AMETEK, Inc. (AME): what the price assumes

In the published model solve dated 2026-Q2, anchored at $236.25, AMETEK, Inc. (AME) is priced for +24.8% growth. boothcheck publishes no house fair value, target price, or buy/sell rating; individual model outputs and user-controlled scenarios are analytical inputs, not Boothcheck targets. Narrative composed 2026-07-25.

Generated: 2026-08-30 · Source: https://boothcheck.com/report/AME

Headline

What The Price Assumes (Inversion)

The assumption today's price embeds, recovered by inverting the valuation.

The operating-margin figure is value-band context at year 12: derived from the framework's value band, a separate calculation — not part of the priced-in solve.

Solve inputs: computed at a 8.8% cost of capital with 4% terminal growth over a 5-year stage.

How unusual the bet is: within-range (limited comparison data)

Valuation X-Ray

Asset, earnings-power and peer-multiple models all land far below the price; ONLY the growth-DCF reaches it. The bet is durable compounding the static frames structurally cannot price (a moat/durability premium).

How the valuation models price the stock relative to the market price. Price/FV above 1.0 means the market pays more than that lens defends (expensive); at or below 1.0 the lens can defend the price.

Families that justify the price: Growth Families that call it expensive: Asset, Earnings, Relative

The models below discount at their own flat-beta convention rates (cost of equity 9.3%, WACC 8.9%); the inversion above states its own rate.

Per-Model Detail (n=15)

Economic-Unit Decomposition (Sum Of The Parts)

One or more material disclosed units has unresolved economics. Unknown/general is not evidence of homogeneity: segment SOTP is primary but incomplete, consolidated cash flow may remain only a secondary cross-check when every unit shares an enterprise basis, and one sector multiple or target margin is withheld.

No total common-equity value is stated. One or more material units lack a supported unit value. The displayed values are an indicative subtotal; consolidated debt and cash cannot be applied to a fraction of the company.

Solvency

Bullet Takeaways

• AMETEK converts about 26.2% of roughly $7.6 billion of revenue into operating profit, a share only one company in its instruments cohort beats, and it does so across three quite different lines: process and analytical instruments at about 47% of revenue, aerospace and power at about 30%, and automation and engineered solutions at about 24%.
• The risk is the price rather than the business: at about 31 times operating profit, the shares need today's economics repeated for roughly five and a half years, and only about 28% of comparable fast growers held that pace over a run that long.
• Second-quarter results are due before the market opens on August 4, 2026, with full-year sales guided up high single digits against 2025.

Bull Case

Start with the objection, because it is the honest place to start. A company that has completed "15 acquisitions" since the beginning of 2021 is buying a meaningful part of its own growth, and serial acquirers are where accounting flatters and cash does not. The reasonable fear is that the compounding is bought rather than earned. What the data shows is a company that keeps what it buys.

The margin is the evidence. AMETEK turns about 26.2% of revenue into operating profit. In its own instruments cohort, Roper (ROP) is the only comparison that runs higher, at 28.1%; Teledyne (TDY) manages 19.0%, Keysight (KEYS) 18.2%, Fortive (FTV) 17.6%, MKS (MKSI) 13.9% and Sensata (ST) 6.9%. In the electromechanical cohort, Amphenol (APH) reaches 25.8%, Parker-Hannifin (PH) 22.8% and Hubbell (HUBB) 20.6%, with Rockwell (ROK) at 11.0%. A roll-up that dilutes itself does not sit near the top of two different peer groups at once. And the filing is candid about the drag while it happens: 2025 segment margins were reduced by 60 basis points from the dilutive effect of recent deals and another 30 from integration costs, which is what absorbing an acquisition looks like before the improvement arrives.

What management is actually running is stated plainly. The goal of the AMETEK Growth Model, in the company's own words, is "high single digit annual percentage growth in sales and double digit annual percentage growth in earnings per share over the business cycle, strong cash flow generation, and a superior return on total capital". That is a mundane sentence and an unusually specific one. It commits to earnings growing faster than sales, which is only possible if the acquired businesses get better after purchase rather than merely bigger. The electromechanical group's 2025 result is the pattern working: operating income reached "a record $578.9 million for 2025, an increase of $122.4 million or 26.8%", on sales that rose 8% organically with roughly a point of currency help. Profit growing at three times the pace of sales is not something an acquisition delivers on day one.

The capital structure lets this continue without asking anything of shareholders. Borrowings sit at about 1.5 times trailing operating profit and the interest bill is covered around 24 times over, so the acquisition programme is funded out of the business rather than out of new equity: the share count has drifted slightly down over the past four years. Return on equity runs near 14.0% against a cost of equity closer to 9.3%, which is the arithmetic underneath the phrase "compounder" and the reason a book-value-based frame produces a number above book rather than at it. The last acquisition of size, FARO Technologies, was bought in 2025 for "$ 1,023.7 million", funded without disturbing any of that.

Bear Case

Roper, Teledyne, Keysight, Fortive, Amphenol and Parker-Hannifin are not sitting still, and they are shopping in the same aisle. The bear case for a serial acquirer rarely starts with the operations; it starts with the supply of things worth buying. AMETEK's own filing states the dependency directly: "A portion of our growth has been attributed to acquisitions of strategic businesses. We plan to continue making strategic acquisitions", and warns it "may not be able to consummate future acquisitions or successfully integrate recent and future acquisitions". When half a dozen well-capitalised industrials are competing for the same niche instrument makers, the price of the next deal is set by the most optimistic buyer, and the returns on capital that made this model work are decided at purchase rather than afterwards.

Then there is what the shares already assume. At about 31 times operating profit, the market is asking for the current pace of profit growth, running at the fastest rate the business can fund from its own resources, to hold for roughly five and a half years. Of comparable fast growers, only about 28% managed a run of that length. That does not make it implausible. It does mean the price is on the far side of what usually happens, and the sensitivity is unforgiving: a single percentage point of extra cost of capital takes nearly two years off the horizon the price can support.

The methods, taken together, are unusually one-sided. The peer-multiple lenses put the business at roughly a third of where the shares trade. The asset-based lenses land in the same region. The earnings-power lenses, which capitalize what the business currently produces with no growth at all, land furthest away. Only the growth methods reach today's level, and the one that gets there does so by holding an exit multiple flat at today's level across a six-year projection. Every route to this price runs through the assumption that AMETEK keeps compounding. There is no cheap-on-the-assets floor underneath.

Acquisitive companies also carry a specific accounting exposure that does not show up until it does. The annual goodwill test rests on "assumptions and estimates concerning future levels of revenue growth, operating margins, depreciation, amortization and working capital requirements" discounted at a chosen rate, all of them level 3 inputs. That is a valuation performed by the same management whose acquisition record is being judged, and it is the mechanism by which several years of disappointing end-market demand turn into one large write-down years later. The FARO purchase alone placed roughly $250.7 million into customer relationship intangibles, which is a specific bet that acquired customers stay.

Finally, visibility is thinner than the compounding record implies. The company notes that "Visibility into the future performance of certain of our markets is limited (particularly for markets into which we sell through distribution). Our quarterly sales and profits depend substantially on the volume and timing of orders received during the fiscal quarter". A business priced for uninterrupted compounding is being run on order flow it says it cannot forecast well, and short-cycle instrument demand is the first thing industrial customers defer.

Valuation

The unusual feature of this file is how lopsided the methods are. Only the growth-based approaches reach today's level. The peer-multiple and asset-based lenses both put the business near a third of where it trades, and the earnings-power lenses, which capitalize what the company currently produces and credit no growth at all, land furthest below. When only the forward methods reach the price, the premium is a durability premium: the market is paying for compounding that static frames have no way to encode. That is the correct reading here, and it is also the whole risk, because there is no asset floor doing any of the work.

Put a number on the assumption. At $242.03 the shares carry about 31 times company-wide operating profit, which resolves into profit growing at the fastest rate this business can fund internally and holding that rate for roughly five and a half years. About 28% of comparable fast growers sustained a run that long. Against its own record the near-term pace is not the demanding part; the persistence is. The engine's own model that reaches the price gets there by holding an exit multiple flat at today's level across a six-year projection, which is a fair description of what a buyer at this level is agreeing to.

Management has told everyone what it is aiming for. The Growth Model targets "high single digit annual percentage growth in sales and double digit annual percentage growth in earnings per share over the business cycle", and the record supports the claim: guidance has been raised 26 times and reaffirmed twice since 2006, and 2025 set records across sales, operating income, orders and backlog. The important detail is the distance between that target and what the shares assume. High single digit sales growth with double digit earnings growth is a good business. Whether it is a 31 times operating profit business depends entirely on how many years of it the buyer expects to collect.

The cohort makes the quality real without settling the question. AMETEK's 26.2% operating margin on roughly $7.6 billion of revenue is beaten only by Roper (ROP) at 28.1% among the instrument comparisons, and sits above Amphenol (APH) at 25.8% and Parker-Hannifin (PH) at 22.8% in the electromechanical set, on a much smaller revenue base than either. Balance sheet risk is close to absent: borrowings run about 1.5 times trailing operating profit, interest is covered around 24 times, operations generate rather than consume funds, and the share count has drifted down slightly over four years. Nothing about the downside here is a solvency question. It is a duration question, and the duration is the part the price has already spent.

Catalysts

The next scheduled event is close. Second-quarter results are released before the market opens on Tuesday, August 4, 2026, with the call the same morning. Management guided full-year 2026 sales to be up high single digits against 2025, with second-quarter sales expected on the same trajectory. That is the pace the Growth Model calls for, so the print is less about whether the target is met than about the mix underneath it: how much came from volume in the existing businesses and how much from the deals already closed.

Acquisition activity is the other thing worth tracking, and it is the mechanism the model runs on. The company completed FARO Technologies in 2025 for consideration of $1,023.7 million, part of a run of 15 acquisitions since the start of 2021. Because a large share of the compounding record comes from redeploying internally generated funds into these purchases, the announcement pace and the prices paid matter more to the long-run result than any single quarter of organic growth. Nothing new has been announced this month; the capacity to act, given how little of the balance sheet is committed, plainly remains.

Orders and backlog are the leading indicator to watch inside the August release. The 2025 annual report recorded records in both, and short-cycle instrument demand turns before revenue does. If orders soften while sales still look fine, that is the sequence in which a compounding story first shows strain, and it would land against a price that has already assumed the compounding continues.

Peer Cohorts (Per Segment, With Filing Citations)

Electronic Instruments Group (EIG) (reported)

• ROP (ROPER TECHNOLOGIES INC)
• FY2025 10-K: …primarily in the perishable food sector. MHA - health care services and software solutions to alternate site health care markets. SHP - data analytics and benchmarking information solutions for the post-acute healthcare provider marketplace. SoftWriters - software solutions to pharmacies that primarily serve the…
• FY2025 10-K: …used in numerous identity access management applications across a variety of vertical markets. Verathon - medical devices that enable airway management, including bronchoscopes and video laryngoscopes, and bladder volume measurement solutions for healthcare providers. 6 Materials and Suppliers We believe most…
• TDY (TELEDYNE TECHNOLOGIES INC)
• FY2025 10-K: …systems engineering and integration, advanced technology application, software development and manufacturing solutions for defense, space, environmental and energy applications. Business segment results include net sales and operating income by segment but excludes corporate office expenses. Corporate expense…
• FY2025 10-K: …one acquisition which will be included within the Instrumentation segment. See Note 18 for additional information. Our Business Segments Our businesses are aligned in four segments: Digital Imaging, Instrumentation, Aerospace and Defense Electronics, and Engineered Systems. Additional financial information about our…
• KEYS (KEYSIGHT TECHNOLOGIES, INC.)
• FY2025 10-K: …aerospace, defense, and satellite equipment prime contractors, subcontractors, and related component suppliers. Government customers include a range of government agencies, such as departments and ministries of defense, security agencies, and related government research entities. Our customers need to accelerate the…
• FY2025 10-K: …and other corporate infrastructure expenses. Segment allocations are determined on a basis that we consider to be a reasonable reflection of the utilization of services provided to, or benefits received by, the segments. Newly acquired businesses are not allocated these charges until integrated into our shared…
• MKSI (MKS INC)
• FY2025 10-K: …Electric Corporation. 9 In MSD, Element Solutions Inc., Qnity Electronics, Inc., Uyemura, JCU International, Inc. and Okuno Chemical Industries Co., Ltd. offer products that compete with our chemistry products. Schmid Group, Process Automation International Limited, Top Creation Machines Co., Ltd., Universal Circuit…
• FY2025 10-K: …other assets. Reportable Segments, Products and Service Offerings We are divided into three divisions: the Vacuum Solutions Division ("VSD"), the Photonics Solutions Division ("PSD") and the Materials Solutions Division ("MSD"). We group our product offerings by our reportable segments: VSD, PSD and MSD. Global…
• ST (SENSATA TECHNOLOGIES HOLDING PLC)
• FY2025 10-K: …customers' products and solutions can act upon. Our electrical protection portfolio (which includes both components and systems) is composed of various switches, fuses, inverters, energy storage systems, high-voltage distribution units, controllers, and software, and includes high-voltage contactors and other…
• FY2025 10-K: …uncertainties, risks, and potential events including, but not limited to, those described in Item 1A: Risk Factors included elsewhere in this Report and as may be updated from time to time in Item 1A: Risk Factors included in our Quarterly Reports on Form 10-Q or other subsequent filings with the United States…
• FTV (Fortive Corp)
• FY2025 10-K: …Our Intelligent Operating Solutions segment provides advanced instrumentation, software and services to tens of thousands of customers enabling their mission-critical workflows. These offerings include professional instruments used in applications including maintenance, repair, measurement and condition monitoring,…
• FY2025 10-K: …to be safe and effective for their intended uses and to comply with the regulations administered by the U.S. Food and Drug Administration ("FDA"). The FDA regulates the design, development, research, preclinical and clinical testing, introduction, manufacture, advertising, labeling, packaging, marketing,…

Electromechanical Group (EMG) (reported)

• TEL (TE CONNECTIVITY PLC)
• FY2025 10-K: …or resources that support our goals. An inability to receive or maintain favorable ESG ratings could negatively impact our reputation or impede our ability to compete as effectively to attract and retain employees or customers, which may adversely impact our operations. Unfavorable ESG ratings could also lead to…
• FY2025 10-K: …components industry, which has and could in the future negatively impact our prices, margins, and market share. We operate in highly competitive markets for electronic components and expect that both direct and indirect competition will increase in the future. Our overall competitive position depends on various…
• APH (AMPHENOL CORP /DE/)
• FY2025 10-K: 203; ​level ● ​ ​position ● ​ ​pressure ● ​ ​temperature ● ​ ​vibration ​ For further details related to the Company's reportable business segments, information regarding the Company's operations and results by reportable segment, as well as the Company's net sales and long-lived assets by geographic area, refer to…
• FY2025 10-K: …allow the Company to better anticipate and respond to these customer needs when designing new products and new technical solutions. By working with customers to develop new products and technologies, the Company is able to identify and act on trends and leverage knowledge about next-generation technology across our…
• ROK (Rockwell Automation, Inc.)
• FY2025 10-K: …our product, solution and services portfolio, technology differentiation, industry and application expertise, installed base, partner ecosystem, global presence and price. Major competitors include Siemens AG, ABB Ltd, Schneider Electric SA, Emerson Electric Co., Mitsubishi Electric Corp., Honeywell International…
• FY2025 10-K: …sensing, industrial components, and configured-to-order products. The Software & Control segment includes control and visualization software and hardware, digital twin, simulation and information software, and network and security infrastructure. The Lifecycle Services segment includes digital consulting,…
• DOV (DOVER Corp)
• FY2025 10-K: , retail fueling and vehicle wash establishments. • Our Imaging & Identification segment supplies precision marking and coding, product traceability, brand protection and digital textile printing equipment, as well as related consumables, software and services to the global packaged and consumer goods, pharmaceutical,…
• FY2025 10-K: …of goods and services. 95 Table of Contents DOVER CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Amounts in thousands except share data and where otherwise indicated) 19. Segment Information The Company categorizes its operating companies into five reportable segments: Engineered Products, Clean Energy &…
• PH (PARKER-HANNIFIN CORPORATION)
• FY2025 10-K: …we manufacture and sell. In the Diversified Industrial Segment, Parker competes based on product quality and innovation, customer experience, manufacturing and distribution capability, aftermarket support, and price competitiveness. We believe that we are one of the market leaders in most of the major markets for our…
• FY2025 10-K: We offer hundreds of thousands of individual part numbers, and no single product contributed more than one percent to our total net sales for the year ended June 30, 2025. Listed below are some of our principal products. Diversified Industrial Segment . Our Diversified Industrial Segment products consist of a broad…
• HUBB (HUBBELL INC)
• FY2025 10-K: 2; • Ohio Brass® • Meramec® • Reliaguard® • Greenjacket® • Armorcast® • Beckwith Electric™ • Continental® • R.W. Lyall™ • Gas Breaker® • AEC™ • Ripley® • Electro Industries / Gauge Tech™ • Balestro™ • Systems Control™ • Nicor™ • DMC Power® 4 HUBBELL INCORPORATED - Form 10-K Electrical Solutions Segment Hubbell…
• FY2025 10-K: …of our businesses design and manufacture industrial controls and communication systems used in the non-residential and industrial markets. Many of these products are designed such that they can also be used in harsh and hazardous locations where a potential for fire and explosion exists due to the presence of…
• ITGR (INTEGER HOLDINGS CORPORATION)
• FY2025 10-K: …to our reputation and competitive advantage caused by quality problems related to our products; our dependence upon our information technology systems and our ability to prevent cyber-attacks and other failures; global climate change and the emphasis on ESG (as defined below) matters by various stakeholders; our…
• FY2025 10-K: …could negatively affect our business or the price of our common stock. Customer, investor and employee expectations relating to ESG are continuing to evolve. In addition, certain governmental and non-governmental organizations are enhancing or advancing requirements specific to ESG matters. Stakeholder focus on ESG…

Methodology Note

• Priced-in inversion: the valuation is inverted on the current price to recover the operating-income growth, duration, and steady-state margin the price embeds (ROE for financials, FFO growth for REITs).
• Valuation x-ray: the valuation models, grouped into four families (asset, earnings, relative, growth). Each model is expressed as a price/FV ratio (distance from price), not a point fair-value estimate. The spread across families is the disagreement.
• Economic-unit decomposition (SOTP): each disclosed business unit is assigned its native valuation basis before any multiple is applied. Operating units are valued on enterprise value; funded financial units are valued on their own common equity, because their borrowings fund earning assets rather than levering the parent. A company total is stated only once every material unit carries a supported value and the parent capital bridge reconciles.
• Solvency: net cash/debt, net-debt-to-NOPAT, interest coverage, and share-count CAGR from EDGAR financials (net debt / FFO and fixed-charge coverage for REITs; regulatory-capital framing for financials).
• Peer cohorts: per-segment comparables with deep-linkable SEC filing citations.

Fundamentals sourced from SEC EDGAR filings. Current price from Databento. The priced-in inversion and valuation x-ray are computed by the boothcheck engine; narrative composed by AI from the structured data.