Amphenol CorporationAPHNYSE

Overview Intelligence Charts News Fundamentals Key Metrics TTM Financials Earnings Growth Rating Analysts Institutional Peers Historical

DCF Valuation

DCF Valuation Summary

Hold

Fair Value: $134.60 per share(market-calibrated)

-0.4%

Upside to Fair Value

Current

$135.16

Pure Model

$132.61

Fair Value

$134.60

Bull Case

$181.78

Bear Case

$93.52

Market Reality Check

Model Terminal Growth

3.75%

Market-Implied Growth

5.78%

Calibrated Growth

4.05%

Fair value uses 85% model / 15% market-implied terminal growth. Pure model: $132.61.

What's Driving This Ratingfor APH

✓

CapEx already efficient

CapEx at 2.41% of revenue is already at or below sector maintenance level. No normalization needed — cash conversion is already strong.

↑

Margin expansion modeled

Current EBIT margin is 21.53% — below the sector mature average of 25.86%. Model expands margins as the business scales and operating leverage kicks in. Year 10 EBIT reaches $13.2B (24.09% margin).

⚠

Analyst growth decelerates sharply

Revenue growth drops from 35.62% in Year 1 to 3.75% by Year 5 (per analyst consensus). This growth deceleration is a key reason the model may undervalue the stock if growth re-accelerates.

↔

Perpetuity and exit methods disagree

Perpetuity growth gives $95.05/share (19.1x terminal FCF) while exit multiple gives $170.17/share (41.7x terminal FCF). The 28x EV/EBITDA exit reflects current market multiples, while the perpetuity method with 3.75% growth is more conservative. The base case averages both methods.

🎯

Market pricing in higher long-term growth

To justify $135.16, the market implies 5.78% perpetual growth — 203bps above the model's 3.75%. This suggests the market sees additional growth catalysts (AI, new products, market expansion) not captured in analyst estimates.

✓

Strong cash flow conversion

Year 10 FCF/EBITDA conversion of 67.07% indicates efficient cash generation. FCF reaches $9.7B by Year 10 (17.72% FCF margin).

Weighted Average Cost of Capital (WACC)

Cost of Equity (CAPM)

Risk-Free Rate (Rf)4.50%

Beta (β)1.21

Market Risk Premium4.50%

*Using current implied premium (4.5% per Damodaran 2026), not historical (6.5%)

Cost of Equity (Re)9.95%

Cost of Debt

Pre-tax Cost of Debt1.25%

Tax Rate23.13%

After-tax Cost of Debt0.96%

Equity Weight (E/V)91.40%

Debt Weight (D/V)8.60%

WACC Calculation

WACC = (E/V × Re) + (D/V × Rd × (1-Tc))

WACC = (91.40% × 9.95%) + (8.60% × 0.96%)

= 9.17%

10-Year Free Cash Flow Projections(showing years 1, 3, 5, 7, 10)

Year	Year 1	Year 3	Year 5	Year 7	Year 10
Revenue	$31.3B	$38.0B	$45.7B	$49.2B	$54.9B
EBIT	$6.7B	$8.2B	$10.2B	$11.4B	$13.2B
Tax	$1.6B	$1.9B	$2.3B	$2.6B	$3.1B
NOPAT	$5.2B	$6.3B	$7.8B	$8.8B	$10.2B
+ Depreciation	$730M	$885M	$1.1B	$1.1B	$1.3B
- Capex	$754M	$914M	$1.1B	$1.2B	$1.3B
- Δ NWC	$1.6B	$598M	$329M	$355M	$396M
Free Cash Flow	$3.5B	$5.7B	$7.4B	$8.4B	$9.7B
Discount Factor	0.916	0.769	0.645	0.541	0.416
Present Value	$3.2B	$4.3B	$4.8B	$4.5B	$4.0B

FCF Formula: Free Cash Flow = NOPAT + Depreciation - Capex - Change in Net Working Capital

Terminal Value Calculation

Perpetuity Growth Method

Year 10 FCF$9.7B

Terminal Growth Rate3.75%

WACC9.17%

TV = FCF₁₀ × (1+g) / (WACC-g)

Terminal Value$186.3B

PV of Terminal Value$77.4B

Exit Multiple Method

Year 10 EBITDA$14.5B

Exit Multiple (EV/EBITDA)28.0x

TV = EBITDA₁₀ × Exit Multiple

Terminal Value$406.3B

PV of Terminal Value$169.0B

Valuation Summary

Perpetuity Growth Method

PV of Projected FCFs$42.7B

PV of Terminal Value$77.4B

Enterprise Value$120.2B

(-) Net Debt$4.4B

Equity Value$115.8B

Shares Outstanding1.2B

Price per Share$95.05

Exit Multiple Method

PV of Projected FCFs$42.7B

PV of Terminal Value$169.0B

Enterprise Value$211.7B

(-) Net Debt$4.4B

Equity Value$207.3B

Shares Outstanding1.2B

Price per Share$170.17

Pure Model Fair Value

$132.61

Average of perpetuity growth and exit multiple methods (before market calibration)

Sensitivity AnalysisPrice per Share

WACC ↓ / Growth →	2.75%	3.25%	3.75%	4.25%	4.75%
7.17%	$165.22	$171.40	$179.38	$190.09	$205.22
8.17%	$143.89	$147.58	$152.10	$157.78	$165.12
9.17%	$127.40	$129.78	$132.61	$136.01	$140.17
10.17%	$114.04	$115.66	$117.54	$119.74	$122.34
11.17%	$102.86	$104.02	$105.33	$106.83	$108.56

How to read: This table shows how the valuation changes with different WACC (discount rate) and terminal growth rate assumptions. Green = undervalued, Red = overvalued.

Scenario Analysis

Bear Case

$93.52

-30.8% vs current

• -25% vs analyst consensus
• Terminal growth: 3.3%
• Beta: 1.51

Base Case

$132.61

-1.9% vs current

• Analyst consensus
• Terminal growth: 3.8%
• Beta: 1.21

Bull Case

$181.78

34.5% vs current

• +25% vs analyst consensus
• Terminal growth: 4.3%
• Beta: 1.03

Key Assumptions & Drivers• Technology Sector

Growth Assumptions (Select Years)

Year 1 Revenue Growth35.62%

Year 3 Revenue Growth8.56%

Year 5 Revenue Growth3.75%

Year 7 Revenue Growth3.75%

Year 10 Revenue Growth3.75%

Terminal Growth Rate3.75%

Margin & Efficiency

Current EBIT Margin21.53%

Terminal EBIT Margin25.86%

Tax Rate23.13%

Historical Capex / Rev2.41%

NWC / Revenue19.95%

Key Drivers: Revenue growth, operating margin expansion, capex efficiency, and working capital management are the primary drivers of cash flow generation. Terminal value assumptions significantly impact final valuation.

Institutional-Grade Methodology

Actual Company Data: Revenue, EBIT, Capex, NWC, Tax Rate, Interest Expense, Beta

Market Assumptions: Risk-free: 4.5% (10Y), MRP: 4.5% (Damodaran 2026), Exit: 28x EV/EBITDA (Technology sector)

This DCF model is for informational purposes only. Projections are based on assumptions that may not materialize. Past performance does not guarantee future results. Consult a financial advisor before making investment decisions.

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