Unveiling the Investment Potential of Amkor Technology Inc (AMKR): A Comprehensive Analysis of ...
Amkor Technology Inc (NASDAQ:AMKR) has recently been in the spotlight, drawing interest from investors and financial analysts due to its robust financial stance. With shares currently priced at 22.52, Amkor Technology Inc has witnessed a decline of 1.23% over a period, marked against a three-month change of -12.56%. A thorough analysis, underlined by the GuruFocus Score Rating, suggests that Amkor Technology Inc is well-positioned for substantial growth in the near future.
Decoding the GF Score
The GF Score is a stock performance ranking system developed by GuruFocus using five aspects of valuation, which has been found to be closely correlated to the long-term performances of stocks by backtesting from 2006 to 2021. The stocks with a higher GF Score generally generate higher returns than those with a lower GF Score. Therefore, when picking stocks, investors should invest in companies with high GF Scores. The GF Score ranges from 0 to 100, with 100 as the highest rank.
Amkor Technology Inc's GF Score components are as follows:
1. Financial strength rank: 7/10
2. Profitability rank: 9/10
3. Growth rank: 10/10
4. GF Value rank: 6/10
5. Momentum rank: 10/10
Each one of these components is ranked and the ranks also have positive correlation with the long term performances of stocks. The GF score is calculated using the five key aspects of analysis. Through backtesting, we know that each of these key aspects has a different impact on the stock price performance. Thus, they are weighted differently when calculating the total score. With high ranks in profitability, growth, and momentum, and decent ranks in financial strength and GF value, GuruFocus assigned Amkor Technology Inc the GF Score of 95 out of 100, which signals the highest outperformance potential.
Understanding Amkor Technology Inc's Business
Amkor Technology Inc, with a market cap of $5.53 billion and sales of $6.92 billion, is a provider of outsourced semiconductor packaging and test services to integrated device manufacturers, fabless semiconductor companies, and contract foundries. The firm's products are organized into two streams: advanced products, including flip chip, wafer-level processing and testing services; and mainstream products, including wirebond packaging and testing. Roughly a third of the firm's revenue is generated in the United States, with the rest coming from China, Ireland, Japan, Malaysia, Taiwan, Singapore, and countries across the world.
Financial Strength Breakdown
According to the Financial Strength rating, Amkor Technology Inc's robust balance sheet exhibits resilience against financial volatility, reflecting prudent management of capital structure. The Interest Coverage ratio for Amkor Technology Inc stands impressively at 11.42, underscoring its strong capability to cover its interest obligations. This robust financial position resonates with the wisdom of legendary investor Benjamin Graham, who favored companies with an interest coverage ratio of at least 5. With a favorable Debt-to-Revenue ratio of 0.19, Amkor Technology Inc's strategic handling of debt solidifies its financial health.
Profitability Rank Breakdown
The Profitability Rank shows Amkor Technology Inc's impressive standing among its peers in generating profit. Amkor Technology Inc Operating Margin has increased (111.55%) over the past five years, as shown by the following data: 2018: 5.98; 2019: 5.75; 2020: 9.05; 2021: 12.44; 2022: 12.65. Furthermore, Amkor Technology Inc's Gross Margin has seen a consistent rise over the past five years, as evidenced by the data: 2018: 16.46; 2019: 16.03; 2020: 17.84; 2021: 19.97; 2022: 18.75. This trend underscores the company's growing proficiency in transforming revenue into profit. Amkor Technology Inc's strong Predictability Rank of 5.0 stars out of five underscores its consistent operational performance, providing investors with increased confidence.
Growth Rank Breakdown
Ranked highly in Growth, Amkor Technology Inc demonstrates a strong commitment to expanding its business. The company's 3-Year Revenue Growth Rate is 19.5%, which outperforms better than 68.25% of 863 companies in the Semiconductors industry. Moreover, Amkor Technology Inc has seen a robust increase in its earnings before interest, taxes, depreciation, and amortization (EBITDA) over the past few years. Specifically, the three-year growth rate stands at 25.4, and the rate over the past five years is 11. This trend accentuates the company's continued capability to drive growth.
Conclusion
Given the company's robust financial strength, impressive profitability, and strong growth metrics, the GuruFocus Score Rating highlights Amkor Technology Inc's unparalleled position for potential outperformance. This analysis underscores the importance of comprehensive financial evaluation in making informed investment decisions. GuruFocus Premium members can find more companies with strong GF Scores using the following screener link: GF Score Screen
This article first appeared on GuruFocus.
