carries about 65% of segment revenue at $1.44 billion, and with a beta of 0.971 the stock offers little defensive offset — it fell 8.02% over the past month versus the S&P 500's -4.99%, a relative strength of -3.03.
The 12-month forecast is anchored by three scenarios: a 50% base case of $240–$287 assuming the $12.38 consensus 2027 EPS is broadly delivered with mid-teens revenue growth and stable 26% operating margins; a 25% bull case of $287–$325 requiring multiple re-expansion toward the mid-30s PE and EIG demand acceleration; and a 25% bear case of $188–$217 pricing a de-rating toward the low-20s multiple and margin compression. The base case is most likely, with the stock grinding back toward the $287.44 average target and the $261.16 prior high as first resistance. The key assumption is that forward EPS estimates hold at $12.38 — if they slip below $11.27, the bear case gains probability, while Q4 revenue growth above 15% with gross margin above 36.5% would tilt toward the bull case.
AME screens as fairly valued to modestly rich: the 31.98x trailing PE sits in the upper quartile of its roughly 21.8x–34.0x quarterly range since Q3 2022, and the 6.39x PS, 21.37x EV/EBITDA and 7.17x EV/Sales all carry a premium to the industrial-machinery cohort's high-teens to low-20s multiples. The forward PE of 23.78x is more digestible and implies the market expects about 34% EPS growth to the $12.38 consensus, so the stock is priced for delivery rather than for surprise. A PEG of 4.05 confirms that the growth on offer is expensive relative to the multiple being paid, even though 19.2% net margin and 13.9% ROE justify some quality premium. The market is therefore paying a premium for durable compounding and M&A accretion, not a discount — any deceleration would likely compress the multiple toward the mid-20s and toward the $217 low target.
From a risk/reward standpoint, AME offers roughly 25.7% upside to the $287.44 average analyst target against about 5.1% downside to the $217 low target and 17.6% to the $188.47 52-week low, a favorable but not asymmetric setup given the 31.98x trailing PE. The fundamental case is supported by 17.3% YoY revenue growth to $2.22 billion, a 36.5% gross margin, 26.3% operating margin, and $1.93 billion of trailing free cash flow, plus 14 Buy versus 0 Sell ratings among 18 analysts. The main offset is valuation: a PEG of 4.05 and a forward PE of 23.78x that embeds roughly 34% EPS growth to the $12.38 consensus leaves little margin for error. It is a reasonable buy for patient investors with a multi-year horizon who can tolerate a 10%–18% drawdown, particularly on weakness toward the $217–$223 support zone; it is less attractive for traders needing near-term catalysts, given the stock is down 8.02% over one month and lagging the S&P 500 by 3.03 points.
AME is better suited to long-term holding than short-term trading: it is a mature, profitable compounder with 19.2% net margin, $1.93 billion of trailing free cash flow, and a 10% dividend raise in February 2026, but its 0.60% yield and 19.3% payout ratio mean income is a secondary consideration. Near-term earnings visibility is decent but not exceptional — operating margin has held in a tight 25.8%–26.7% band for eight quarters, yet the stock's -13.74% max drawdown, 2.65 short ratio, and 8.02% one-month decline show it is prone to sharp air pockets around earnings. With a beta of 0.971 it is only about 3% less volatile than the market, so it offers limited downside protection in a broad de-rating. A suggested minimum holding period of two to three years allows the $12.38 consensus 2027 EPS and further bolt-on M&A to compound through the current premium multiple; short-term traders should instead key off the $222.99 support and $261.16 resistance levels.