Amphenol APH shares gained more than 8% following its impressive fourth-quarter 2024 results announced on Wednesday. The company's shares closed at $78.55 on Thursday.

In a week, Amphenol shares have gained more than 13%, outperforming the broader Zacks Computer & Technology sector’s return of 2.6% and the Zacks Electronics Connectors industry’s appreciation of 12.1%. The momentum is expected to continue in the first quarter of 2025.

Amphenol expects first-quarter 2025 earnings between 49 cents and 51 cents per share, indicating growth in the range of 23%-28% year over year. Revenues are anticipated to be between $4 billion and $4.10 billion, suggesting growth in the 23-26% range. 

In the fourth quarter of 2024, APH reported adjusted earnings of 55 cents per share, which beat the Zacks Consensus Estimate by 10% and increased 34.1% year over year.

Net sales increased 30% year over year to $4.32 billion, beating the consensus mark by 7.01%. Organically, net sales increased 20% year over year. This growth was driven by strong performance across nearly all markets, with notable growth in the Communication Solutions and Harsh Environment Solutions segments.

APH’s Earnings Estimates Trend Higher

The Zacks Consensus Estimate for first-quarter 2025 earnings is pegged at 47 cents per share, unchanged over the past 30 days. This indicates 17.5% growth from the year-ago quarter’s reported figure.

The consensus mark for first-quarter 2025 revenues is pegged at $3.94 billion, indicating year-over-year growth of 20.89%.

Find the latest EPS estimates and surprises on Zacks Earnings Calendar.

APH’s earnings beat the Zacks Consensus Estimate in the trailing four quarters, the average surprise being 8.53%.

The Zacks Consensus Estimate for 2025 revenues is pegged at $17.14 billion, indicating year-over-year growth of 12.60%.

The consensus mark for 2025 earnings is pegged at $2.17 per share, up 1.87% over the past 30 days. This indicates 14.81% growth year over year.

APH Rides on Diversified Business, Buyouts

APH is benefiting from higher revenues across the IT datacom, mobile networks, broadband, defense, commercial air, and mobile devices automotive end markets. It also benefited from APH’s acquisition program.

In the fourth quarter of 2024, APH saw record orders of $5.14 billion, up 58% from the prior year, resulting in a book-to-bill ratio of 1.16:1. The strong orders were primarily driven by increased demand from data centers, especially due to investments in artificial intelligence by several large customers.

Amphenol’s strong portfolio of solutions, diversified business model and accretive acquisitions have been major growth drivers for its success. This has helped APH shares gain 55.8% in the trailing 12-month period, outperforming the broader Zacks Computer & Technology sector’s return of 28.6% and the Zacks Electronics Connectors industry’s appreciation of 54.8%.

APH Beats Sector, Industry

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APH has also outperformed its peers like TE Connectivity TEL, which is also making strong efforts in technology innovation, product quality, and customer service. TEL shares have returned 0.1%, over the trailing six-month period.

Acquisitions Boost Amphenol’s Prospects

Acquisitions have helped APH strengthen its product offerings and expand its customer base. In the fourth quarter of 2024, APH benefited from strategic acquisitions, such as Carlisle Interconnect Technologies (“CIT”) from Carlisle Companies CSL and Luetze US and Europe. These acquisitions expanded the company’s technological capabilities and increased its market position.

The acquisition of CIT bolstered APH’s capabilities in high-performance interconnect solutions, especially for aerospace, defense, and medical markets.

The acquisition of Luetze US and Europe expanded APH’s footprint in the industrial automation and electrical engineering sectors. This move allowed APH to tap into new markets and offer more comprehensive solutions to customers across various industries, thus diversifying its reach.

APH’s strategic acquisition efforts are continuing, as evidenced by the agreement to acquire CommScope’s COMM mobile networks businesses for $2.1 billion, including the Outdoor Wireless Networks and Distributed Antenna Systems segments. 

With the deal expected to close in the first half of 2025, this acquisition from CommScope will strengthen APH’s position in wireless communications, particularly in the 5G market, further solidifying its leadership in this space.

Here’s Why Amphenol is a Buy

Amphenol is trading at a premium, as suggested by the Value Score of D.

In terms of the forward 12-month Price/Earnings, APH is trading at 36.04X, higher than the sector’s 27.77X.

Price/Earnings (P/E) F12M

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However, Amphenol’s strong portfolio and acquisitions drive top-line growth and justify a premium valuation.

Amphenol stock currently carries a Zacks Rank #2 (Buy) and has 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 (Strong Buy) stocks here.

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Amphenol Corporation (APH) : Free Stock Analysis Report

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