Should Amphenol Stock Be in Your Portfolio Before Q3 Earnings?

Core Insights - Amphenol (APH) is expected to report third-quarter 2025 results on October 22, with earnings projected between 77 cents and 79 cents per share, reflecting a year-over-year growth of 54% to 58% [1][9] - The company anticipates revenues for the same quarter to be between $5.4 billion and $5.5 billion, indicating a year-over-year growth of 34% to 36% [2][9] Earnings and Revenue Estimates - The Zacks Consensus Estimate for third-quarter 2025 earnings is steady at 79 cents per share, suggesting a 58% increase from the previous year [1] - The Zacks Consensus Estimate for revenues is pegged at $5.48 billion, indicating a 35.6% increase from the year-ago quarter [2] Performance Trends - Amphenol has consistently beaten the Zacks Consensus Estimate in the last four quarters, with an average surprise of 16.25% [5] - The company's order backlog surged 36% year over year to $5.52 billion in the second quarter, contributing to a healthy revenue momentum [8] Growth Drivers - Key factors driving Amphenol's Q3 results include sustained investments in artificial intelligence (AI) infrastructure, defense modernization spending, and contributions from recent acquisitions [7][9] - The company has seen strong demand across diversified end markets, particularly in defense, commercial aerospace, and IT datacom segments [10] Strategic Acquisitions - Amphenol's acquisitions, including CIT, Lutze, and CommScope's Andrew business, have bolstered its market presence and sales in various sectors [7][18] - The recent agreement to acquire CommScope's Connectivity and Cable Solutions business for $10.5 billion is expected to enhance Amphenol's capabilities in the IT datacom market, with projected sales of $3.6 billion in 2025 [19] - The acquisition of Trexon for approximately $1 billion is also anticipated to contribute significantly to Amphenol's growth, with expected sales of $290 million in 2025 [20] Stock Performance - Amphenol shares have appreciated 81% year-to-date, outperforming the Zacks Computer and Technology sector's return of 23.1% [11] - The stock is trading at a premium, with a forward 12-month price/earnings ratio of 37.12X, higher than the broader sector's 29.07X [15] Conclusion - Amphenol's growth prospects are supported by AI-driven demand in the IT datacom market, strategic acquisitions, and steady demand in defense and commercial aerospace sectors, justifying its premium valuation [21]