Amphenol CorporationAPHNYSE

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

DCF Valuation

DCF Valuation Summary

Hold

Fair Value: $133.97 per share(market-calibrated)

-9.3%

Upside to Fair Value

Current

$147.73

Pure Model

$131.59

Fair Value

$133.97

Bull Case

$180.24

Bear Case

$92.82

Market Reality Check

Model Terminal Growth

3.75%

Market-Implied Growth

6.22%

Calibrated Growth

4.12%

Fair value uses 85% model / 15% market-implied terminal growth. Pure model: $131.59.

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 $93.89/share (18.9x terminal FCF) while exit multiple gives $169.29/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 $147.73, the market implies 6.22% perpetual growth — 247bps 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)92.07%

Debt Weight (D/V)7.93%

WACC Calculation

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

WACC = (92.07% × 9.95%) + (7.93% × 0.96%)

= 9.23%

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	0.915	0.767	0.643	0.539	0.414
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%

WACC9.23%

TV = FCF₁₀ × (1+g) / (WACC-g)

Terminal Value$184.2B

PV of Terminal Value$76.2B

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$168.0B

Valuation Summary

Perpetuity Growth Method

PV of Projected FCFs$42.6B

PV of Terminal Value$76.2B

Enterprise Value$118.7B

(-) Net Debt$4.4B

Equity Value$114.4B

Shares Outstanding1.2B

Price per Share$93.89

Exit Multiple Method

PV of Projected FCFs$42.6B

PV of Terminal Value$168.0B

Enterprise Value$210.6B

(-) Net Debt$4.4B

Equity Value$206.2B

Shares Outstanding1.2B

Price per Share$169.29

Pure Model Fair Value

$131.59

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%
7.23%	$163.74	$169.71	$177.39	$187.65	$202.04
8.23%	$142.77	$146.36	$150.75	$156.24	$163.31
9.23%	$126.51	$128.84	$131.59	$134.89	$138.93
10.23%	$113.31	$114.90	$116.73	$118.88	$121.41
11.23%	$102.24	$103.38	$104.66	$106.12	$107.82

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

$92.82

-37.2% vs current

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

Base Case

$131.59

-10.9% vs current

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

Bull Case

$180.24

22.0% 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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