Ametek
AME
$239.55
+0.20%
Ametek, Inc. is a global industrial technology company that designs and manufactures advanced analytical, test, and measurement instruments, as well as highly engineered electromechanical components, serving diverse end markets including aerospace, energy, medical, and research. With over 40 autonomous businesses, Ametek operates as a niche market leader, emphasizing product differentiation and technological leadership in each of its segments. The current investor narrative centers on the company's consistent growth through strategic acquisitions, its ability to expand margins despite supply chain challenges, and its positioning in high-growth areas like semiconductor and aerospace end markets. Recent attention has been driven by a 10% dividend increase announced in February 2026, signaling management confidence in cash flow generation and long-term growth prospects.…
AME
Ametek
$239.55
Related headlines
Investment Opinion: Should I buy AME Today?
Rating: Buy. Ametek's consistent revenue growth, expanding margins, and strong cash flow generation make it an attractive long-term investment. The analyst consensus is 'Buy' with an average target of $277.50, implying 15.8% upside from the current price of $239.55.
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AME 12-Month Price Forecast
The AI assessment is bullish on Ametek, driven by its consistent revenue growth, margin expansion, and strong cash flow generation. The stock's valuation is elevated but justified by expected EPS growth of ~20%. The main risks are a potential slowdown in industrial demand and the high valuation multiple. If the company continues to execute and growth remains above 10%, the stock is likely to appreciate toward the analyst average target. However, if growth decelerates or margins compress, the rating would be downgraded to neutral. The AI stance would be upgraded to 'high' confidence if the company delivers another quarter of double-digit revenue growth and maintains margins.
Wall Street consensus
Most Wall Street analysts maintain a constructive view on Ametek's 12-month outlook, with a consensus price target around $277.50 and implied upside of +15.8% versus the current price.
Average Target
$277.50
0 analysts
Implied Upside
+15.8%
vs. current price
Analyst Count
—
covering this stock
Price Range
$217 - $316
Analyst target range
The target price range spans from a low of $217.00 to a high of $316.00, indicating a wide dispersion of expectations. The high target of $316.00 assumes continued margin expansion, successful integration of acquisitions, and robust demand in aerospace and semiconductor markets, potentially justifying a higher multiple. The low target of $217.00 reflects concerns about potential economic slowdown, supply chain disruptions, or competitive pressures that could compress margins. Recent institutional ratings show a mix of actions, with Morgan Stanley maintaining Equal Weight, Truist Securities and DA Davidson reiterating Buy, and RBC Capital maintaining Outperform, suggesting a stable but not overly aggressive upgrade cycle. The wide spread between low and high targets highlights moderate uncertainty, but the overall bullish consensus and recent dividend increase signal management's confidence in future cash flows.
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Bulls vs Bears: AME Investment Factors
Ametek presents a balanced but slightly bullish case. The company's consistent revenue growth, margin expansion, and strong cash flow generation are compelling, supported by a 'Buy' consensus and an average target implying 15.8% upside. However, the elevated valuation (PEG 4.05x) and wide analyst target dispersion introduce meaningful risk. The core tension lies in whether Ametek can sustain its 11%+ revenue growth and margin expansion to justify its premium multiple. If growth decelerates or margins compress, the stock could face multiple compression, but if the company continues to execute on its acquisition strategy and end-market demand remains robust, the high target of $316 is achievable. Currently, the evidence slightly favors the bull case, given the strong fundamentals and positive analyst sentiment.
Bullish
- Strong Revenue Growth Momentum: Q1 2026 revenue grew 11.34% YoY to $1.93B, with consistent sequential growth from $1.78B in Q2 2025 to $2.00B in Q4 2025. This demonstrates robust demand across diversified end markets, particularly in aerospace and semiconductor sectors.
- Expanding Profitability and Margins: Operating margin improved to 26.7% in Q1 2026 from 26.2% in Q1 2025, while net margin held at 20.7%. The company's focus on niche leadership and operational efficiency is translating into sustained margin expansion.
- Analyst Consensus and Target Upside: With a 'Buy' rating from 18 analysts and an average target of $277.50, the stock offers 15.8% upside from the current price of $239.55. The high target of $316 implies 31.9% upside, reflecting confidence in continued growth.
- Strong Free Cash Flow Generation: TTM free cash flow stands at $1.70B, supporting a 10% dividend increase announced in February 2026. This signals management confidence in cash flow sustainability and shareholder returns.
Bearish
- Elevated Valuation Multiples: Trailing P/E of 31.98x and forward P/E of 26.62x are at a premium to the broader market. The PEG ratio of 4.05x suggests the stock is priced for above-average growth, leaving little room for disappointment.
- High Target Price Dispersion: Analyst targets range from $217 to $316, a 45.6% spread, indicating significant uncertainty about future performance. The low target implies a 9.4% downside from current levels.
- Recent Price Volatility and Drawdown: The stock experienced a max drawdown of -13.7% over the past year, and the recent 3-month price change of +6.69% masks a pullback from the 52-week high of $261.16. This volatility could deter risk-averse investors.
- Dependence on Acquisitions for Growth: Ametek's growth strategy relies heavily on acquisitions, which carry integration risks and can strain balance sheet. The debt-to-equity ratio of 0.22, while manageable, could increase if acquisition pace accelerates.
AME Technical Analysis
Ametek's stock has demonstrated a robust long-term uptrend, with a 1-year price change of +30.59%, significantly outperforming the S&P 500's +20.48% over the same period. The current price of $239.55 sits at approximately 91.7% of the 52-week range (between $179.24 low and $261.16 high), indicating the stock is trading near its highs, which reflects strong momentum but also potential overextension. The stock's beta of 0.997 suggests volatility in line with the broader market, making it a relatively stable large-cap industrial holding.
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
+30.6%
Cumulative gain past year
| Period | AME Return | S&P 500 |
|---|---|---|
| 1m | +1.0% | +3.6% |
| 3m | +6.7% | +2.7% |
| 6m | +2.6% | +11.4% |
| 1y | +30.6% | +18.7% |
| ytd | +14.5% | +12.3% |
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AME Fundamental Analysis
Ametek's revenue trajectory remains solid, with the most recent quarter (Q1 2026) reporting revenue of $1.93 billion, up 11.34% year-over-year. This growth is consistent with the prior quarters, as Q4 2025 revenue was $2.00 billion, Q3 2025 was $1.89 billion, and Q2 2025 was $1.78 billion, showing a steady upward trend. The Electronic Instruments Group (EIG) is the primary growth driver, contributing $1.26 billion in revenue (65.5% of total), while the Electromechanical Group (EMG) contributed $0.66 billion. The company's diversified end-market exposure and focus on niche leadership positions it well for continued organic growth, supplemented by strategic acquisitions.
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 Ametek's positive net income, the trailing P/E ratio of 31.98x is the primary valuation metric. The forward P/E of 26.62x implies the market expects earnings growth of approximately 20% over the next year, which is supported by the estimated EPS growth from $9.84 to $10.61. The PEG ratio of 4.05x suggests that the stock is trading at a premium to its growth rate, indicating that the market is pricing in above-average growth 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 balance sheet is moderately leveraged with a debt-to-equity ratio of 0.22, which is manageable but could increase if the company pursues larger acquisitions. The current ratio of 1.06 indicates tight liquidity, potentially limiting flexibility in a downturn. While free cash flow is strong at $1.70B TTM, the payout ratio of 19.3% suggests room for dividend growth, but any cash flow disruption could impact shareholder returns. Revenue concentration in the EIG segment (65.5% of total) exposes the company to cyclicality in electronics and aerospace markets, which could lead to earnings volatility if these sectors weaken.
FAQ
The key risks of holding AME include: 1) Valuation risk - the stock trades at a high P/E, making it vulnerable to multiple compression if growth slows. 2) Macro risk - with beta near 1.0, the stock is sensitive to market downturns and industrial cycles. 3) Acquisition risk - the company's growth strategy relies on acquisitions, which can fail to deliver expected synergies. 4) Competitive risk - niche markets could face increased competition, pressuring margins. The most severe risk is a prolonged economic slowdown that reduces demand for Ametek's products, potentially leading to a -25% decline to the 52-week low.
The 12-month forecast for AME is moderately bullish. The base case, with a 50% probability, expects the stock to reach $250-$277.50, driven by continued revenue growth of around 10-11%. The bull case, with a 30% probability, sees the stock reaching $277.50-$316 if growth accelerates and margins expand. The bear case, with a 20% probability, could see the stock fall to $217-$239.55 if growth decelerates or a market downturn occurs. The most likely scenario is the base case, assuming the company maintains its current growth trajectory and the broader economy remains stable.
AME is currently trading at a premium valuation, with a trailing P/E of 31.98x and a forward P/E of 26.62x. This is above the broader market average and the company's own historical average. The PEG ratio of 4.05x suggests the market is pricing in above-average growth expectations. Compared to peers in the industrial sector, AME commands a premium due to its consistent growth and high margins. The valuation implies that the market expects continued double-digit earnings growth. While not undervalued, the premium is justified if the company can deliver on its growth targets. Investors should watch for any signs of growth deceleration that could trigger a de-rating.
Yes, AME is a good stock to buy for investors with a long-term horizon and tolerance for moderate risk. The stock offers a 15.8% upside to the average analyst target of $277.50, supported by strong fundamentals including 11.34% revenue growth and a 26.7% operating margin. However, the valuation is not cheap, with a forward P/E of 26.62x, so investors should be prepared for potential volatility. The biggest downside risk is a deceleration in growth, which could lead to multiple compression. For those who believe in the company's growth strategy, it is a solid addition to a diversified portfolio.
AME is more suitable for long-term investment due to its consistent growth, strong cash flow, and dividend growth. The stock's beta of 0.997 indicates market-level volatility, making it less ideal for short-term trading. The company's focus on niche markets and acquisitions provides a runway for sustained growth over 5-10 years. A minimum holding period of 3-5 years is recommended to fully benefit from earnings growth and potential multiple expansion. Short-term traders may find opportunities in the stock's volatility, but the fundamental thesis is best realized over the long term.
