AMPHENOL CORP /DE/ (APH) Stock Analysis

AMPHENOL CORP /DE/ (APH) Stock Analysis

Overall Grade: F (Concerning)

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AMPHENOL CORP /DE/ faces challenges in financial performance that warrant careful analysis.

Key Metrics:

Metric Value Context
ROIC 27.8% Above industry average
FCF Margin 17.0% Strong cash generation
Debt/Equity 0.6x Moderate leverage

Investment Thesis: Strong return on invested capital of 27.8% suggests durable competitive advantages and efficient capital allocation.


What is AMPHENOL CORP /DE/'s Profitability and ROIC?

AMPHENOL CORP /DE/ generates strong returns on invested capital at 27.8%, indicating efficient capital allocation and competitive advantages. Gross margin of 35.9% with operating margin at 24.3% reflects the company's moderate market position.

Key Metrics

Metric Value Rating Interpretation
Return on Invested Capital (ROIC) 27.8% Excellent Strong capital efficiency
Return on Equity (ROE) 35.9% Excellent Efficient use of shareholder equity
Gross Margin 35.9% Good Competitive pricing environment
Operating Margin 24.3% Excellent Efficient operations

How Strong is AMPHENOL CORP /DE/'s Cash Flow Quality?

AMPHENOL CORP /DE/ generated $3.6B in free cash flow over the trailing twelve months, representing a 17.0% margin. Cash earnings quality is strong, with operating cash flow exceeding net income by 1.2x.

Key Metrics

Metric Value Rating Interpretation
Free Cash Flow Margin 17.0% Good Excellent cash conversion
Free Cash Flow (TTM) $3.6B Good Positive cash generation
OCF/Net Income 1.2x Excellent High earnings quality
FCF Consistency (8Q) N/A Warning Variable cash flow

What is AMPHENOL CORP /DE/'s Financial Health?

AMPHENOL CORP /DE/'s debt-to-equity ratio of 0.6x indicates conservative leverage.

Key Metrics

Metric Value Rating Interpretation
Debt to Equity 0.6x Good Moderate leverage
Net Cash Position $-3.2B Warning Net debt position

Is AMPHENOL CORP /DE/ Stock Overvalued or Undervalued?

AMPHENOL CORP /DE/ trades at a P/E of 39.4x, representing a premium to the sector median of N/A. Free cash flow yield of 2.4% reflects market expectations for growth.

Key Metrics

Metric Value Rating Interpretation
P/E Ratio 39.4x Adequate Premium valuation
EV/Sales 1.2x Excellent Attractive revenue multiple
FCF Yield 2.4% Adequate Lower cash yield
Dividend Yield 0.5% Adequate Growth focus over income

Sector Rankings

Metric Value Percentile vs Median
Return on Invested Capital (ROIC) 27.8% Top 25% 2.7x above
Free Cash Flow Margin 17.0% Top 50% 1.2x above
Gross Margin 35.9% Bottom 25% 0.6x below
Operating Margin 24.3% Top 25% 2.4x above
Return on Equity (ROE) 35.9% Top 25% 3.9x above
P/E Ratio 39.4x N/A -

Rating Thresholds

Return on Invested Capital (ROIC)

Measures how efficiently a company uses its debt and equity capital to generate profits. ROIC above 15% typically indicates a competitive moat.

Rating Range Interpretation
Excellent > 20% Exceptional capital efficiency, strong competitive moat
Good 12% - 20% Above-average returns, sustainable competitive position
Adequate 8% - 12% Around cost of capital, moderate competitive position
Warning 4% - 8% Below cost of capital, value may be eroding
Red flag < 4% Significant capital destruction, fundamental issues

Current: 27.8% (Excellent - Top 25% of sector (median: 10.4%))

Free Cash Flow Margin

The percentage of revenue converted to free cash flow. Higher margins indicate stronger cash generation and business quality.

Rating Range Interpretation
Excellent > 20% Strong cash generation, high-quality business
Good 10% - 20% Healthy cash conversion
Adequate 5% - 10% Moderate cash generation
Warning 0% - 5% Thin cash margins, capital intensive
Red flag < 0% Cash burn, potential liquidity concerns

Current: 17.0% (Good - Top 50% of sector (median: 14.5%))

Gross Margin

Revenue minus cost of goods sold as a percentage. Higher gross margins indicate pricing power and competitive advantage.

Rating Range Interpretation
Excellent > 50% Strong pricing power and competitive moat
Good 30% - 50% Healthy margins, differentiated product
Adequate 20% - 30% Moderate margins, competitive industry
Warning 10% - 20% Thin margins, commodity-like business
Red flag < 10% Very thin margins, structural challenges

Current: 35.9% (Good - Bottom 25% of sector (median: 59.4%))

Debt to Equity Ratio

Total debt divided by shareholders' equity. Lower ratios indicate more conservative financing and reduced financial risk.

Rating Range Interpretation
Excellent < 0.3x Conservative leverage, strong balance sheet
Good 0.3x - 0.7x Moderate leverage, healthy financial position
Adequate 0.7x - 1.5x Elevated leverage, monitor closely
Warning 1.5x - 3.0x High leverage, increased financial risk
Red flag > 3.0x Excessive leverage, potential distress risk

Current: 56.9% (Good)

P/E Ratio (Price-to-Earnings)

Stock price divided by earnings per share. Lower P/E may indicate undervaluation, while higher P/E suggests growth expectations.

Rating Range Interpretation
Excellent < 15x Attractively valued, potential opportunity
Good 15x - 25x Fair value for quality company
Adequate 25x - 35x Growth premium, justify with earnings growth
Warning 35x - 50x High expectations priced in
Red flag > 50x or negative Speculative valuation or losses

Current: 39.4x (Adequate)

Free Cash Flow Yield

Free cash flow per share divided by stock price. Higher FCF yield indicates better cash return relative to valuation.

Rating Range Interpretation
Excellent > 8% High cash return, potential value opportunity
Good 5% - 8% Solid cash yield
Adequate 3% - 5% Moderate cash return
Warning 1% - 3% Low cash yield, growth expectations
Red flag < 1% Minimal cash return to shareholders

Current: 2.4% (Warning)


Frequently Asked Questions

Q: What is AMPHENOL CORP /DE/'s Return on Invested Capital (ROIC)?

AMPHENOL CORP /DE/ (APH) has a trailing twelve-month Return on Invested Capital (ROIC) of 27.8%. This compares above the sector median of 10.4%. An ROIC above 20% indicates exceptional capital efficiency and strong competitive advantages.

Q: What is AMPHENOL CORP /DE/'s Free Cash Flow Margin?

AMPHENOL CORP /DE/ (APH) has a free cash flow margin of 17.0%, generating $3.6 billion in free cash flow over the trailing twelve months. A FCF margin between 10-20% represents healthy cash generation for most industries.

Q: Is AMPHENOL CORP /DE/ stock overvalued or undervalued?

AMPHENOL CORP /DE/ (APH) trades at a P/E ratio of 39.4x, which is above the sector median of N/A. The EV/Sales multiple is 1.2x. Free cash flow yield is 2.4%, reflecting growth expectations priced into the stock.

Q: Does AMPHENOL CORP /DE/ pay a dividend?

AMPHENOL CORP /DE/ (APH) currently pays a dividend yield of 0.5%. Including share buybacks, the total shareholder yield is 1.0%. The relatively low yield suggests the company prioritizes growth reinvestment over income distribution.

Q: How much debt does AMPHENOL CORP /DE/ have?

AMPHENOL CORP /DE/ (APH) has a debt-to-equity ratio of 0.6x with total debt of $7.1 billion. Net debt position is $3.2 billion.

Q: What is AMPHENOL CORP /DE/'s revenue and earnings growth?

AMPHENOL CORP /DE/ (APH) grew revenue by 47.4% year-over-year. Earnings per share increased by 72.4% compared to the prior year. Double-digit revenue growth indicates strong demand and market share gains.

Q: Is AMPHENOL CORP /DE/ buying back stock?

AMPHENOL CORP /DE/ (APH) repurchased $662.8 million of stock over the trailing twelve months. This represents a buyback yield of 0.4%.

Q: How does AMPHENOL CORP /DE/ compare to competitors in Technology?

Compared to other companies in Technology, AMPHENOL CORP /DE/ (APH) shows: ROIC of 27.8% is above the sector median of 10.4% (Top 25%). FCF margin of 17.0% exceeds the sector median of 14.5% (Top 44% of sector). Gross margin at 35.9% is 23.4 percentage points lower than sector peers. These rankings are based on MetricDuck's analysis of all Technology companies with available SEC filings.

Q: What warning signs should I watch for with AMPHENOL CORP /DE/?

AMPHENOL CORP /DE/ (APH) shows no major financial warning signs based on current metrics. However, investors should always monitor: 1) Margin compression trends, 2) Cash flow consistency, 3) Debt levels relative to cash generation, and 4) Changes in competitive positioning.


Data Source: Data sourced from 10-Q filed 2025-10-24. TTM metrics as of Q3 2025.

Methodology: Financial metrics calculated from SEC 10-K and 10-Q filings using standardized formulas. Sector comparisons use peer group based on SIC code.

This analysis is for informational purposes only and does not constitute investment advice.