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AMETEK, Inc. (AME) Hits Fresh High: Is There Still Room to Run?
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Have you been paying attention to shares of Ametek (AME - Free Report) ? Shares have been on the move with the stock up 3.3% over the past month. The stock hit a new 52-week high of $151.54 in the previous session. Ametek has gained 8.2% since the start of the year compared to the 35.4% move for the Zacks Computer and Technology sector and the 4.5% return for the Zacks Electronics - Testing Equipment industry.
What's Driving the Outperformance?
The stock has an impressive record of positive earnings surprises, as it hasn't missed our earnings consensus estimate in any of the last four quarters. In its last earnings report on May 2, 2023, Ametek reported EPS of $1.49 versus consensus estimate of $1.41 while it beat the consensus revenue estimate by 4.48%.
For the current fiscal year, Ametek is expected to post earnings of $6.11 per share on $6.65 billion in revenues. This represents a 7.57% change in EPS on an 8.11% change in revenues. For the next fiscal year, the company is expected to earn $6.45 per share on $6.91 billion in revenues. This represents a year-over-year change of 5.55% and 3.95%, respectively.
Valuation Metrics
Ametek may be at a 52-week high right now, but what might the future hold for the stock? A key aspect of this question is taking a look at valuation metrics in order to determine if the company is due for a pullback from this level.
On this front, we can look at the Zacks Style Scores, as these give investors a variety of ways to comb through stocks (beyond looking at the Zacks Rank of a security). These styles are represented by grades running from A to F in the categories of Value, Growth, and Momentum, while there is a combined VGM Score as well. The idea behind the style scores is to help investors pick the most appropriate Zacks Rank stocks based on their individual investment style.
Ametek has a Value Score of C. The stock's Growth and Momentum Scores are B and A, respectively, giving the company a VGM Score of B.
In terms of its value breakdown, the stock currently trades at 24.7X current fiscal year EPS estimates, which is not in-line with the peer industry average of 24.7X. On a trailing cash flow basis, the stock currently trades at 21.3X versus its peer group's average of 20.7X. Additionally, the stock has a PEG ratio of 2.76. This isn't enough to put the company in the top echelon of all stocks we cover from a value perspective.
Zacks Rank
We also need to look at the Zacks Rank for the stock, as this supersedes any trend on the style score front. Fortunately, Ametek currently has a Zacks Rank of #2 (Buy) thanks to rising earnings estimates.
Since we recommend that investors select stocks carrying Zacks Rank of 1 (Strong Buy) or 2 (Buy) and Style Scores of A or B, it looks as if Ametek meets the list of requirements. Thus, it seems as though Ametek shares could still be poised for more gains ahead.
How Does AME Stack Up to the Competition?
Shares of AME have been soaring, and the company still appears to be a decent choice, but what about the rest of the industry? One industry peer that looks good is Itron, Inc. (ITRI - Free Report) . ITRI has a Zacks Rank of # 2 (Buy) and a Value Score of C, a Growth Score of C, and a Momentum Score of A.
Earnings were strong last quarter. Itron, Inc. beat our consensus estimate by 345.45%, and for the current fiscal year, ITRI is expected to post earnings of $1.47 per share on revenue of $2.03 billion.
Shares of Itron, Inc. have gained 8.6% over the past month, and currently trade at a forward P/E of 49.15X and a P/CF of 20.42X.
The Electronics - Testing Equipment industry is in the top 37% of all the industries we have in our universe, so it looks like there are some nice tailwinds for AME and ITRI, even beyond their own solid fundamental situation.
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AMETEK, Inc. (AME) Hits Fresh High: Is There Still Room to Run?
Have you been paying attention to shares of Ametek (AME - Free Report) ? Shares have been on the move with the stock up 3.3% over the past month. The stock hit a new 52-week high of $151.54 in the previous session. Ametek has gained 8.2% since the start of the year compared to the 35.4% move for the Zacks Computer and Technology sector and the 4.5% return for the Zacks Electronics - Testing Equipment industry.
What's Driving the Outperformance?
The stock has an impressive record of positive earnings surprises, as it hasn't missed our earnings consensus estimate in any of the last four quarters. In its last earnings report on May 2, 2023, Ametek reported EPS of $1.49 versus consensus estimate of $1.41 while it beat the consensus revenue estimate by 4.48%.
For the current fiscal year, Ametek is expected to post earnings of $6.11 per share on $6.65 billion in revenues. This represents a 7.57% change in EPS on an 8.11% change in revenues. For the next fiscal year, the company is expected to earn $6.45 per share on $6.91 billion in revenues. This represents a year-over-year change of 5.55% and 3.95%, respectively.
Valuation Metrics
Ametek may be at a 52-week high right now, but what might the future hold for the stock? A key aspect of this question is taking a look at valuation metrics in order to determine if the company is due for a pullback from this level.
On this front, we can look at the Zacks Style Scores, as these give investors a variety of ways to comb through stocks (beyond looking at the Zacks Rank of a security). These styles are represented by grades running from A to F in the categories of Value, Growth, and Momentum, while there is a combined VGM Score as well. The idea behind the style scores is to help investors pick the most appropriate Zacks Rank stocks based on their individual investment style.
Ametek has a Value Score of C. The stock's Growth and Momentum Scores are B and A, respectively, giving the company a VGM Score of B.
In terms of its value breakdown, the stock currently trades at 24.7X current fiscal year EPS estimates, which is not in-line with the peer industry average of 24.7X. On a trailing cash flow basis, the stock currently trades at 21.3X versus its peer group's average of 20.7X. Additionally, the stock has a PEG ratio of 2.76. This isn't enough to put the company in the top echelon of all stocks we cover from a value perspective.
Zacks Rank
We also need to look at the Zacks Rank for the stock, as this supersedes any trend on the style score front. Fortunately, Ametek currently has a Zacks Rank of #2 (Buy) thanks to rising earnings estimates.
Since we recommend that investors select stocks carrying Zacks Rank of 1 (Strong Buy) or 2 (Buy) and Style Scores of A or B, it looks as if Ametek meets the list of requirements. Thus, it seems as though Ametek shares could still be poised for more gains ahead.
How Does AME Stack Up to the Competition?
Shares of AME have been soaring, and the company still appears to be a decent choice, but what about the rest of the industry? One industry peer that looks good is Itron, Inc. (ITRI - Free Report) . ITRI has a Zacks Rank of # 2 (Buy) and a Value Score of C, a Growth Score of C, and a Momentum Score of A.
Earnings were strong last quarter. Itron, Inc. beat our consensus estimate by 345.45%, and for the current fiscal year, ITRI is expected to post earnings of $1.47 per share on revenue of $2.03 billion.
Shares of Itron, Inc. have gained 8.6% over the past month, and currently trade at a forward P/E of 49.15X and a P/CF of 20.42X.
The Electronics - Testing Equipment industry is in the top 37% of all the industries we have in our universe, so it looks like there are some nice tailwinds for AME and ITRI, even beyond their own solid fundamental situation.