Amphenol currently trades at $65.21 per share and has shown little upside over the past six months, posting a small loss of 2.7%. However, the stock is beating the S&P 500’s 8.3% decline during that period.
Given the relative strength, is there still a buying opportunity in APH? Or is the market overestimating its value? Find out in our full research report, it’s free.
Why Are We Positive On APH?
With over 90 years of connecting the world's technologies, Amphenol (NYSE: APH) designs and manufactures connectors, cables, sensors, and interconnect systems that enable electrical and electronic connections across virtually every industry.
1. Skyrocketing Revenue Shows Strong Momentum
A company’s long-term sales performance can indicate its overall quality. Even a bad business can shine for one or two quarters, but a top-tier one grows for years. Over the last five years, Amphenol grew its sales at an exceptional 13.1% compounded annual growth rate. Its growth beat the average business services company and shows its offerings resonate with customers. 
2. Economies of Scale Give It Negotiating Leverage with Suppliers
With $15.22 billion in revenue over the past 12 months, Amphenol is a behemoth in the business services sector and benefits from economies of scale, giving it an edge in distribution. This also enables it to gain more leverage on its fixed costs than smaller competitors and the flexibility to offer lower prices.
3. Outstanding Long-Term EPS Growth
We track the long-term change in earnings per share (EPS) because it highlights whether a company’s growth is profitable.
Amphenol’s EPS grew at an astounding 15.1% compounded annual growth rate over the last five years, higher than its 13.1% annualized revenue growth. This tells us the company became more profitable on a per-share basis as it expanded.
Final Judgment
These are just a few reasons why we're bullish on Amphenol, and with its recent outperformance in a weaker market environment, the stock trades at 30× forward price-to-earnings (or $65.21 per share). Is now the right time to buy? See for yourself in our full research report, it’s free.
Stocks We Like Even More Than Amphenol
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