Ametek
AME
$254.79
-0.56%
Ametek, Inc. is a diversified industrial company that designs and manufactures electronic instruments and electromechanical components for a wide range of industries, including aerospace, energy, medical, and research. The company operates through two primary segments: the Electronic Instruments Group (EIG) and the Electromechanical Group (EMG), with a portfolio of over 40 autonomous brands. Ametek is recognized as a niche market leader, emphasizing product differentiation and technological leadership in specialized applications. The current investor narrative centers on the company's robust growth trajectory, driven by strong demand in its end markets, successful acquisition strategy, and consistent margin expansion, as evidenced by recent quarterly results and a 10% dividend increase announced in February 2026.…
AME
Ametek
$254.79
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Investment Opinion: Should I buy AME Today?
Rating: Hold. Ametek is a high-quality company with accelerating growth and strong profitability, but the current valuation leaves limited upside to the average analyst target of $263.39 (4.8% upside). The consensus rating is 'Buy', but the risk-reward is balanced at current levels.
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AME 12-Month Price Forecast
Ametek is a high-quality company with strong growth and profitability, but the valuation is stretched, leaving limited upside. The stock is likely to perform in line with the market over the next 12 months, with a slight positive bias if growth continues. I would upgrade to bullish if the stock pulls back to a more reasonable valuation (PE < 28x) or if revenue growth accelerates above 15%. I would downgrade to bearish if growth decelerates below 8% or if margins contract.
Wall Street consensus
Most Wall Street analysts maintain a constructive view on Ametek's 12-month outlook, with a consensus price target around $277.22 and implied upside of +8.8% versus the current price.
Average Target
$277.22
0 analysts
Implied Upside
+8.8%
vs. current price
Analyst Count
—
covering this stock
Price Range
$217 - $316
Analyst target range
Ametek is covered by 18 analysts, with a consensus recommendation of 'Buy' (mean rating of 1.7, where 1 is Strong Buy and 5 is Sell). The average target price is $263.39, implying an upside of 4.8% from the current price of $251.38. The distribution is bullish, with 12 Buy ratings, 5 Hold ratings, and 1 Sell rating. The target price range is $217.00 (low) to $303.00 (high), with the high target implying a 20.5% upside and the low target implying a 13.7% downside. The wide spread of $86 suggests significant uncertainty about the company's future performance. Recent ratings actions have been predominantly positive, with firms like Truist Securities, DA Davidson, and RBC Capital maintaining or reiterating Buy/Outperform ratings, while Morgan Stanley and Barclays have maintained Equal Weight. This pattern indicates that analysts are generally confident in Ametek's growth prospects, but the wide target range highlights the potential for volatility in the stock.
Bulls vs Bears: AME Investment Factors
Ametek presents a compelling growth story with accelerating revenue, strong margins, and a solid balance sheet, but the stock is trading at a premium valuation that leaves little room for error. The bull case is supported by robust fundamentals and positive analyst sentiment, while the bear case highlights the risk of multiple compression and limited upside to price targets. Currently, the evidence slightly favors the bull case given the company's execution and market position, but the key tension is whether the premium valuation can be sustained as growth inevitably normalizes. If revenue growth continues to accelerate and margins expand, the stock could re-rate higher; if growth disappoints, the valuation could contract sharply.
Bullish
- Accelerating Revenue Growth: Q1 2026 revenue grew 11.3% YoY to $1.93B, up from 8.2% in Q4 2025 and 6.9% in Q3 2025, demonstrating accelerating momentum. This is driven by strong demand in aerospace, defense, and energy markets, plus successful acquisitions.
- Superior Profitability vs Peers: Net margin of 20.0% and operating margin of 26.2% in Q1 2026 significantly exceed the industry average net margin of 15.2%. This operational efficiency justifies a premium valuation and supports continued margin expansion.
- Strong Balance Sheet: Debt-to-equity ratio of 0.22 and current ratio of 1.06 indicate a conservative capital structure. The company generates robust free cash flow of $1.70B TTM, providing ample capacity for acquisitions and dividend growth.
- Positive Analyst Sentiment: Consensus rating is 'Buy' with a mean score of 1.7 (1=Strong Buy, 5=Sell). 12 of 18 analysts rate it Buy, and the average target price of $263.39 implies 4.8% upside. Recent actions from Truist, DA Davidson, and RBC have been positive.
Bearish
- Rich Valuation with Limited Upside: Trailing PE of 31.98x is a 42% premium to the industry average of 22.5x, and near the high end of its 5-year range (21.8x-33.4x). The average analyst target of $263.39 offers only 4.8% upside, suggesting limited near-term appreciation.
- High PEG Ratio Indicates Overvaluation: PEG ratio of 4.05 is elevated, implying that the market is pricing in growth that may not materialize. This suggests the stock is expensive relative to its expected earnings growth rate.
- Potential for Multiple Compression: If growth decelerates or macro conditions worsen, the premium valuation could compress. A reversion to the industry average PE of 22.5x would imply a price of around $177, a 30% downside from current levels.
- Concentration in Cyclical End Markets: A significant portion of revenue comes from aerospace, defense, and energy, which are cyclical and sensitive to government spending and oil prices. A downturn in these sectors could negatively impact demand.
AME Technical Analysis
Ametek's stock is in a sustained uptrend, with a 1-year price change of +35.5% and currently trading at $251.38, which is approximately 98% of its 52-week range (low of $179.24, high of $256.44). This positioning near the highs indicates strong momentum and investor confidence, though it also suggests the stock may be slightly overextended in the short term. The stock has outperformed the S&P 500 over the past year (35.5% vs. 21.5%), reflecting its relative strength.
Beta
1.00
1.00x market volatility
Max Drawdown
-13.7%
Largest decline past year
52-Week Range
$179-$261
Price range past year
Annual Return
+37.9%
Cumulative gain past year
| Period | AME Return | S&P 500 |
|---|---|---|
| 1m | +9.1% | +2.9% |
| 3m | +11.8% | +5.0% |
| 6m | +10.9% | +13.9% |
| 1y | +37.9% | +20.4% |
| ytd | +21.8% | +13.8% |
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AME Fundamental Analysis
Ametek's revenue growth is accelerating, with the most recent quarter (Q1 2026) showing revenue of $1,928.4 million, an 11.3% year-over-year increase, up from 8.2% growth in Q4 2025 and 6.9% in Q3 2025. The Electronic Instruments Group is the primary growth driver, contributing $1,264.5 million in revenue (65.6% of total), while the Electromechanical Group contributed $663.9 million. This accelerating growth is supported by strong demand in aerospace, defense, and energy markets, and the company's acquisition strategy is adding to organic 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?
Given that Ametek is profitable (net income of $399.4 million in Q1 2026), the PE ratio is the most appropriate valuation metric. The trailing PE is 31.98x, while the forward PE is 27.98x, indicating that the market expects earnings growth of approximately 14% over the next year. The gap between trailing and forward PE reflects optimism about continued margin expansion and revenue growth. Ametek's PE of 31.98x is at a premium to the industry average of 22.5x (based on available data), representing a 42% premium. This premium is justified by Ametek's superior profitability (net margin of 20.0% vs. industry average of 15.2%) and consistent growth, but it also leaves little room for error. Historically, Ametek's PE has ranged from 21.8x to 33.4x over the past five years, and the current 31.98x is near the upper end of that range, suggesting the market is pricing in optimistic expectations.
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 ratio of 0.22 is low, but the company carries significant debt to fund acquisitions, with interest expense of $20.9M in Q1 2026. The current ratio of 1.06 indicates tight liquidity, which could be strained if cash flows weaken. The company's reliance on acquisitions for growth introduces integration risk, and any misstep could impair profitability. Additionally, the payout ratio of 19.3% is conservative, but a sudden dividend cut would signal distress.
FAQ
The key risks of holding AME include: (1) Valuation risk - the stock trades at a 42% premium to the industry average PE, and any disappointment in growth could lead to multiple compression. (2) Cyclicality - significant exposure to aerospace, defense, and energy markets, which are cyclical and sensitive to government spending and oil prices. (3) Acquisition risk - the company's growth strategy relies on acquisitions, which carry integration and execution risks. (4) Macro risk - with a beta of 0.997, the stock is highly correlated with the market, so a broad market downturn would likely impact AME. The most severe risk is a combination of these factors leading to a decline to the 52-week low of $179.24, a -28.7% downside.
Based on analyst targets and scenario analysis, the 12-month forecast for AME is as follows: Bull case (25% probability) - price target of $280-$303, driven by accelerating growth and multiple expansion. Base case (50% probability) - price target of $250-$270, with the stock trading around the analyst average of $263.39. Bear case (25% probability) - price target of $200-$220, if growth decelerates or margins compress. The most likely scenario is the base case, with the stock delivering modest returns in line with earnings growth. The key assumption is that revenue growth remains around 10% and margins stay stable.
Ametek is currently overvalued relative to its industry peers, trading at a trailing PE of 31.98x versus the industry average of 22.5x, a 42% premium. The forward PE of 27.98x suggests the market expects strong earnings growth of about 14% over the next year. Historically, the stock's PE has ranged from 21.8x to 33.4x, and the current level is near the upper end, indicating that the market is pricing in optimistic expectations. The PEG ratio of 4.05 also suggests overvaluation relative to growth. However, the premium is justified by Ametek's superior profitability (net margin of 20.0% vs. 15.2% industry average) and consistent growth. Overall, the stock is fairly valued to slightly overvalued, with limited margin of safety.
Ametek is a good stock to buy for long-term investors seeking a high-quality industrial company with consistent growth and strong profitability. However, at the current price of $251.38, the stock is trading at a premium valuation (PE of 31.98x) with limited upside to the average analyst target of $263.39 (4.8%). The biggest risk is multiple compression if growth decelerates. For investors with a long-term horizon, the stock could be a good buy on any pullback to the $230 level, but for short-term traders, the risk-reward is less attractive.
Ametek is more suitable for long-term investment due to its consistent growth, strong profitability, and disciplined capital allocation. The stock has a beta of 0.997, indicating market-level volatility, and a dividend yield of 0.60%, which is low but growing. The company's earnings visibility is good, with a diversified portfolio and a strong acquisition pipeline. For short-term traders, the stock may offer opportunities around earnings announcements, but the limited upside to analyst targets suggests that long-term holding is more appropriate. A suggested minimum holding period is 3-5 years to allow the growth story to play out and to ride out any valuation fluctuations.