AMETEK Inc (AME, Financial) has recently been in the spotlight, drawing interest from investors and financial analysts due to its robust financial stance. With shares currently priced at $180.82, AMETEK Inc has witnessed a daily gain of 0.61%, marked against a three-month change of 11.04%. A thorough analysis, underlined by the GF Score, suggests that AMETEK Inc is well-positioned for substantial growth in the near future.
What Is the GF Score?
The GF Score is a stock performance ranking system developed by GuruFocus using five aspects of valuation, which has been found to be closely correlated to the long-term performances of stocks by backtesting from 2006 to 2021. The stocks with a higher GF Score generally generate higher returns than those with a lower GF Score. Therefore, when picking stocks, investors should invest in companies with high GF Scores. The GF Score ranges from 0 to 100, with 100 as the highest rank.
- Financial strength rank: 7/10
- Profitability rank: 9/10
- Growth rank: 10/10
- GF Value rank: 5/10
- Momentum rank: 10/10
Each one of these components is ranked and the ranks also have positive correlation with the long term performances of stocks. The GF score is calculated using the five key aspects of analysis. Through backtesting, we know that each of these key aspects has a different impact on the stock price performance. Thus, they are weighted differently when calculating the total score. With high ranks in financial strength, profitability, and growth, but a moderate GF Value rank, GuruFocus assigned AMETEK Inc the GF Score of 95 out of 100, which signals the highest outperformance potential.
Understanding AMETEK Inc Business
AMETEK Inc is a diversified industrial conglomerate with over $6 billion in sales. The firm operates through an electronic instruments group (EIG) and an electromechanical group (EMG). EIG designs and manufactures advanced instruments for various end markets, contributing significantly to revenue. EMG offers highly engineered automation solutions, thermal management systems, specialty metals, and electrical interconnects, among other products. The majority of AMETEK Inc's sales are made in the United States. The company's asset-light strategy emphasizes growth through acquisitions, R&D, operational efficiencies, and market expansion. With a market cap of $41.81 billion and sales of $6.60 billion, AMETEK Inc's operating margin stands at 25.88%, reflecting its efficiency and profitability.
Financial Strength Breakdown
AMETEK Inc's Financial Strength rating indicates a resilient balance sheet, capable of withstanding financial headwinds. The company's Interest Coverage ratio of 20.87 showcases its ability to comfortably meet interest obligations. An Altman Z-Score of 5.69 further emphasizes AMETEK Inc's defense against financial distress. The strategic Debt-to-Revenue ratio of 0.51 underlines the company's prudent debt management.
Profitability Rank Breakdown
AMETEK Inc's Profitability Rank is a testament to its efficiency in generating profits. The company's Operating Margin has consistently increased over the past five years, reaching 25.88% in 2023. This upward trend is mirrored in the Gross Margin, which has grown to 36.14% in 2023. AMETEK Inc's financial health is further validated by a strong Piotroski F-Score and a Predictability Rank of 5 stars, indicating reliable operational performance.
Growth Rank Breakdown
AMETEK Inc's high Growth Rank reflects its commitment to business expansion. The company's 3-Year Revenue Growth Rate of 13.2% surpasses 66.31% of its industry peers. AMETEK Inc's EBITDA has also shown significant growth, with a three-year growth rate of 12.4 and a five-year rate of 9.8, highlighting its growth capabilities.
Next Steps
Considering AMETEK Inc's financial strength, profitability, and growth metrics, the GF Score highlights the firm's unparalleled position for potential outperformance. Investors seeking similar opportunities can explore more companies with strong GF Scores using the GF Score Screen. With AMETEK Inc's solid foundation and upward trajectory, the question remains: how will the company leverage its strengths to continue its path of market leadership?
This article, generated by GuruFocus, is designed to provide general insights and is not tailored financial advice. Our commentary is rooted in historical data and analyst projections, utilizing an impartial methodology, and is not intended to serve as specific investment guidance. It does not formulate a recommendation to purchase or divest any stock and does not consider individual investment objectives or financial circumstances. Our objective is to deliver long-term, fundamental data-driven analysis. Be aware that our analysis might not incorporate the most recent, price-sensitive company announcements or qualitative information. GuruFocus holds no position in the stocks mentioned herein.
