3 Reasons APH Has Explosive Upside Potential

Since September 2024, Amphenol has been in a holding pattern, posting a small return of 0.6% while floating around $65.52.

Given the underwhelming price action, is now a good time to buy APH? Or should investors expect a bumpy road ahead? Find out in our full research report, it’s free.

Why Is APH a Good Business?

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 is one signal of its overall quality. Any business can experience short-term success, but top-performing ones enjoy sustained growth for years. Luckily, Amphenol’s sales grew at an exceptional 13.1% compounded annual growth rate over the last five years. Its growth surpassed 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

Analyzing the long-term change in earnings per share (EPS) shows whether a company's incremental sales were profitable – for example, revenue could be inflated through excessive spending on advertising and promotions.

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 think Amphenol is one of the best business services companies out there, but at $65.52 per share (or 30.4× forward price-to-earnings), is now the right time to buy the stock? See for yourself in our comprehensive research report, it’s free.

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