# AMETEK Inc. (AME) — Financial Analysis

**Exchange:** NYSE  
**Coverage as of:** 2026-Q2  
**Updated:** 2026-05-28  
**Tier:** Free primer (step 2 of 19)  
**Sibling pages:** /stocks/AME/thesis · /stocks/AME/memo

## Financial Snapshot

---
source: coverage-next-full
type: step
step: 04
title: Financial Snapshot & Quality
ticker: AME
generated: 2026-05-28
---

### Step 04 — Financial Snapshot & Quality: AMETEK

#### 1. Executive Summary
AMETEK's reported P&L is **high quality** — minimal one-time items in recent years (2021-2025), no aggressive revenue recognition policies, low DSO, modest goodwill impairment risk despite ~45% of assets in goodwill. Adjustments are mostly de minimis (acquisition-related amortization, restructuring, integration costs — typical for an acquirer). FCF conversion (FCF/NI) consistently >100%, with 2025 at ~113%, reflecting capital-light business model relative to revenue. The most material judgment items are (1) ~$7.2B in goodwill against $10.6B of equity — large but supported by 12.8% ROIC and continuing portfolio cash generation; (2) pension obligations with funded status that swings 200-300bps year to year; (3) ~$1B in net intangibles being amortized over 10-20 years. **Adversarial sweep: clean** — no active investigations, no material lawsuits beyond routine, no short-seller reports of substance.

#### 2. Key Data Points

**Income Statement Quality (FY2021–FY2025)** [S1][S2]

| Metric | FY2021 | FY2022 | FY2023 | FY2024 | FY2025 |
|---|---:|---:|---:|---:|---:|
| Revenue | 5,547 | 6,151 | 6,597 | 6,941 | 7,401 |
| GAAP Op Income | 1,309 | 1,501 | 1,707 | 1,780 | 1,910 |
| Adj Op Income | ~1,460 | ~1,640 | ~1,840 | ~1,920 | ~2,005 |
| GAAP Net Income | 990 | 1,160 | 1,313 | 1,376 | 1,480 |
| Adj Net Income | ~1,100 | ~1,260 | ~1,420 | ~1,495 | ~1,720 |
| GAAP EPS Dil | 4.25 | 5.01 | 5.67 | 5.93 | 6.40 |
| Adj EPS | 4.71 | 5.45 | 6.13 | 6.43 | 7.43 |
| OCF | 1,160 | 1,149 | 1,735 | 1,829 | 1,802 |
| FCF | 1,050 | 1,010 | 1,599 | 1,702 | 1,672 |

**Quality Ratios** [S1][S2]
- FCF / Net Income (FY25): 113% — very strong conversion
- OCF / Revenue (FY25): 24.3% — top-tier industrial
- Receivables DSO (FY25): ~52 days — stable
- Inventory days (FY25): ~85 days — slight inflation post-Paragon
- Capex / D&A (FY25): ~0.5x — capital-light vs. heavy industrial peers (1.0-1.5x typical)
- Cash conversion cycle: ~95 days — typical instruments

**GAAP-to-Adjusted Bridge (FY2025)** [S2]
- GAAP EPS: $6.40
- + Acquisition-related amortization: ~$0.80
- + Acquisition transaction costs: ~$0.15
- + Pension non-service costs: ~$0.05
- + Restructuring: ~$0.03
- = Adj EPS: ~$7.43

#### 3. Adversarial Research Sweep

**Short reports / activist filings:** None identified. No 13D filings of activist character. No prominent short-seller reports (Muddy Waters, Hindenburg, etc.) targeting AMETEK in recent years. Short interest stable at low single digits %.

**SEC investigations / enforcement:** No active material SEC matters disclosed in FY2024 or FY2025 10-K filings. Routine periodic filing without restatements.

**Lawsuits / litigation:** Routine litigation in normal course (product liability, IP). Most-recent 10-K filings disclose no contingent loss accruals materially impacting financial statements.

**Accounting concerns:** None flagged.
- Goodwill impairment testing performed annually; no impairment in 2024 or 2025.
- Revenue recognition under ASC 606 standard — no aggressive recognition patterns flagged.
- Effective tax rate stable (~20%) across years; no major tax controversy.

**Whistleblower / FCPA:** No active matters disclosed.

**Aggressive M&A accounting:** Bolt-on acquisitions are accounted for at fair value with allocations to identifiable intangibles, goodwill. Amortization patterns appropriate. ROIC tracking validates that purchased revenue is materializing (ROIC ~13%; cost of capital ~8%).

**Pension obligations** [S1]
- DB pension funded status: ~85% (FY2025 estimate)
- Underfunded by ~$200-300M; offset by overfunded UK plan
- Manageable; not a stress point

**Verdict: CLEAN.** No material adversarial flags. Quality of earnings holds up to scrutiny. The most fair criticism is the size of goodwill ($7.2B) relative to equity ($10.6B) — but ROIC ramp and consistent cash generation defend the carrying value.

#### 4. Sustainable Earnings View

**Adjusted EPS trajectory (5-year)** [S2]

| FY | Adj EPS | YoY% |
|---|---:|---:|
| 2021 | $4.71 | +14% |
| 2022 | $5.45 | +16% |
| 2023 | $6.13 | +12% |
| 2024 | $6.43 | +5% |
| 2025 | $7.43 | +16% |
| **5yr CAGR** | | **+12.0%** |

**Quality of growth assessment:**
- Organic + M&A combined revenue +6-8%/yr → translates to ~12% EPS via margin expansion + buyback + tax efficiency
- This is the AMETEK Growth Model algorithm working as designed
- No accounting "stretch" required to hit these numbers

#### 5. Financial Sufficiency for Forecast

**PASS for forecast.** Sustainable earnings power is well-supported by:
- 9 years of clean GAAP-to-adjusted bridge
- FCF conversion >100% over 5-year period
- Margin trajectory consistent across business cycles (no margin collapse in 2020)
- Tax rate stable

#### 6. Risks & Watchpoints (quality layer)
- **Goodwill carrying value at $7.2B** — would need broad portfolio impairment to materially hit equity
- **Capitalized M&A intangibles** — being amortized; $2-3B remaining; ~$240M/yr drag on GAAP
- **Pension underfunding** — manageable but watchable in rising-rate or down-cycle scenarios
- **Acquisition accounting opacity** — common across compounder peers; reasonable disclosure quality at AMETEK

#### 7. Adjustments to Reported P&L (recommended for valuation)
- Add back acquisition amortization to operating income (since these are real, not capital-destroying expenses — ROIC validates this)
- Treat restructuring as recurring (~$25-50M/yr typical)
- Pension non-service costs: pass-through (volatile)

#### 8. Source Index
[S1] AMETEK 10-K FY2025 (filed 2026-02-17), MD&A and footnotes.
[S2] AMETEK Q4 2025 + Q1 2026 8-K earnings releases (GAAP-to-adjusted reconciliations).
[S3] Tavily web search — no adversarial flags identified, retrieved 2026-05-28.

---
ADVERSARIAL_SWEEP: CLEAN
FCF_CONVERSION: >100%
NEXT: Step 05 — Quarterly Momentum

## Deeper Financial Analysis

The fundamental tier ($1.00) adds 8 dimensions not included here:

- Revenue Breakdown — segment revenue, geographic mix, product-line margins
- Financial Trends — QoQ momentum, leading indicators, inflection points
- Balance Sheet — debt structure, dilution risk, working capital dynamics
- Capital Allocation — ROIC, buyback cadence, reinvestment efficiency
- Earnings Analysis — beats/misses, guidance vs actuals, transcript highlights
- Competitive Positioning — market share, pricing power, peer benchmarks
- Industry Context — TAM, sector tailwinds/headwinds, regulatory backdrop

**API endpoint:** GET /api/v1/research/AME/fundamental

## Navigation

- Overview: /stocks/AME
- Financials (this page): /stocks/AME/financials
- Thesis: /stocks/AME/thesis
- Investment Memo: /stocks/AME/memo
- Coverage universe: /stocks