Amkor Technology (AMKR): Reassessing Valuation as Shares Climb 33% Over the Past 3 Months

Amkor Technology (AMKR) stock is drawing some fresh attention as investors revisit the company’s performance over the past few months. With the stock up 33% in the past 3 months, there is growing curiosity about what might be driving renewed interest.

See our latest analysis for Amkor Technology.

Momentum is clearly building for Amkor Technology, with the past 90 days seeing a sharp 33% share price return that stands out from a more modest 1-year total shareholder return of nearly 30%. The stock’s recent run suggests improved growth prospects and possibly a shift in how investors are weighing its future potential.

If you’re wondering what other stocks are catching investor attention, this is a great chance to broaden your search and discover fast growing stocks with high insider ownership

With shares surging lately and trading around 15% below the average analyst target, the question for investors is whether Amkor might be undervalued and primed for further gains or if future growth is already priced in.

Price-to-Earnings of 25.4x: Is it justified?

Amkor Technology is trading at a price-to-earnings ratio of 25.4x, notably lower than both the semiconductor industry average and its peer group. With its stock closing at $31.68, this suggests the market is not demanding as steep a premium for the company’s earnings as it does for comparable firms.

The price-to-earnings ratio (P/E) measures how much investors are willing to pay per dollar of earnings. For a semiconductor company like Amkor, the P/E ratio captures market expectations of future profit growth and reflects sector trends such as demand shifts and profitability cycles.

At 25.4x, Amkor’s P/E is well below the US semiconductor industry average of 34x and the peer group average of 36.6x. This comparison makes Amkor appear attractively valued, especially as the market could re-rate the stock closer to the estimated "fair" P/E ratio of 33x if company prospects improve further.

Explore the SWS fair ratio for Amkor Technology

Result: Price-to-Earnings of 25.4x (UNDERVALUED)

However, slowing revenue growth and any unexpected changes in sector demand could quickly alter investor sentiment and challenge the current valuation story.

Find out about the key risks to this Amkor Technology narrative.

Another View: What Does the SWS DCF Model Say?

While Amkor’s price-to-earnings ratio suggests value, the SWS DCF model offers a more cautious perspective. Based on future cash flow projections, our DCF analysis estimates fair value at $12.04. By this method, the current price appears overvalued. Could the market be expecting more growth than the cash flows support?

Look into how the SWS DCF model arrives at its fair value.

Simply Wall St performs a discounted cash flow (DCF) on every stock in the world every day (check out Amkor Technology for example). We show the entire calculation in full. You can track the result in your watchlist or portfolio and be alerted when this changes, or use our stock screener to discover 879 undervalued stocks based on their cash flows. If you save a screener we even alert you when new companies match - so you never miss a potential opportunity.

Build Your Own Amkor Technology Narrative

If you want to look beyond the numbers or have a different perspective, you can jump in and craft your own narrative in just a few minutes, so why not Do it your way

A good starting point is our analysis highlighting 3 key rewards investors are optimistic about regarding Amkor Technology.

Looking for More Investment Opportunities?

Smart investors seize every edge. Don’t wait on the sidelines while others act. Tap into powerful ideas tailored to the market’s hottest trends and unlock new potential for your portfolio.

• Boost your income potential by targeting stocks offering impressive yields with these 16 dividend stocks with yields > 3%, which stand out for reliable payouts in any market.
• Tap into cutting-edge companies transforming healthcare with these 31 healthcare AI stocks, where AI innovation is driving breakthroughs and offering early-mover advantage.
• Ride the surge of digital assets by checking out these 82 cryptocurrency and blockchain stocks, spotlighting businesses reshaping finance with blockchain and cryptocurrency expertise.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com