Assessing Amkor Technology (AMKR) Valuation After Recent Share Price Momentum

Amkor Technology (AMKR) shares rose 6% in the latest trading session, drawing attention from investors curious about what is driving the move. The company has shown steady financial performance over the past year, which may influence continued interest.

See our latest analysis for Amkor Technology.

Amkor Technology’s strong 33% share price return over the past 90 days highlights building momentum, especially as the stock consolidates a 24% total shareholder return in the past year. The latest move suggests investors are warming up to Amkor’s growth narrative and may be adjusting their risk expectations in light of the company’s recent performance.

If you’re intrigued by these outsized semiconductor moves, it’s a great moment to branch out and discover fast growing stocks with high insider ownership

But with shares up more than 30% over the past quarter and trading about 14% below analyst price targets, investors must now ask if Amkor is still undervalued or if the market has already priced in its future growth.

Price-to-Earnings of 25.7x: Is it justified?

Amkor Technology is trading at a price-to-earnings ratio of 25.7x, positioning it as good value relative to recent closing prices and industry benchmarks.

The price-to-earnings (P/E) ratio reflects how much investors are willing to pay for each dollar of earnings. For semiconductor companies, the P/E ratio is essential as it encapsulates both expected growth and perceived risk within a volatile market segment.

Amkor’s P/E of 25.7x is notably lower than the US Semiconductor industry average of 33.7x and also below its peer group average of 35.7x. This suggests that the market may be underestimating the company’s future earnings potential compared to its competitors. Importantly, regression-based fair value checks indicate that a fair P/E ratio for Amkor could be 32.8x. This indicates possible room for multiple expansion as performance continues.

Explore the SWS fair ratio for Amkor Technology

Result: Price-to-Earnings of 25.7x (UNDERVALUED)

However, shifts in industry demand or unexpected earnings volatility could challenge Amkor’s momentum and cause investors to reassess the company’s valuation story.

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

Another View: Discounted Cash Flow Raises New Questions

While Amkor looks undervalued based on its price-to-earnings ratio, our SWS DCF model paints a different picture. The DCF suggests Amkor’s shares are trading above its estimated fair value. This raises the question: is the recent rally getting ahead of the fundamentals?

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 917 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 see the story differently or want to dig into the data yourself, you can build your own view in just a few minutes, and Do it your way.

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

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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.

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