- If you are wondering whether AMETEK at around US$215 per share looks expensive or offers value, it is helpful to separate price action from underlying worth.
- The stock has seen mixed moves recently, with a 1.2% gain over the last 7 days, a 7.0% decline over 30 days, and returns of 3.0% year to date, 22.5% over the past year, 54.4% over 3 years, and 74.2% over 5 years.
- These moves come alongside a steady stream of company updates and industry commentary that keep AMETEK on many investors' watchlists. For long term holders and new investors alike, this backdrop makes understanding what you are paying for the business more important than tracking short term headlines.
- Right now AMETEK scores just 1 out of 6 on a set of valuation checks. The next sections will walk through different valuation approaches, then conclude with a framework that can help you think about value in a more complete way.
AMETEK scores just 1/6 on our valuation checks. See what other red flags we found in the full valuation breakdown.
Approach 1: AMETEK Discounted Cash Flow (DCF) Analysis
A Discounted Cash Flow, or DCF, model estimates what a business could be worth by projecting its future cash flows and discounting them back to today’s dollars. It is essentially asking what the stream of future cash that AMETEK might generate is worth right now.
For AMETEK, the model uses a 2 Stage Free Cash Flow to Equity approach, starting from last twelve months free cash flow of about $1.66b. Analysts supply explicit forecasts for several years, and beyond that, Simply Wall St extrapolates cash flows out to 2035. For example, projected free cash flow in 2028 is $2.21b, with discounted values for the 2026 to 2035 period ranging from about $1.70b down to $1.23b.
Pulling these projections together, the DCF model arrives at an estimated intrinsic value of about $157.85 per share. Compared with the current share price of roughly $215, this implies the stock is around 36.4% above the model’s estimate of fair value, which indicates AMETEK is trading at a premium on this measure.
Result: OVERVALUED
Our Discounted Cash Flow (DCF) analysis suggests AMETEK may be overvalued by 36.4%. Discover 55 high quality undervalued stocks or create your own screener to find better value opportunities.
Approach 2: AMETEK Price vs Earnings (P/E)
P/E is a common way to value profitable companies because it links what you pay per share to the earnings that each share produces. In general, higher growth expectations and lower perceived risk can justify a higher P/E, while slower expected growth or higher risk usually point to a lower, more cautious range.
AMETEK currently trades on a P/E of 33.32x. That sits slightly above the Electrical industry average of about 32.66x, and below the broader peer group average of 45.58x. Simply Wall St also provides a proprietary “Fair Ratio” of 32.34x, which reflects the P/E that might be expected given AMETEK’s earnings growth profile, industry, profit margins, market cap and company specific risks.
This Fair Ratio aims to be more tailored than a simple comparison with industry or peers because it factors in company characteristics rather than assuming all Electrical stocks deserve the same multiple. Comparing AMETEK’s current P/E of 33.32x with the Fair Ratio of 32.34x suggests the shares trade moderately above that modelled level, indicating the stock looks slightly expensive on this metric.
Result: OVERVALUED
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Upgrade Your Decision Making: Choose your AMETEK Narrative
Earlier the article mentioned that there is an even better way to understand valuation. Narratives on Simply Wall St let you attach a clear story about AMETEK to the numbers by linking your view on its markets, margins and growth to a financial forecast. This turns those assumptions into a fair value that you can compare with the current share price to decide whether the stock looks attractively or fully priced. Narratives on the Community page are updated when new news, guidance or earnings arrive, so you can see in real time how different investors’ fair values shift. For example, one Narrative might assume AMETEK’s AI hardware exposure and rising cash returns justify a fair value near the bullish US$274 analyst target, while a more cautious Narrative might sit closer to the lower US$208 target. This gives you a simple, visual way to choose the AMETEK story that best matches your own expectations.
Do you think there's more to the story for AMETEK? Head over to our Community to see what others are saying!
This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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