Amphenol's Q1 25 results boost share price and analyst’s targets

Published: 2025-06-17 02:51:08 ET APH

Published on 06/17/2025 at 02:51, updated on 06/17/2025 at 06:08

By Maya Patel

Amphenol Corporation released its Q1 25 results on April 23, 2025, including a remarkable 47.7% y/y increase in revenue to $4,811m. Operating income surged 49.7% y/y to $1,024.8m, with margins expanding by 27bp to 21.3%. Net profit rose 34% y/y to $737.8m. Following these strong results, Fox Advisors and Goldman Sachs updated their target prices for Amphenol to $110 and $102, respectively. The announcement led to an 8.2% rise in the share's price on the results day, with the stock increasing 21.7% since then.

Amphenol Corporation, established in 1932 and headquartered in Connecticut, US, specializes in designs, manufactures, and sells connectors, interconnect systems, antennas, sensors, and specialty cables. Serving diverse markets including automotive, aerospace, and telecommunications, Amphenol produces products such as cable assemblies and printed circuit boards, contributing to strong growth in revenue and profitability.

The company has approximately 125,000 employees and operates across three main segments: Communications Solutions (42% of FY 24 revenue), Harsh Environment Solutions (29%), and Interconnect and Sensor Systems (29%). Revenue distribution by geography is as follows: United States (35%), China (23%), and other regions (42%).

The company says that while it has successfully capitalized on numerous growth opportunities, the current economic and geopolitical environment remains uncertain. Assuming stable market conditions and constant exchange rates, Amphenol anticipates Q2 25 sales to range between $4.9bn and $5bn, reflecting a y/y increase of 36% to 39%. Adjusted diluted EPS is expected to be between $0.64 and $0.66, representing a 45% to 50% y/y rise.

During Q1 25, the company completed two acquisitions, including the Andrew Business from CommScope, for approximately $2,172.2m. The Andrew Business was integrated into the Communications solutions segment, while the other acquisition was added to the Harsh environment solutions segment. These acquisitions were funded through a combination of cash on hand, proceeds from the October senior notes, and borrowings under the US commercial paper program. Likewise, in 2024, the company acquired CIT and another entity for approximately $2,156.4m, both of which were included in the Harsh Environment Solutions segment.

Amphenol Corporation posted a strong revenue CAGR of 11.9% over FY 21-24, reaching $15.2bn. Operating income increased at a CAGR of 15.1% over the same period, reaching $3.3bn in FY 24, with margins expanding by 176bp to 21.7%. Net income rose at a CAGR of 15.1% to $2.4bn in FY 24.

Consistent growth in net profit led to positive FCF over FY 21-24, reaching $1.8bn in FY 24 from $0.9bn in FY 21. Cash and equivalent reached $3.3bn at end-FY 24, reflecting a robust increase from $1.2bn at end-FY 21. The group's total debt rose to $7.3bn at end-FY 24, compared to $5.1bn at end-FY 21. In addition, total debt to equity improved from 79.2% to 73.9%.

In comparison, Jabil Inc., its local peer, reported almost a flat revenue CAGR of minus 0.5% over the past three years to $28.9bn in FY 24. Operating income increased at a CAGR of 9.9% to $1.5bn in FY 24. However, net income outperformed over the same period, rose at a CAGR of 25.9% to reach $1.4bn in FY 24.

Over the past 12 months, the company's stock has delivered impressive returns of approximately 36.8%. In comparison, Jabil Inc. delivered higher returns of about 51.3%.

Amphenol Corporation is currently trading at a P/E of 35.2x, based on FY 25 estimated EPS of $2.7, which is higher than its 3-year historical average of 31x, but lower than Jabil Inc. (39.6x). In terms of EV/EBIT, the company is currently trading at 24.8x, based on FY 25 estimated EBIT of $4,728m, which is lower than its 3-year historical average of 23x and Jabil Inc.’s valuation of 13.5x.

Amphenol Corporation is generally liked by 17 analysts, with eight having ‘Buy’ ratings, four having ‘Outperform’ ratings and five having ‘Hold’ ratings for an average target price of $92.1. Note that the stock is currently trading at around its target price.

Their views are further supported by an anticipated revenue CAGR of 15.4% over FY 24-27, reaching $23,407m. In addition, analysts estimate EBIT CAGR of 19.2% to $5,587m, with margins expanding by 218bp to 23.9% in FY 27. Net profit CAGR of 18.5%, reaching $4,029m with margins expanding by 129bp to17.2% in FY 27, with EPS expected to increase to $3.3 in FY 27 from $1.9 in FY 24. Likewise, analysts estimate EBIT CAGR of 3.7% but net profit to drop at a CAGR of minus 13.7% for Jabil Inc.

Overall, Amphenol Corporation's impressive Q1 25 results, marked by significant revenue and profit growth, have led to increased share prices and updated analyst targets. The company's strategic acquisitions and robust financial performance, including a strong revenue CAGR and positive free cash flow, highlight its market strength.

However, the company is prone to some risks, including operational risks, such as supply chain interruptions, variations in raw material costs, and the potential effects of global trade tensions. Moreover, swift technological progress may necessitate ongoing investment in R&D to remain competitive, while cybersecurity threats present a substantial risk to operations and the security of proprietary data.

Maya Patel