Amphenol Corporation (APH) shares have risen 7% over the past month, outperforming the Zacks Computer & Technology sector’s appreciation of 2.5%. This outperformance can be attributed to Amphenol’s diversified business model, which lowers the volatility of individual end markets and geographies. The company’s wide array of interconnect and sensor products boosts its long-term prospects.
The stock is currently trading above the 50-day and 200-day moving averages, indicating a bullish trend. Amphenol’s strong portfolio of solutions, including high-technology interconnect products, is a key catalyst for its growth. The company expects second-quarter 2025 sales to increase in the high-single-digit range sequentially, driven by strong demand for jetliners and next-gen aircraft in the commercial aerospace segment.
Acquisitions have helped APH strengthen its product offerings and expand its customer base. The buyouts contributed 8% to 2024 revenues. In May 2024, Amphenol completed the acquisition of CIT, which expanded its footprint across defense, commercial air, and industrial end markets. The acquisition of CommScope’s Andrew business expands APH’s footprint in base station antennas and related interconnect solutions, as well as distributed antenna systems. The Andrew acquisition is expected to add roughly 9 cents to earnings in 2025.
Amphenol offered positive second-quarter 2025 guidance, with earnings expected between 64 cents and 66 cents per share, indicating year-over-year growth between 45% and 50%. Sales are anticipated between $4.90 billion and $5 billion, suggesting year-over-year growth of 36-39%. The Zacks Consensus Estimate for second-quarter 2025 earnings is pegged at 66 cents per share, up 20% over the past 60 days and indicating 53.49% growth over the year-ago quarter’s reported figure.
However, Amphenol shares are overvalued, as suggested by a Value Score of D. APH stock is trading at a significant premium with a forward 12-month Price/Earnings (P/E) of 33.21X compared with the sector’s 26.06X. Despite this, Amphenol stock currently has a Zacks Rank #1 (Strong Buy) and a Growth Score of B, a favorable combination that offers a strong investment opportunity, per the Zacks Proprietary methodology.
In conclusion, Amphenol benefits from a diversified business model and a strong portfolio of solutions. These factors justify APH’s premium valuation. Investors looking for a strong investment opportunity can consider APH as a buy right now.
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