AMETEK has been treading water for the past six months, recording a small return of 1% while holding steady at $180.97. The stock also fell short of the S&P 500’s 7.1% gain during that period.

Is now the time to buy AMETEK, or should you be careful about including it in your portfolio? Check out our in-depth research report to see what our analysts have to say, it’s free.

Why Is AMETEK Not Exciting?

We're swiping left on AMETEK for now. Here are three reasons why we avoid AME and a stock we'd rather own.

1. Core Business Falling Behind as Demand Plateaus

We can better understand Internet of Things companies by analyzing their organic revenue. This metric gives visibility into AMETEK’s core business because it excludes one-time events such as mergers, acquisitions, and divestitures along with foreign currency fluctuations - non-fundamental factors that can manipulate the income statement.

Over the last two years, AMETEK failed to grow its organic revenue. This performance was underwhelming and implies it may need to improve its products, pricing, or go-to-market strategy. It also suggests AMETEK might have to lean into acquisitions to accelerate growth, which isn’t ideal because M&A can be expensive and risky (integrations often disrupt focus).

2. Projected Revenue Growth Is Slim

Forecasted revenues by Wall Street analysts signal a company’s potential. Predictions may not always be accurate, but accelerating growth typically boosts valuation multiples and stock prices while slowing growth does the opposite.

Over the next 12 months, sell-side analysts expect AMETEK’s revenue to rise by 2.1%, a slight deceleration versus its 6.5% annualized growth for the past five years. This projection doesn't excite us and indicates its products and services will see some demand headwinds.

3. Free Cash Flow Margin Dropping

If you’ve followed StockStory for a while, you know we emphasize free cash flow. Why, you ask? We believe that in the end, cash is king, and you can’t use accounting profits to pay the bills.

As you can see below, AMETEK’s margin dropped by 2.1 percentage points over the last five years. If its declines continue, it could signal increasing investment needs and capital intensity. AMETEK’s free cash flow margin for the trailing 12 months was 24.7%.

Final Judgment

AMETEK isn’t a terrible business, but it doesn’t pass our bar. With its shares trailing the market in recent months, the stock trades at 25× forward P/E (or $180.97 per share). This valuation tells us it’s a bit of a market darling with a lot of good news priced in - we think there are better stocks to buy right now. We’d suggest looking at a dominant Aerospace business that has perfected its M&A strategy.

Stocks We Would Buy Instead of AMETEK

Donald Trump’s victory in the 2024 U.S. Presidential Election sent major indices to all-time highs, but stocks have retraced as investors debate the health of the economy and the potential impact of tariffs.

While this leaves much uncertainty around 2025, a few companies are poised for long-term gains regardless of the political or macroeconomic climate, like our Top 5 Growth Stocks for this month. This is a curated list of our High Quality stocks that have generated a market-beating return of 183% over the last five years (as of March 31st 2025).

Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,545% between March 2020 and March 2025) as well as under-the-radar businesses like the once-small-cap company Exlservice (+354% five-year return). Find your next big winner with StockStory today.

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