APH Stock Trades Higher Than Industry at 33.84X P/E: Should You Buy?

Core Insights - Amphenol (APH) shares are trading at a premium with a Value Score of D, reflecting a forward 12-month price-to-earnings (P/E) ratio of 33.84X, which is higher than the broader Zacks Computer and Technology sector at 27.97X and peers TE Connectivity (22.11X) and RF Industries (29.45X) [1][7]. Stock Performance - Year-to-date (YTD), APH shares have increased by 59.2%, outperforming the broader sector's return of 15.4%. However, it has underperformed RF Industries (87.2% YTD) while outperforming TE Connectivity (45.4% YTD) [4][6]. Order Growth and Market Position - Amphenol reported strong order growth of 36% year-over-year, reaching $5.523 billion, resulting in a book-to-bill ratio of 0.98:1 in Q2 2025. The growth is attributed to its expanding portfolio in fiber optic, power, antenna, and sensor technologies across datacom, aerospace, and defense markets [5][7]. Acquisitions and Revenue Contribution - The company is actively expanding its portfolio through acquisitions, which contributed 15% to its revenues in the first half of 2025. Notable acquisitions include CommScope's Connectivity and Cable Solutions (CCS) for $10.5 billion and Trexon for approximately $1 billion, enhancing Amphenol's capabilities in the IT datacom market [14][16][17]. Financial Health and Cash Flow - Amphenol maintains strong liquidity with total liquidity of $6.2 billion, including $3.2 billion in cash and short-term investments. In Q2 2025, operating cash flow was $1.417 billion, representing 130% of net income, while free cash flow was $1.122 billion, or 103% of net income [18][19]. Earnings Estimates - For Q3 2025, Amphenol anticipates earnings between 77 cents and 79 cents per share, indicating a year-over-year growth of 54% to 58%. Revenues are expected to be between $5.4 billion and $5.5 billion, suggesting growth in the range of 34% to 36% [20][21]. Conclusion - Amphenol's diversified end-market exposure, expanding interconnect portfolio, and effective acquisition strategy support solid growth visibility, justifying its premium valuation. The company currently holds a Zacks Rank 1 (Strong Buy) and a Growth Score of B, indicating a strong investment opportunity [22].