Amphenol Stock Before Q1 Earnings: Smart Buy or Risky Move?

Amphenol APH is set to report its first-quarter 2025 results on April 23.The company expects first-quarter 2025 earnings between 49 cents and 51 cents per share, indicating growth of 23-28% year over year. The Zacks Consensus Estimate for first-quarter earnings has been steady at 52 cents per share over the past 30 days, suggesting 30% growth from the figure reported in the year-ago quarter.Amphenol’s earnings beat the Zacks Consensus Estimate in all the trailing four quarters, the average surprise being 8.53%. (See the Zacks Earnings Calendar to stay ahead of market-making news.) Amphenol Corporation Price and Consensus Amphenol Corporation price-consensus-chart | Amphenol Corporation Quote Let’s see how things have shaped up for the upcoming announcement.APH’s Q1 Revenues to Grow Y/YAmphenol expects first-quarter 2025 revenues between $4 billion and $4.10 billion, suggesting year-over-year growth in the 23-26% range. The Zacks Consensus Estimate for first-quarter revenues is pegged at $4.19 billion, indicating an increase of 28.55% from the figure reported in the year-ago quarter.Amphenol’s to-be-reported quarter’s results are expected to benefit from a robust order backlog, strong sales growth driven by acquisitions, and increased demand for the company’s solutions in the defense and commercial aerospace sectors.APH’s strong order backlog is likely to have contributed positively to sales in the to-be-reported quarter. Amphenol reported record orders of $5.14 billion in the fourth quarter of 2024, resulting in a robust book-to-bill ratio of 1.16:1.APH’s Q1 Results to Ride on AcquisitionsAcquisitions have expanded its high technology and value-added interconnect product offerings to end markets, including defense, commercial aerospace and industrial product offerings. Top-line growth is expected to be reflected by this trend.Strong contributions from the acquisitions, including CIT (Carlisle Interconnect Technologies)  and Lutze US, are expected to enhance Amphenol’s product offerings and sales capabilities in the next quarter, especially in high-technology interconnect products.APH’s growth prospects are also bolstered by strong demand for AI technologies in the IT datacom market and increased investments in the defense sector. This trend is likely to have boosted the company’s top line during the first quarter.APH Shares Beat Sector, IndustryAmphenol shares have declined 6.3% year to date (YTD), outperforming the Zacks Electronics Connectors industry’s fall of 6.6% and the Zacks Computer and Technology sector’s drop of 17.1%. On a trailing 12-month basis, Amphenol shares have returned 16.4%, outperforming the sector and industry’s return of 16% and 2.8%, respectively.APH has outperformed broader sector peers, including Methode Electronics MEI, TE Connectivity TEL, and Littelfuse LFUS YTD. Methode Electronics, Littelfuse, and TE Connectivity shares have declined 51.7%, 34.7% and 9.6%, respectively. On a trailing 12-month basis, Methode Electronics, Littelfuse, and TE Connectivity shares have declined 49.7%, 32.8% and 10.1%, respectively.APH Performance Chart Image Source: Zacks Investment Research APH stock 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 26.84X, higher than the sector’s 21.7X.Price/Earnings (F12M) Image Source: Zacks Investment Research Strong Portfolio, Acquisitions Aid APH’s ProspectsExpanding spending on both current and next-generation defense technologies bodes well for APH’s top-line growth. Apart from Defense, Amphenol’s prospects ride on strong demand for its solutions across Commercial Air, Industrial and Mobile devices. Strong demand for jetliners and next-gen aircraft is bullish for the commercial aerospace segment. Acquisitions have helped APH strengthen its product offerings and expand its customer base. The CIT acquisition expanded Amphenol’s footprint across defense, commercial air and industrial end markets. The Lutze business strengthens APH’s broad offering of high-technology interconnect products for industrial markets and expands the range of value-added interconnect products. The acquisition of CommScope’s Outdoor Wireless Networks and Distributed Antenna Systems businesses expands Amphenol’s footprint in the areas of base station antennas, related interconnect solutions, and distributed antenna systems.Here’s Why Amphenol is a HoldAmphenol’s strong portfolio is a major driver. Its diversified business model lowers the volatility of individual end markets and geographies. However, tariffs on electronic components could increase production costs, potentially slowing growth and affecting profit margin of Amphenol.Apart from a stretched valuation, APH shares are trading below the 50-day and 200-day moving averages, indicating a bearish trend.APH Trades Below 50-Day & 200-Day SMAs Image Source: Zacks Investment ResearchAmphenol currently has a Zacks Rank #3 (Hold), which implies investors should wait for a more favorable point to accumulate the stock. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.Zacks' Research Chief Names "Stock Most Likely to Double"Our team of experts has just released the 5 stocks with the greatest probability of gaining +100% or more in the coming months. Of those 5, Director of Research Sheraz Mian highlights the one stock set to climb highest.This top pick is among the most innovative financial firms. With a fast-growing customer base (already 50+ million) and a diverse set of cutting edge solutions, this stock is poised for big gains. Of course, all our elite picks aren’t winners but this one could far surpass earlier Zacks’ Stocks Set to Double like Nano-X Imaging which shot up +129.6% in little more than 9 months.Free: See Our Top Stock And 4 Runners UpWant the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Amphenol Corporation (APH): Free Stock Analysis Report TE Connectivity Ltd. (TEL): Free Stock Analysis Report Methode Electronics, Inc. (MEI): Free Stock Analysis Report Littelfuse, Inc. (LFUS): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks