Amphenol Corp (APH, Financial) has recently been in the spotlight, drawing interest from investors and financial analysts due to its robust financial stance. With shares currently priced at $101.85, Amphenol Corp has witnessed a daily loss of 0.9%, marked against a three-month change of 28.79%. A thorough analysis, underlined by the GF Score, suggests that Amphenol Corp is well-positioned for substantial growth in the near future.
What Is the GF Score?
The GF Score is a stock performance ranking system developed by GuruFocus using five aspects of valuation, which has been found to be closely correlated to the long-term performances of stocks by backtesting from 2006 to 2021. The stocks with a higher GF Score generally generate higher returns than those with a lower GF Score. Therefore, when picking stocks, investors should invest in companies with high GF Scores. The GF Score ranges from 0 to 100, with 100 as the highest rank.
- Financial strength rank: 7/10
- Profitability rank: 10/10
- Growth rank: 10/10
- GF Value rank: 3/10
- Momentum rank: 9/10
Each one of these components is ranked and the ranks also have positive correlation with the long term performances of stocks. The GF score is calculated using the five key aspects of analysis. Through backtesting, we know that each of these key aspects has a different impact on the stock price performance. Thus, they are weighted differently when calculating the total score. With high ranks in financial strength, profitability, and growth, but a lower GF Value rank, GuruFocus assigned Amphenol Corp the GF Score of 93 out of 100, which signals the highest outperformance potential.
Understanding Amphenol Corp Business
Amphenol Corp is a global supplier of connectors, sensors, and interconnect systems. Holding the second-largest connector market share globally, Amphenol Corp sells into diverse end markets such as automotive, broadband, commercial air, industrial, IT and data communications, military, mobile devices, and mobile networks. With a market cap of $60.94 billion and sales of $12.55 billion, the company boasts an operating margin of 20.66%. Amphenol Corp is diversified geographically, with operations in 40 countries, reflecting a strong global presence and a resilient business model.
Financial Strength Breakdown
According to the Financial Strength rating, Amphenol Corp's robust balance sheet exhibits resilience against financial volatility, reflecting prudent management of capital structure. The Interest Coverage ratio for Amphenol Corp stands impressively at 18.6, underscoring its strong capability to cover its interest obligations. This robust financial position resonates with the wisdom of legendary investor Benjamin Graham, who favored companies with an interest coverage ratio of at least 5. With an Altman Z-Score of 6.6, Amphenol Corp exhibits a strong defense against financial distress, highlighting its robust financial stability. With a favorable Debt-to-Revenue ratio of 0.35, Amphenol Corp's strategic handling of debt solidifies its financial health.
Profitability Rank Breakdown
The Profitability Rank shows Amphenol Corp's impressive standing among its peers in generating profit. The company's Operating Margin has increased over the past five years, with a current margin of 20.66%. Furthermore, Amphenol Corp's Gross Margin has seen a consistent rise over the past five years, reaching 32.53% in 2023. This trend underscores the company's growing proficiency in transforming revenue into profit. Amphenol Corp's strong Predictability Rank of 5.0 stars out of five underscores its consistent operational performance, providing investors with increased confidence.
Growth Rank Breakdown
Ranked highly in Growth, Amphenol Corp demonstrates a strong commitment to expanding its business. The company's 3-Year Revenue Growth Rate is 13.1%, which outperforms better than 74% of companies in the Hardware industry. Moreover, Amphenol Corp has seen a robust increase in its earnings before interest, taxes, depreciation, and amortization (EBITDA) over the past few years. Specifically, the three-year growth rate stands at 15.1, and the rate over the past five years is 10.9. This trend accentuates the company's continued capability to drive growth.
Next Steps
Considering Amphenol Corp's financial strength, profitability, and growth metrics, the GF Score highlights the firm's unparalleled position for potential outperformance. Investors seeking to capitalize on such robust financial health and promising growth trajectory should consider the insights provided by the GF Score. For those looking to explore further, GuruFocus Premium members can find more companies with strong GF Scores using the following screener link: GF Score Screen.
This article, generated by GuruFocus, is designed to provide general insights and is not tailored financial advice. Our commentary is rooted in historical data and analyst projections, utilizing an impartial methodology, and is not intended to serve as specific investment guidance. It does not formulate a recommendation to purchase or divest any stock and does not consider individual investment objectives or financial circumstances. Our objective is to deliver long-term, fundamental data-driven analysis. Be aware that our analysis might not incorporate the most recent, price-sensitive company announcements or qualitative information. GuruFocus holds no position in the stocks mentioned herein.
