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AMETEK (AME) Margin Gains Reinforce Bullish Narrative Despite Slowing Earnings Growth

Simply Wall St · 10/30 23:32

AMETEK (AME) posted a net profit margin of 20.6%, up from last year’s 19.5%, reflecting a step up in profitability. Over the past five years, the company’s earnings have grown at an annual rate of 11.4%. Most recent annual growth was 7.9%, falling below the long-term average. While both earnings and revenue are expected to continue rising, AMETEK’s projected earnings growth of 8.2% per year and revenue growth of 7.1% per year trail the broader US market’s forecasts. The market currently prices the stock at $198.32, above its estimated fair value of $167.41. Solid profitability and a history of growth set the stage for a measured investor outlook this earnings season.

See our full analysis for AMETEK.

Now, let's see how these earnings results stack up against the widely followed narratives, highlighting where perceptions might shift or stay on course.

See what the community is saying about AMETEK

NYSE:AME Earnings & Revenue History as at Oct 2025
NYSE:AME Earnings & Revenue History as at Oct 2025

Margins Climb Past 20% as New Tech Drives Upgrades

  • AMETEK reported a net profit margin of 20.6%, up from last year's 19.5%, reflecting improved operating leverage as digital automation and recurring revenue streams take hold.
  • Analysts' consensus view is that AMETEK’s deeper investments in R&D and moves into high-margin digital automation and sustainability markets are fueling margin expansion, which
    • supports the recurring revenue growth and increased margins noted across key sectors, and
    • highlights new launches like SPECTROGREEN MS as evidence of ongoing innovation that helps widen net margins even amidst sector competition.

What stands out is how these margin gains support the consensus case that innovation will keep boosting profitability, but rising digital competition remains a hurdle. Discover how analysts grade this balance in the detailed Consensus Narrative. 📊 Read the full AMETEK Consensus Narrative.

Growth Momentum Eases but Outpaces Industry Risks

  • The company’s five-year earnings growth averages 11.4% per year, but the most recent annual increase was 7.9%, showing a slowdown. Still, both figures highlight AMETEK’s stable ability to grow even as market-wide expectations cool.
  • Analysts' consensus view flags that disciplined M&A and innovation keep recurring revenue high, yet
    • dependence on acquisitions brings integration risks that could drag future margin gains if not carefully managed, and
    • ongoing headwinds in analytical and process markets, such as slowed semiconductor and research spending, could limit organic growth even as record orders in Automation and EMG help to offset.

Valuation: Premium vs. Industry Yet Below Peers

  • AMETEK’s price-to-earnings ratio stands at 31.9x, topping the US electrical industry average of 29.4x but running below the peer group average of 44.5x. With a current share price of $198.32, it trades above its DCF fair value of $167.41 and just under the consensus analyst price target of $207.00.
  • Analysts' consensus view points out that AMETEK’s share price is very close to the consensus price target, which
    • implies analysts see it as fairly valued on balance, neither presenting a clear bargain nor a major overvaluation, and
    • signals that continued innovation and steady margin gains are already priced into expectations for the next several years.

Next Steps

To see how these results tie into long-term growth, risks, and valuation, check out the full range of community narratives for AMETEK on Simply Wall St. Add the company to your watchlist or portfolio so you'll be alerted when the story evolves.

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A great starting point for your AMETEK research is our analysis highlighting 2 key rewards and 1 important warning sign that could impact your investment decision.

See What Else Is Out There

Despite healthy profit margins and recurring revenue, AMETEK’s slower earnings growth and a premium valuation make continued outperformance less certain.

If you want to find stocks trading at more attractive prices with room for upside, use these 848 undervalued stocks based on cash flows to spotlight companies the market may be overlooking right now.

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.