Should Investors Rethink Amkor Technology After its 23% Surge and Industry Tailwinds in 2025?

Trying to figure out what to do with Amkor Technology stock? You are not alone. Whether you have watched AMKR from the sidelines or are re-evaluating your position, the journey has been anything but dull. The stock’s performance over the past year has been a story of resilience and surprising momentum shifts. After a flat 1-year return of just 0.3%, Amkor has roared back with a 22.8% jump in the last month and a solid 13.7% gain year-to-date. That kind of surge is enough to get anyone’s attention, especially when you look back and see the stock has more than doubled over the last five years, up 181.3%.

Much of this renewed optimism comes as the broader semiconductor industry adjusts to dynamic supply chain shifts and increased demand from sectors like automotive and mobile. Investors seem newly confident that Amkor’s niche in outsourced semiconductor packaging and testing positions the company for future growth, without sending risk soaring in the process.

Of course, price movement is only part of the story. When we dig into valuation, Amkor scores a 3 out of 6 on our undervalued criteria. That means it ticks half the boxes analysts track for attractive pricing, but leaves room for discussion about what’s truly a fair price in this changing sector. Next, let’s break down these valuation methods, and stay tuned for a smarter, holistic way to understand exactly what the numbers are telling us.

Why Amkor Technology is lagging behind its peers

Approach 1: Amkor Technology Discounted Cash Flow (DCF) Analysis

The Discounted Cash Flow (DCF) model is a fundamental valuation approach that estimates a company's intrinsic value by projecting its future cash flows and discounting them back to today's value. Essentially, it answers what the business is truly worth based on its expected ability to generate cash in the years ahead.

For Amkor Technology, analysts estimate the most recent Free Cash Flow at $248 million. While direct analyst forecasts extend only a few years out, further cash flow projections up to ten years are extrapolated by Simply Wall St's platform. Notably, these projections span a range. By 2027, Free Cash Flow is expected to reach about $197 million, and the ten-year outlook anticipates levels fluctuating between $122 million and $196 million per year according to the model.

Applying the DCF approach with this data and discounting all future flows yields an estimated intrinsic value of $7.82 per share. With the current share price significantly higher, this implies the stock is around 278.2% overvalued based on these projections.

Result: OVERVALUED

Head to the Valuation section of our Company Report for more details on how we arrive at this Fair Value for Amkor Technology.

Our Discounted Cash Flow (DCF) analysis suggests Amkor Technology may be overvalued by 278.2%. Find undervalued stocks or create your own screener to find better value opportunities.

Approach 2: Amkor Technology Price vs Earnings

The Price-to-Earnings (PE) ratio is a widely used valuation metric for profitable companies like Amkor Technology because it ties the company’s market value directly to its bottom-line earnings. This makes it especially helpful for retail investors seeking to gauge whether a stock’s price reflects its real profit-generating ability.

Growth expectations and risk are central in determining what is a “normal” or “fair” PE ratio for any given stock. Generally, companies with higher expected growth and lower risk command higher PE ratios, while those facing more uncertainty or slower growth trade at lower ratios.

Amkor currently trades at a PE of 24.1x. That is notably lower than the semiconductor industry average of 35.4x and also under the peer group average of 33.3x. However, benchmarks only tell part of the story. Simply Wall St’s proprietary “Fair Ratio” for Amkor is 30.4x, which adjusts for the company’s unique earnings growth, profit margins, market capitalization, sector, and risk factors.

Unlike comparisons with industry averages or peers, the Fair Ratio provides a tailored benchmark, reflecting Amkor’s specific growth outlook and risk profile. This means it more accurately signals if the current valuation is justified, rather than just comparing raw numbers with the rest of the sector.

Comparing Amkor’s current PE ratio of 24.1x to its Fair Ratio of 30.4x suggests the stock is trading at a discount to what is considered a justified value for its fundamental profile.

Result: UNDERVALUED

PE ratios tell one story, but what if the real opportunity lies elsewhere? Discover companies where insiders are betting big on explosive growth.

Upgrade Your Decision Making: Choose your Amkor Technology Narrative

Earlier we mentioned that there is an even better way to understand valuation, so let’s introduce you to Narratives. A Narrative is essentially your story of what you believe about a company, paired with your assumptions about its future revenue, earnings, and margins, all of which combine to estimate a fair value for the stock.

Instead of relying solely on rigid formulas, Narratives let investors articulate how and why they see a company's future unfolding, and then translate that view into a practical financial forecast. On Simply Wall St’s Community page, millions of investors use Narratives as an accessible tool to connect their big-picture perspective with the numbers, bridging the gap between what a business is doing and what its stock is worth.

With Narratives, you can test your investment thesis: as you or the market receive new information, Narratives dynamically update your forecasts and fair value, so you can immediately see if and how your buy-or-sell decision should change based on the relationship between your Fair Value and the current Price.

For example, one Amkor Technology Narrative might predict strong AI-driven growth and set a fair value as high as $30, while another, more cautious outlook focused on margin pressure and export risks might land closer to $19. This helps you decide which story and valuation you believe most aligns with reality.

Do you think there's more to the story for Amkor Technology? Create your own Narrative to let the Community know!

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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