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

Amphenol APH shares are trading at a premium, as suggested by a Value Score of D. 

In terms of the forward 12-month price-to-earnings (P/E), APH is trading at 33.84X, higher than the broader Zacks Computer and Technology sector and peers, including TE Connectivity TEL and RF Industries RFIL. The broader sector is trading at 27.97X while TE Connectivity and RF Industries trade at 22.11X and 29.45X, respectively.

APH Stock’s Valuation

Meanwhile, APH shares have jumped 59.2% year to date (YTD), outperforming the broader sector’s return of 15.4%. The company has outperformed TE Connectivity but underperformed RF Industries, YTD. Shares of TE Connectivity and RF Industries have returned 45.4% and 87.2%, respectively.

Amphenol is benefiting from strong order growth, which jumped 36% year over year and 4% sequentially to $5.523 billion, resulting in a book-to-bill ratio of 0.98:1 in the second quarter of 2025. Amphenol’s expanding portfolio of fiber optic, power, antenna and sensor technologies continues to gain traction across datacom, aerospace and defense markets.

APH Stock’s YTD Performance

The stock is currently trading above the 50-day and the 200-day moving averages, indicating a bullish trend.

APH Stock Trades Above the 50-Day & 200-Day SMAs

So, should investors buy APH stock at the current level? Let’s find out.

Strong Portfolio and Acquisitions Aid APH’s Prospects

Rising AI workloads and cloud infrastructure upgrades are fueling demand for high-speed interconnects. This momentum is expected to support APH’s Communications Solutions segment. Electrification in transportation and rising electronic content in medical devices are driving the adoption of Amphenol’s cable assemblies and sensor-based systems. These drivers are expected to support steady growth in the Interconnect and Sensor Systems segment. 

Amphenol continues to expand its portfolio and market reach through targeted acquisitions across communications, medical and defense verticals. Acquisitions contributed 15% to Amphenol’s first half of 2025 revenues. Plethora of acquisitions — CIT, Lutze, CommScope’s COMM Andrew business, LifeSync, Narda-MITEQ, XMA and Q Microwave — have been driving Amphenol’s prospects.

In early August, Amphenol announced a definitive agreement to acquire CommScope’s Connectivity and Cable Solutions (CCS) business for $10.5 billion in cash. The deal expands Amphenol’s interconnect product capabilities in the fast-growing IT datacom market. The CCS acquisition will diversify Amphenol’s broad portfolio of fiber optic and other interconnect product solutions in the communications networks and industrial markets. The CCS business is expected to have sales and EBITDA margins of approximately $3.6 billion and 26% in 2025, respectively.

Amphenol also announced a definitive agreement to acquire Trexon for approximately $1 billion in cash. Trexon is expected to have 2025 sales and EBITDA margins of approximately $290 million and 26%, respectively.

Strong Liquidity to Boost APH’s Growth Trajectory

Amphenol generates solid cash flow, which allows management the opportunity to invest in product innovations, acquisitions and business development. In the second quarter of 2025, operating cash flow was $1.417 billion or 130% of net income, while free cash flow was $1.122 billion or 103% of net income.

Total liquidity at the end of the second quarter was $6.2 billion, including cash and short-term investments on hand of $3.2 billion plus availability under Amphenol’s existing credit facilities.

In second-quarter 2025, the company purchased 2 million shares for $160 million and also paid dividends worth $200 million. Amphenol expects to deliver a strong cash flow in the near term despite a slight rise in capital expenditure as it increases spending on defense and IT datacom markets.

APH’s Q3 Earnings Estimate Revision Trend Positive

For third-quarter 2025, Amphenol expects earnings between 77 cents and 79 cents per share, indicating growth between 54% and 58% year over year. Revenues are anticipated between $5.4 billion and $5.5 billion, suggesting growth in the 34-36% range.
 

Amphenol Corporation Price and Consensus

Amphenol Corporation price-consensus-chart | Amphenol Corporation Quote

The Zacks Consensus Estimate for third-quarter 2025 earnings is pegged at 79 cents per share, up a couple of cents over the past 30 days and indicating 58% growth over the year-ago quarter’s reported figure. The consensus mark for third-quarter 2025 revenues is pegged at $5.48 billion, suggesting 35.6% growth from the year-ago quarter’s reported figure.

Conclusion

Amphenol’s diversified end-market exposure, expanding interconnect portfolio and strong acquisition execution continue to support solid growth visibility. These factors justify a premium valuation.

APH currently sports a Zacks Rank #1 (Strong Buy) and a Growth Score of B, a favorable combination that offers a strong investment opportunity, per the Zacks Proprietary methodology. You can see the complete list of today’s Zacks #1 Rank stocks here.

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This article originally published on Zacks Investment Research (zacks.com).

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