AMPHENOL CORP /DE/ (APH): what the price requires

At today's price, AMPHENOL CORP /DE/ (APH) is priced for today's economics sustained for ~7.9 years. boothcheck doesn't publish a fair value or a price target; it shows what the price assumes, so you can judge whether that bar is too high.

Generated: 2026-07-13 · Source: https://boothcheck.com/report/APH

Headline

FieldValue
TickerAPH
CompanyAMPHENOL CORP /DE/
Current price$156.37/sh
CompositionUnited States 35% / China 16% / Other foreign locations 50%

What The Price Requires (Inversion)

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

FieldValue
Inversion basiswhole-company
Operating margin needed12.1%
Operating margin today24.6%
Margin compression implied-12.5pp
Must persist for7.9y
Multiple paid35x operating income

The operating-margin requirement is derived from the framework's value band at year 7, a separately labeled basis from the headline growth/duration solve.

Solve inputs: computed at a 9.7% cost of capital; growth searched up to the 25% self-funding ceiling; each 1pp moves the implied horizon ~1.9 years.

How unusual the bet is: elevated

ReferenceValue
vs own history+1.03σ
cohort percentile (of 177 peers)64
sustained it ~7.9 years at this level20%
implied end-window share0%

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.

FamilyMedian price/FVModelsReads
Asset3.45x4expensive
Earnings5.30x5expensive
Relative1.56x5expensive
Growth0.82x3justifies

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 8.6%); the inversion above states its own rate.

Per-Model Detail (n=17)

ModelFamilyFVPrice/FVApplicableMethodology
DCF Perpetual GrowthGrowth$161.430.97xyesFCF base $5.1B, growth 25% (input: historical growth), terminal g 4.0%, WACC 8.6%, 7yr projection
DCF Exit MultipleGrowth$190.030.82xyesExit EV/EBITDA: 24.2x / 27.2x / 30.2x (bear / base = today's held flat / bull), 7yr
Relative ValuationRelative$114.331.37xyesP/E 28.95x (blended: sector 22x + trailing (TTM) 45x), scenarios: 23.2x / 28.9x / 34.7x (bear / base = sector held flat / bull), EV/EBITDA 19.37x
Simple DDMGrowth——no—
Two-Stage DDMGrowth——no—
Simple Excess ReturnAsset$37.434.18xyesBV/sh $10.84, ROE (TTM) 31.9%, ke 9.3%
Two-Stage Excess ReturnAsset$72.702.15xyes5yr excess ROE then converge to ke=9.3%
Discounted Future Market CapGrowth$226.890.69xyesRev $25.9B, growth 30% (input: historical growth; tapered), Terminal P/S: 6.2x / 7.8x / 9.3x (bear / base = today's held flat / bull, cap 12x)
Peter Lynch Fair ValueRelative$41.763.74xyesEPS $3.48, growth 2% (input: historical EPS growth), PEG=25.19 (Overvalued)
Margin TrajectoryGrowth——no—
Earnings Power ValueEarnings$9.7416.05xyesNormalized EBIT (5y avg op income, one-time charges added back) $3.53B × (1−40%) / WACC 8.6% → EPV (no growth)
Residual IncomeAsset$57.612.71xyesBV $10.84 + 5yr PV of (ROE (TTM) 31.9% − Kₑ 9.3%) × BV; BV grows 8.8%/yr
Graham NumberAsset$29.135.37xyes√(22.5 × EPS $3.48 × BVPS $10.84) — Graham's conservative floor
EV/EBITDA RelativeRelative$88.011.78xyesEBITDA $7.85B × sector EV/EBITDA 16.0x
FCF YieldEarnings$29.485.30xyesFCF $4631.7M / Kₑ 9.3% — zero-growth perpetuity
SBC-Adj FCF YieldEarnings$28.285.53xyesSBC-adj FCF $4.49B (FCF $4.63B − SBC $0.14B) capitalized at Kₑ
Ben Graham FormulaEarnings$112.291.39xyesEPS $3.48 × (8.5 + 2×15.0%) × (4.4 / 5.3%)
ROIC-Justified P/BAsset$5.3229.39xyesBV $10.84 × (ROIC 4.2% / WACC 8.6%) (excluded from median)
P/Sales SectorRelative$100.431.56xyesRevenue $25.90B × sector P/S 5.0x
PEG Fair ValueRelative$130.501.20xyesEPS $3.48 × (PEG 1.5 × growth 25.0% (input: historical EPS growth)) → PE 37.5x
Earnings YieldEarnings$37.624.16xyesEPS $3.48 / required return 9.3% (Rf 4.3% + ERP 5.0%)
Funds From Operations MultipleRelative——no—
Clinical Phase NPVGrowth——no—
MertonAsset——no—
V5 Mechanical———no—

Solvency

FieldValue
Net debt$14.2b
Net debt / NOPAT (after-tax)4.13x
Net debt / operating income (pre-tax)2.37x
Interest coverage13.4x
Share count CAGR (dilution)0.8%
Burning cashno

Bullet Takeaways

Bull Case

Begin with the bear's strongest objection, because the bull case is more credible for facing it: Amphenol's spectacular recent growth is heavily AI-driven, and AI demand is exactly the kind of thing that can prove cyclical or pull forward. The pivot is that the data shows breadth, not a single fragile bet. First-quarter 2026 sales reached a record $7.6 billion, up 58% in dollars and 33% on an organic basis, with adjusted operating margin expanding 380 basis points to 27.3%. Margin expanding that hard on volume that high is operating leverage, the sign of a business whose cost structure scales rather than strains. And the order book confirms it is not a one-quarter spike: quarterly orders were $9.4 billion, running ahead of already-record sales.

The moat is structural and geographic, which is what lets the model absorb shocks in any single market. The 10-K describes a worldwide manufacturing footprint as "an important competitive advantage, as it allows the Company to provide quality products on a timely and worldwide basis to its multinational customers, while at the same time offering a level of resiliency and diversification against local risks and challenges that may emerge in any single geography." Amphenol sells into "mobile devices, industrial, communications networks, automotive, commercial aerospace and defense end markets," so no one end market dictates the whole. That diversification is why the company can run a 25.8% trailing operating margin through cycles that would whipsaw a single-market supplier.

Capital allocation is the third leg, and it is the acquisition engine done well. Amphenol's growth comes partly from a steady program of bolt-on deals, and the CommScope acquisition is the largest recent example, with the Communications Solutions segment up 80% year over year on integration. The company funds these without diluting holders: the share count has risen less than 1% a year. Against a cohort of electronics and datacenter-exposed names including Vertiv, Celestica, and Sanmina, Amphenol is the diversified compounder with the highest margin, and the bull case is that the AI buildout is a multi-year demand cycle landing on a business already built to capture it across geographies and end markets.

Bear Case

The bear case is a balance-sheet-and-cycle argument, and it starts with the debt taken on to fund growth. Amphenol carries about $14.2 billion of net debt against $6.7 billion of trailing operating income, roughly 2.1 times, and that figure stepped up specifically for the CommScope deal. The 10-K is explicit: the company "used the net proceeds from the November Senior Notes, together with borrowings under the Delayed Draw Term Loans and cash on hand, to fund the cash consideration for the CommScope acquisition," producing an increase in debt levels. Interest coverage near 13 times keeps that comfortable at today's earnings, but today's earnings are running at a record, inflated by an AI demand wave. The leverage is measured against a peak, and the bear's whole point is whether the peak holds.

That feeds the structural question the price ignores. Connectors and interconnect products are, at bottom, a cyclical hardware business tied to electronics build rates. The price is paying about 36 times operating income, which embeds growth held at its self-funding ceiling for roughly nine years. Only about 19% of comparable fast-growers sustained that pace for eight-plus years. Almost all of the recent IT datacom growth is attributable to AI applications, which is a strength today and a concentration risk if AI capital spending normalizes or digests. The connector business has always had cycles; pricing it as if this one runs uninterrupted for nine years is the bet the price is making, and the static methods agree it is a stretch: asset value and earnings power both flag the price several times above where they land, and only the forward-growth method reaches it.

The valuation math is where the bear lands hardest. With a 25.8% operating margin and a price near 36 times operating income, Amphenol is valued as a durable compounder, not a cyclical supplier. Every acquisition also brings goodwill and intangibles; the 2024 deals alone added over $1.1 billion of goodwill and $576 million of definite-lived intangibles from customer relationships and acquired backlog. Those carry impairment risk if a downturn hits the acquired businesses. The bear does not dispute that Amphenol is a high-quality operator; it argues that a peak-cycle, AI-concentrated earnings stream financed with stepped-up debt is being capitalized at a multiple that assumes the cycle does not turn, and that any normalization in AI spending takes both the growth rate and the multiple down together.

Valuation

What the price is betting is duration. Inverted, Amphenol's price embeds growth held at its self-funding ceiling for about nine years, which works out to roughly 36 times operating income. The recent growth rate is well within what the company has just delivered; the stretch is in how long it must persist. Sustaining that pace for eight to nine years is something only about 19% of comparable fast-growers have managed. The bet is not that Amphenol grows fast next year, which it plainly is; it is that the current AI-fueled demand cycle, layered on the diversified base business, compounds for the better part of a decade.

The methods say the same thing in their own language: only one of them reaches the price. The forward-growth lens lands at the price, crediting durable compounding. The asset-value, earnings-power, and even the peer-multiple lenses all sit below it, the earnings-power methods most dramatically, reading the price several times above where they land. That pattern is the signature of a moat-or-durability premium: the static methods structurally cannot price multi-year compounding, so they call the stock expensive, while the forward method says the compounding is real and worth it. The disagreement is the entire investment question, whether you are buying a durable AI-cycle compounder or a peak-cycle connector business at a peak-cycle multiple.

Solvency frames the downside and is the place the bull case is most exposed. Net debt of about $14.2 billion is 2.1 times trailing operating income and 3.7 times after-tax operating profit, stepped up to fund CommScope, with interest coverage near 13 times. That is investment-grade and serviceable, but the ratios are measured against record earnings; in a connector downturn the denominator falls and the leverage looks heavier. The share count has been nearly flat, so growth has not come at holders' per-share expense, which is a genuine strength. Against the datacenter and electronics cohort, Amphenol carries the highest margin and the broadest end-market diversification, and the premium is the market paying for that quality, on the assumption the AI cycle extends the compounding for years rather than quarters.

Catalysts

The first-quarter 2026 report was a record on nearly every line. Amphenol posted sales of $7.6 billion, up 58% in dollars and 33% organically, with adjusted diluted EPS up 68% to $1.06 and adjusted operating margin up 380 basis points to 27.3%. The growth was led by IT datacom, where virtually all of the segment's sequential organic growth came from AI applications, and by Communications Solutions, up 80% year over year on the CommScope integration. Quarterly orders of $9.4 billion ran ahead of record sales, a forward indicator of continued demand.

Guidance pointed to more of the same. For the second quarter of 2026, the company guided to sales of $8.1 to $8.2 billion, growth of 43% to 45% over the prior-year quarter, and adjusted diluted EPS of $1.14 to $1.16, up 41% to 43%. A guide for another quarter of forty-plus-percent growth is the catalyst that has carried the stock, and it raises the bar each subsequent print must clear.

The forward watch items are the durability of AI datacenter demand and the CommScope integration. Because nearly all the recent IT datacom acceleration is AI-driven, the pace of hyperscaler and datacenter capital spending is the single most important external variable, and any sign of digestion would show up first in the order book that currently leads sales. The integration and margin contribution of CommScope is the second, both for the growth it adds and for the debt it brought on. Sustained order strength and on-plan integration would support the multi-year growth assumption the price depends on.

Peer Cohorts (Per Segment, With Filing Citations)

Communications Solutions (reported)

Harsh Environment Solutions (reported)

Interconnect and Sensor Systems (reported)

Methodology Note

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.

Sources

Amphenol Q1 2026 results, 2026 · Amphenol Q2 2026 guidance, 2026

View the full interactive APH report on boothcheck