Ametek
AME
$241.97
+0.34%
Ametek is a diversified industrial conglomerate operating over 40 autonomous businesses across research, aerospace, energy, medical, and manufacturing, organized into its Electronic Instruments Group (EIG) and Electromechanical Group (EMG). The company differentiates itself through product differentiation and market leadership in niche industrial segments, leveraging a proven acquisition-driven growth model. Investor attention is currently focused on Ametek's consistent revenue growth, margin expansion, and strong free cash flow generation, supported by a recent 10% dividend increase that signals management confidence. The stock's 31.9% one-year gain reflects optimism around its resilient end-market exposure and disciplined capital allocation.…
AME
Ametek
$241.97
Related headlines
AME 12-Month Price Forecast
Wall Street consensus
Most Wall Street analysts maintain a constructive view on Ametek's 12-month outlook, with a consensus price target around $263.39 and implied upside of +8.8% versus the current price.
Average Target
$263.39
0 analysts
Implied Upside
+8.8%
vs. current price
Analyst Count
—
covering this stock
Price Range
$217 - $303
Analyst target range
Ametek is covered by 18 analysts, with a consensus recommendation of 'Buy' (mean rating 1.7 on a 1-5 scale). The average price target is $263.39, implying 11.1% upside from the current price of $237. The distribution leans bullish, with no sell ratings in the recent data. The target range spans from a low of $217 to a high of $303, a spread of $86 (39.6% of the current price), indicating moderate uncertainty. The high target of $303 assumes continued organic growth, successful acquisitions, and multiple expansion, while the low target of $217 prices in potential macro headwinds or margin compression. Recent ratings actions show stability: Morgan Stanley maintains Equal Weight, while Truist Securities and DA Davidson reiterate Buy, suggesting analysts see a balanced risk/reward with a positive bias.
Bulls vs Bears: AME Investment Factors
Ametek presents a classic quality-at-a-price debate. The bull case is anchored by accelerating revenue growth (11.3% YoY), expanding margins (operating margin 26.7%), robust free cash flow ($1.70B TTM), and a strong balance sheet (D/E 0.22). The bear case centers on valuation: a trailing P/E of 32.0x is a 45% premium to the industry and above its own 5-year average, with a high PEG of 4.05x. The stock is near its 52-week high, and short-term momentum has flattened. Currently, the bull case has stronger evidence given the fundamental momentum and analyst consensus, but the single most important tension is whether the company can sustain its growth trajectory to justify the premium valuation. If revenue growth decelerates or margins contract, the stock could re-rate lower.
Bullish
- Accelerating Revenue Growth: Q1 2026 revenue grew 11.3% YoY to $1.93B, accelerating from 3.0% in Q1 2025, driven by broad-based demand across EIG and EMG segments.
- Expanding Profit Margins: Gross margin improved to 37.2% from 36.1% a year ago, and operating margin expanded to 26.7% from 26.3%, reflecting operating leverage and cost discipline.
- Strong Free Cash Flow Generation: TTM free cash flow of $1.70B provides ample internal funding for acquisitions and dividends, with Q1 2026 FCF of $426M easily covering capex and dividends.
- Healthy Balance Sheet: Debt-to-equity is a low 0.22 and current ratio of 1.06 indicates adequate liquidity, supporting the acquisition-driven growth model.
Bearish
- Elevated Valuation Premium: Trailing P/E of 32.0x is a 45% premium to the industry average of 22.0x, and above the 5-year average of ~28x, leaving limited room for error.
- Potential Overextension Near Highs: At $237, the stock sits at 85.7% of its 52-week range and only 3.2% below the 52-week high of $244.71, suggesting limited near-term upside without a catalyst.
- Decelerating Short-Term Momentum: The 3-month price change is nearly flat at +0.3%, contrasting with the 1-year gain of +31.9%, indicating a consolidation phase or potential pullback.
- High PEG Ratio Suggests Overvaluation: PEG ratio of 4.05x implies the stock is expensive relative to its expected earnings growth rate, which may not justify the current multiple.
AME Technical Analysis
Ametek is in a sustained uptrend, with a 1-year price change of +31.9% and the current price of $237 sitting at 85.7% of its 52-week range ($175.61–$244.71). Trading near the upper end of the range suggests strong momentum but also potential overextension, as the stock is only 3.2% below its 52-week high. The beta of 0.99 indicates volatility roughly in line with the market, making the stock a relatively stable industrial holding. Short-term momentum shows divergence: the 1-month change of +2.5% is positive but decelerating compared to the 3-month change of +0.3%, which is nearly flat. This contrasts with the strong 1-year uptrend, suggesting a consolidation phase or temporary pullback rather than a trend reversal. The 6-month change of +9.9% confirms the longer-term bullish bias, but the recent flattening warrants caution. The 52-week low of $175.61 provides a key support level, while the 52-week high of $244.71 acts as resistance. A breakout above $244.71 would signal renewed upside momentum, while a breakdown below $175.61 would indicate a significant trend reversal. With a beta of 0.99, the stock's volatility is market-neutral, meaning it offers no inherent hedge or amplification relative to the S&P 500.
Beta
0.99
0.99x market volatility
Max Drawdown
-13.7%
Largest decline past year
52-Week Range
$176-$245
Price range past year
Annual Return
+34.6%
Cumulative gain past year
| Period | AME Return | S&P 500 |
|---|---|---|
| 1m | +2.8% | +0.8% |
| 3m | +3.9% | +3.5% |
| 6m | +9.6% | +7.2% |
| 1y | +34.6% | +16.5% |
| ytd | +15.7% | +8.4% |
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AME Fundamental Analysis
Ametek's revenue trajectory is solidly growing, with Q1 2026 revenue of $1,928.4 million up 11.3% year-over-year, accelerating from the 3.0% growth in Q1 2025. The Electronic Instruments Group contributed $1,264.5 million (65.6% of total) and the Electromechanical Group $663.9 million, indicating broad-based demand. The trailing twelve-month free cash flow of $1,703.1 million provides ample internal funding for acquisitions and dividends. Profitability is robust: net income for Q1 2026 was $399.4 million, with a net margin of 20.7%, up from 20.3% in Q1 2025. Gross margin improved to 37.2% from 36.1% a year ago, and operating margin expanded to 26.7% from 26.3%, reflecting operating leverage and cost discipline. The company is consistently profitable with expanding margins, a hallmark of quality industrials. The balance sheet is healthy: debt-to-equity is a low 0.22, and the current ratio of 1.06 indicates adequate liquidity. Free cash flow of $426.0 million in Q1 2026 easily covers capital expenditures of $25.5 million and dividends of $77.8 million, with ROE of 13.9% demonstrating efficient capital use. The strong cash generation supports the company's acquisition strategy and dividend growth.
Quarterly Revenue
$1.9B
2026-03
Revenue YoY Growth
+11.3%
YoY Comparison
Gross Margin
37.2%
Latest Quarter
Free Cash Flow
$1.7B
Last 12 Months
Revenue & Net Income Trends (2 Years)
Revenue Breakdown
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Valuation Analysis: Is AME Overvalued?
Since net income is positive, the primary valuation metric is the P/E ratio. The trailing P/E is 32.0x, while the forward P/E is 26.9x, implying the market expects earnings growth of about 19% over the next year. The gap between trailing and forward multiples suggests optimism about future earnings acceleration. Compared to the Electrical Equipment & Parts industry average P/E of 22.0x (estimated), Ametek trades at a 45% premium. This premium is justified by its superior profitability (net margin 20.7% vs. industry ~10%), consistent growth, and strong free cash flow generation. Historically, the current trailing P/E of 32.0x is above the 5-year average of ~28x, indicating the stock is trading at the higher end of its historical valuation band. This suggests the market is pricing in optimistic expectations for continued growth and margin expansion, leaving limited room for error.
PE
32.0x
Latest Quarter
vs. Historical
High-End
5-Year PE Range 25x~31x
vs. Industry Avg
N/A
Industry PE ~N/A*
EV/EBITDA
21.4x
Enterprise Value Multiple
Investment Risk Disclosure
Financial & Operational Risks: Ametek's debt-to-equity of 0.22 is low, but the company relies on acquisitions for growth, which carry integration risk. The net margin of 20.7% is high, but any margin compression from cost inflation or mix shift could pressure earnings. The payout ratio of 19.3% is conservative, but the dividend yield of 0.6% is low, offering limited income support. The stock's beta of 0.99 indicates market-like volatility, so it offers no downside protection in a downturn.
Market & Competitive Risks: The stock trades at a 45% premium to the industry average P/E, making it vulnerable to multiple compression if growth disappoints. The PEG ratio of 4.05x suggests the market is pricing in optimistic growth expectations. The analyst low target of $217 implies a -8.4% downside, reflecting macro risks such as industrial slowdown or trade tensions. The recent 10% dividend increase signals confidence, but if the macro environment weakens, revenue growth could decelerate from the current 11.3% pace.
Worst-Case Scenario: A severe industrial recession or failed integration of a large acquisition could cause revenue growth to stall and margins to contract. In such a scenario, the stock could fall to the 52-week low of $175.61, representing a -25.9% decline from the current price of $237. This aligns with the analyst low target of $217, but a deeper recession could push it lower. The historical max drawdown of -13.7% is much smaller, but a worst-case scenario could exceed that.