AMETEK AME
Industrials · Electrical Equipment & Parts · Synthos Deep Dive · 2026-07-03
The Overview
AMETEK builds specialized measuring instruments and electric motors — the sensors, gauges, connectors and precision devices that go inside aircraft, factories, labs, medical scanners and power plants. You've never seen its name on a shelf, but its parts are buried inside thousands of machines. Its real skill is buying small, high-quality niche manufacturers and running them better — it has done this hundreds of times over decades without a single bad write-down, which is rare.
The catch: the stock is expensive. You're paying about $35 for every $1 the company earns, which only makes sense if it keeps growing — and it's a big, mature company now, so it grows steadily but slowly (mid-single digits). Our verdict is Watch: a great business, but the price already assumes everything goes right. Wait for a dip.
Here's what our three scores mean in everyday terms:
- Downside Risk 5/10 (middle of the road). Financially rock-solid with very little debt and a stock that doesn't swing wildly — but because it's priced high, a stumble would sting.
- Growth Quality 7/10 (good). A very profitable, well-run business — just not a fast grower.
- Exponential Potential 3/10 (low). It's already big and growing slowly; don't expect it to double any time soon.
The one big worry: the price. If the acquisition machine slows or factory demand softens, a high-priced stock can fall hard even if the business is fine.
Putting a number on it: our fair-value estimate is $232 against a current price of $236.25 — a premium price for a business we still like.
Our summary metrics
Fortress balance sheet (net-debt/EBITDA 0.7×) & beta 0.99 — but 35× trailing on only mid-single-digit organic growth.
~6% forward EPS CAGR, 37% gross / 26% op margin, ROIC ~11%, durable serial-acquirer moat — quality but not fast.
Mid-single-digit growth, decelerating after 2026-27; a mature $54B compounder — no multibagger runway.
What does “fair value” mean?
Fair value is Synthos’s estimate of what one share is worth today, based on our model of the company’s future cash generation and the risks to it. It is not a price target or a prediction of where the stock trades next quarter — it’s the price where we think risk and reward are balanced. Above it, you’re paying for outcomes better than our base case; below it, the market is offering a margin of safety.
The model’s inputs and weightings are proprietary — they’re the product. What we publish is the output, plus an independent, public-math cross-check further down the page (“Check our number”) so you can judge it for yourself.
What do the 5 tiers mean? (Core · Tactical · Watch · Hold · Avoid)
Exponential Potential
Mid-single-digit growth, decelerating after 2026-27; a mature $54B compounder — no multibagger runway.
What could take this further than the base case — and where the market may be underpricing it. Full forward-growth and acceleration math in Deeper analysis, §4 below.
Deeper analysis
Technicals, fundamentals, valuation, and the full expert-claim evidence panel — the detail behind the numbers above.
Reference table
| Street consensus | $252.55 (high $303 / low $215; 20 Buy · 9 Hold · 0 Sell) — context, not our anchor |
| Valuation | 35× trailing EPS · 29× FY26E · 27× FY27E · ~24× FY30E · EV/S 7.3× · EV/EBITDA 23.5× |
| Technicals | Uptrend — $234.62, −3% off 52-wk high, above 50/200-DMA, RSI 59, +28% 12-mo (SPY +21%) |
| Conviction | Low breadth — 1 net-bullish voice (Business Breakdowns), 6 traceable claims; verdict is fundamentals/quant-driven |
| Position sizing | If owned: quality-industrial core, ~2–3%; prefer to add on a pullback, not here |
What the experts actually said 12 traceable claims on AME · showing the highest-conviction voices
“Management are excellent capital allocators—hundreds of acquisitions, never a goodwill write-off; buy/build differentiated cash-generative businesses.”
Every claim reconciles to a real claim_id in the Synthos knowledge base — this is the evidence the verdict is built on, not vibes. Management (the company itself) is shown but half-weighted; one cautionary voice is included on purpose.
Price & moving averages 12 months · 50 & 200-day averages · 52-week range
Solid line = price · dashed line = 50-day average · dotted line = 200-day average · the two thin horizontal lines mark the 52-week high and low. Price above both averages is an uptrend.
Data summary: last close $236.25, 2% below the 50-day average ($242), 5% above the 200-day average ($225) — a mixed trend. 9% below the 52-week high of $259, 32% above the 52-week low of $179.
Bollinger Bands 20-day average ± 2 standard deviations
The shaded band widens when the stock gets more volatile. Riding the upper edge = strong momentum (sometimes stretched); the lower edge = weak / potentially oversold.
Data summary: price $236.25 is currently inside the band (band $235–$262).
RSI (14) momentum gauge · 0–100
Above 70 (overbought zone, shaded) = overbought, below 30 (oversold zone, shaded) = oversold. Currently 40.
MACD 12 / 26 / 9 · trend & momentum
The MACD line crossing above the signal line (bars flip to the up color) = momentum turning up; crossing below (bars flip to the down color) = turning down. Bar height = the size of that gap.
Data summary: MACD is currently below its signal line by 1.81, negative momentum.
Relative performance vs S&P 500 & its sector (XLI (sector)), set to 100 a year ago
Solid = AME · dashed = S&P 500 · dotted = XLI (sector). A rising line means it is beating that benchmark — the sector line shows whether it is a leader or laggard within its own group.
Forward revenue & earnings actual → estimate · "FY" = fiscal year, "E" = estimate
Darker bars = actual results, brighter = analyst estimates. Taller bars to the right = expected growth.
Key stats an RIA wants
1. What it is
AMETEK (NYSE: AME) is a ~$54B global manufacturer of electronic instruments and electromechanical devices, founded 1930, headquartered in Berwyn, PA, run by CEO David Zapico. It operates as a decentralized collection of niche businesses under two segments, and its core competency is the "AMETEK Growth Model" — buying differentiated, cash-generative niche manufacturers and improving their margins. Fiscal year ends December 31.
Revenue mix (FY2025, from filings):
- By segment: Electronic Instruments Group (EIG) $4.92B (66%) — process/analytical instruments, aerospace sensors, power/test & measurement, medical diagnostics; Electromechanical Group (EMG) $2.48B (34%) — engineered connectors, precision motion control, thermal management, specialty materials, aerospace MRO.
- By geography: roughly ~53% United States, the balance international — Asia ~$1.49B, EU ~$1.09B, other non-US ~$0.73B, plus UK. (FMP's FY25 geo file drops the explicit US line; FY24 showed US $3.65B of $6.94B ≈ 53%, and the mix is stable.) International exposure is a tariff/FX and supply-chain risk (§11).
Q1'26 (latest print) showed the model working: sales +11%, record orders +23%, record backlog, adjusted operating margin 26.8% (+50bps), EMG operating income +33%.
2. The expert thesis — why the panel is (thinly) bullish (traceable)
Honesty first: AMETEK has almost no expert coverage in the Synthos KB. Total claims = 6, net-bullish voices = 1. This verdict is fundamentals- and quant-driven, not conviction-driven. There is no broad expert panel here — treat the "thesis" below as a single high-quality data point, not a chorus.
- The serial-acquirer / capital-allocation thread — Business Breakdowns (
business_breakdowns--daYqwbXSE0:5578bdd111, bullish, conviction 85, skill 1.0): "Management are excellent capital allocators — hundreds of acquisitions, never a goodwill write-off; buy/build differentiated cash-generative businesses." This is the whole bull case in one line, and it is corroborated by the numbers: FY23 goodwill impairment $0, a clean record, and ROIC ~11% on an acquisition-heavy balance sheet (70% of assets are goodwill/intangibles — see §5).
That is the only reconciled net-bullish claim. No high-skill macro or sector voice (of the kind that anchors the LLY note) covers AME. So the burden of proof falls entirely on the financials and the valuation math below — which is exactly why the verdict is a disciplined Watch, not a conviction Buy.
3. Synthos scores & the Bull / Base / Bear cases
The one-glance judgment — three scores, 0–10, each anchored to real metrics (not probabilities we can't honestly calibrate):
| Score | 0–10 | The read |
|---|---|---|
| Downside Risk (lower = safer) | 5 · Moderate | Net-debt/EBITDA 0.7×, beta 0.99, interest coverage 24×, tiny 3% max drawdown — financially very sturdy. Offsetting: 35× trailing / 23.5× EV/EBITDA on mid-single-digit growth leaves no valuation cushion, and it's cyclically tied to industrial/aero capex. |
| Growth Quality | 7 · High | 37% gross / 26% operating / 20% net margin, ROIC ~11%, ROE 14%, FCF conversion ~93% of net income, a durable serial-acquirer moat — but only ~6% forward EPS CAGR, which caps the score below the megacap compounders. |
| Exponential Potential | 3 · Low | Revenue CAGR FY25→FY30E ~5%, EPS ~6%, and the second derivative turns negative after 2026-27. A mature $54B name in a fragmented but slow-growing end-market — steady, not exponential. |
The three cases (our own scenario model — assumptions shown; each target is a ~12–18-month fair value). We deliberately do not attach probabilities: the base case is by definition the expected path, so a weighted blend would just restate it with false precision. Instead the cases bound the range, and the scores above summarize them.
| Case | Key assumptions | Fair value |
|---|---|---|
| Bull | Orders momentum (+23% Q1) sustains; M&A pipeline deploys the ~$1.7B FCF into accretive deals; organic re-accelerates. FY27E EPS beats to ~$9.20 (vs $8.80 cons); multiple holds premium ~30×. | ~$276 (+18%) |
| Base (our anchor) | Estimates roughly hit — FY27E EPS ~$8.80; a high-quality mid-single-digit compounder earns a ~26× multiple. | ~$232 (−1%) |
| Bear | Industrial/aero capex softens, M&A slows or a deal disappoints, tariffs bite; FY27E EPS misses to ~$8.30; multiple de-rates to ~22× as the growth premium unwinds. | ~$183 (−22%) |
Synthos fair value = the base case, ~$232 (−1%), with the full $183–$276 span as the honest range. Our anchor sits below the Street's $252.55 consensus: we think the market is already paying for the acquisition optionality, so the risk/reward is roughly symmetric-to-negative at today's price. This is a tracked call — the Forecaster Scorecard grades it once it matures.
4. Exponential Potential
Synthos separates compounders (durable high returns on capital) from exponentials (accelerating, multi-baggers-from-here). AME is a high-quality compounder with low exponential potential:
- Forward growth: revenue CAGR FY25→FY30E ~5.4% ($7.40B → $9.63B est); EPS CAGR ~6% ($7.37 FY25 adj-basis est → $9.91 FY30E est). Steady, single-digit.
- Acceleration (the 2nd derivative) is flat-to-negative: revenue growth is estimated at +8% (FY26E) → +6% (FY27E) → +6% (FY28E) → +3% (FY29E) → +4% (FY30E). Orders spiked +23% in Q1'26, which is the genuine bull tell, but the analyst path assumes that normalizes. Per our flagship philosophy we pick forward next-exponentials over trailing compounders — AME is squarely a compounder, not an accelerant.
- Room to run: AMETEK's end-markets (niche instruments, sensors, motion control) are fragmented and large in aggregate, which feeds the M&A runway — but organic category growth is GDP-plus, not exponential. At $54B the law of large numbers plus single-digit organic growth means no realistic multibagger path from here.
- Reinvestment runway (the one real lever): ~$1.7B annual FCF redeployed into accretive acquisitions is the engine that has historically turned ~5% organic into low-double-digit EPS growth over a cycle. If that engine keeps compounding, the bull case is where the upside lives — but it depends on deal availability and discipline, not a secular demand wave.
Exponential Potential: Low. Own it (if at all) for durable mid-single-digit-to-low-double-digit EPS compounding via disciplined M&A, not for a fast multibagger. This is a Core-quality industrial, never a Degen-tier name.
5. Financials (real numbers — FMP annual/quarterly)
- Revenue: FY25 $7.40B, +6.6% (FY24 $6.94B, +5.2% on FY23 $6.60B). Steady mid-single-digit growth, augmented by bolt-on M&A.
- Quarterly trajectory: Q1'25 $1.73B → Q2 $1.78B → Q3 $1.89B → Q4 $2.00B → Q1'26 $1.93B (+11.3% YoY). Q1'26 orders +23%, record backlog — the leading indicator is strong.
- Margins (best-in-class for the group): gross 36.6% TTM, operating 26.2%, EBITDA 31.1%, net 20.1%. Q1'26 adjusted operating margin 26.8%, up 50bps YoY with 160bps of core margin expansion.
- Earnings: net income $1.48B FY25 (+7.6%); GAAP diluted EPS $6.40; TTM P/E 35.3×. Adjusted EPS runs higher (FY25 adj-basis ~$7.37; Q1'26 adj EPS $1.97 vs GAAP $1.74 — the gap is acquisition-related intangible amortization).
- Cash flow: operating CF $1.80B, capex only −$130M (capex/revenue ~1.7% — asset-light), FCF $1.67B FY25, ~93% of operating CF and >100% of net income. Elite cash conversion.
- Balance sheet (fortress): total debt $2.34B, cash $0.46B, net debt $1.89B, net-debt/EBITDA ~0.7×, interest coverage ~24×. Note: goodwill + intangibles are $11.3B of $16.1B total assets (~70%) — the flip side of a serial acquirer; tangible book is negative. This is normal for the model but means book value is not a floor.
6. Valuation — priced in or room?
There is no way to call AME cheap: 35× trailing EPS, 7.3× EV/sales, 23.5× EV/EBITDA, ~5× book. FMP's letter rating is A- (strong on ROA/ROE, weak on P/E and P/B — i.e. great business, rich price). The bull's defense is the forward curve: on consensus EPS the P/E is 29× (FY26E) → 27× (FY27E) → ~24× (FY30E) — the multiple compresses slowly because growth is only mid-single-digit, so a flat price still leaves you paying a mid-20s multiple in 2030. That's the crux: unlike a fast grower, AME's multiple does not melt away with time.
A reverse read: at $234.62 the market is capitalizing ~$8.14 of FY26E adjusted EPS at ~29×, which prices in continued flawless execution and accretive M&A. Street targets (context): consensus $252.55, high $303, low $215. Our $232 base fair value is below consensus — we give less credit than the Street to the M&A optionality being underwritten at today's price. Not a value buy; a quality-industrial-at-a-full-price that we'd rather own 10–15% cheaper.
7. Technicals (from the tech block)
- Trend: up. $234.62 sits above the 50-DMA ($230.93) and 200-DMA ($214.10), with the 50 above the 200 (golden-cross posture). MACD +2.65 (positive).
- Location: −3.0% off the 52-week high ($241.94), +33% off the 52-week low ($176.44) — near highs, and the max drawdown from peak is only −3%. A calm, low-volatility uptrend.
- Momentum: RSI(14) 59 — firm but not overbought (<70), so no stretched-entry warning.
- Relative strength: AME +28.2% 12-mo vs SPY +20.6% (modest outperformance), but lagging QQQ +30.3%; +7.3% 3-mo vs SPY +13.7% and QQQ +22.0% — it has underperformed both over the last quarter. A steady industrial, not a momentum leader.
- Read: technicals are constructive but unremarkable — an orderly uptrend near highs. Nothing here forces a buy; a pullback toward the rising 200-DMA (~$214) would improve the risk/reward materially given our $232 base fair value.
8. Moat & competitive position
AMETEK's moat is operational and structural rather than a single product: (1) a decentralized serial-acquirer playbook — hundreds of niche acquisitions, disciplined pricing, and a clean record of never taking a goodwill write-off (business_breakdowns--daYqwbXSE0:5578bdd111); (2) niche market leadership — its instruments and devices are designed into long-cycle aerospace, process, and medical platforms with high switching costs; (3) margin engineering — the "AMETEK Growth Model" reliably lifts acquired-business margins, driving the 26%+ operating margin. The durable ~11% ROIC on a goodwill-heavy base is the proof the model compounds value, not just assets.
Peer set (market cap): the closest quality-compounder comp is Roper Technologies ($36.8B) — same serial-acquirer DNA. Broader industrial peers: Rockwell Automation ($52.5B), Otis ($28.1B), Carrier ($58.2B), Xylem ($28.1B), Ferguson ($44.7B), Fastenal ($55.8B), W.W. Grainger ($63.4B), Ferrovial ($48.8B). Symbotic ($4.9B) is a small, faster-growing outlier, not a true comp. AME trades at a premium multiple justified only by its margin and capital-allocation record.
9. Management, capital allocation & guidance
- Capital allocation: the whole thesis. ~$1.7B FCF/yr deployed primarily into accretive bolt-on M&A (FY25 acquisitions −$933M), plus a modest dividend (~0.6% yield, payout ~19%) and opportunistic buybacks (−$434M FY25). The explicit corporate objective is "double-digit percentage growth in EPS over the business cycle and a superior return on total capital."
- Insider activity: the sampled window (2026-03 to 2026-05) shows routine option-exercise, award, and small director activity — no cluster of alarming discretionary selling. Normal.
- Management's own guidance (half-weighted — their book): The SEC 8-K (Q1'26 earnings release, dated 2026-04-30) is a real earnings release and management raised full-year guidance. In management's own words: "For 2026, we now expect overall sales to be up high single digits… Adjusted earnings per diluted share are now expected to be in the range of $7.94 to $8.14, up 7% to 10% … an increase from our prior guidance range of $7.87 to $8.07." For Q2'26: sales up high single digits, adjusted EPS $1.96–$2.00 (up 10–12%). CEO Zapico cited "record backlog, momentum across attractive markets, and the proven strength… of the AMETEK Growth Model," and flagged "meaningful capital to deploy on strategic acquisitions." We half-weight this (management talks its own book), but the guidance raise plus record orders is a genuine positive signal.
10. Catalysts & what to watch
- Next earnings: 2026-07-30 (Q2'26; Street EPS $1.99, revenue ~$1.95B; management adj-EPS guide $1.96–$2.00). Watch organic growth vs orders — can the +23% Q1 order surge convert to sustained organic sales?
- M&A cadence: deal announcements and the multiples paid — the engine of the whole compounding story.
- Backlog & book-to-bill: the record backlog is the leading indicator; a rollover would be the first warning.
- End-market demand: aerospace, process/industrial, and semiconductor capex cycles.
- Margins: continued core margin expansion (160bps in Q1'26) vs tariff/input-cost pressure.
Thesis tripwires (what would change the call): two consecutive quarters of organic deceleration or a book-to-bill below 1; a large, expensive, out-of-pattern acquisition; core-margin compression; or a de-rating that finally brings the multiple back toward the mid-20s (which would flip us more constructive on price).
11. Key risks
- Valuation / de-rating (the primary risk): 35× trailing on mid-single-digit organic growth leaves no cushion; any growth or M&A disappointment can compress the multiple hard.
- M&A dependency: the compounding math relies on continuously finding and integrating accretive deals at sensible prices — deal scarcity or a costly misstep breaks the model.
- Cyclicality: industrial, aerospace, and semiconductor capex exposure ties results to the economic cycle.
- Tariffs / trade / FX: ~47% international revenue and a global supply chain; management explicitly flags tariffs, trade disputes, and supply-chain disruption as risk factors.
- Goodwill-heavy balance sheet: ~70% of assets are goodwill/intangibles and tangible book is negative — the clean write-off record is reassuring, but a bad-deal cycle would test it.
- Thin expert coverage: only 1 net-bullish KB voice (6 claims) — this is a quant/fundamentals call with no deep external conviction to lean on.
12. Verdict, position sizing & monitoring
Watch. AMETEK is a genuinely elite industrial compounder — 37% gross margin, 26% operating margin, ~93% FCF conversion, a 0.7× net-debt/EBITDA fortress balance sheet, and a decades-long serial-acquirer record with never a goodwill write-off (business_breakdowns--daYqwbXSE0:5578bdd111). Management just raised FY26 guidance on record orders (+23%) and record backlog. But at 35× trailing / 29× forward on ~6% EPS growth, our base-case fair value of ~$232 sits essentially at today's price and below the Street's $252.55 — the quality is real, and so is the full price. The right discipline is to wait for a better entry rather than pay up for perfection.
- Sizing: not a buy here. If already owned, treat as a ~2–3% quality-industrial holding and let it compound; new money should wait for a pullback toward the rising 200-DMA (~$214) or a de-rate toward a mid-20s multiple.
- Monitoring: re-underwrite on the §10 tripwires; formal re-score each earnings print. This verdict is logged as a tracked Synthos call as of 2026-07-03 at $234.62.
- Single biggest risk: multiple compression — a high-priced stock can fall hard even when the business is fine, if M&A or industrial demand slows.
Provenance & disclosures
- Traceability: 6 KB claims, breadth 1 net-bullish voice, top skill 1.0 (Business Breakdowns), last claim 2024-10-14 — the one cited claim (
business_breakdowns--daYqwbXSE0:5578bdd111) reconciles to a realclaim_id. Fabricated conviction is structurally impossible (claim-ID reconciliation). This is a fundamentals/quant-driven verdict, not a conviction-track call. - Data as-of: fundamentals 2026-03-31 (Q1'26) · estimates & prices 2026-07-02/03 · expert claim 2024-10-14. Forward figures are analyst consensus (FMP), labeled as estimates.
- Management caveat: the FY26 guidance in §9 is management's own book (SEC 8-K, 2026-04-30), half-weighted by design.
- Not investment advice. Independent research, educational and informational only, never personalized. Hypothetical/forward figures are labeled; the only performance numbers Synthos will headline are the live, real-money Flagship's.
- Version: 2026-07-03. Prior versions available via the deep-dive version dropdown ("based on the info at the time").