What Recent Expansion Means for Amkor Technology Stock After Its 23% 2025 Surge

If you are trying to figure out what to do next with Amkor Technology stock, you are not alone. With this semiconductor packaging giant, every uptick and dip makes headlines among investors looking for the next big growth story, and there is a lot to unpack. Over the past five years, Amkor’s shares have skyrocketed by more than 190%, driven by long-term trends like soaring demand for mobile devices, automotive electronics, and advanced computing solutions. More recently, a 23% gain year-to-date and a solid 8.1% increase over the past month have people wondering if the latest wave is the start of something bigger or just another twist in an already exciting journey.

What is fueling this momentum now? Lately, the spotlight has been on Amkor’s global expansion efforts, including new facility investments and strategic partnerships to support customers looking for advanced packaging solutions. These moves are strengthening its role in the global supply chain and indicate confidence about future demand for its technologies.

Still, in today’s market, understanding whether a high-flying stock like Amkor is undervalued or overvalued matters more than just following the latest headlines. If we focus on the numbers, Amkor ranks with a valuation score of 3 out of 6, reflecting that it is undervalued on half the checks that matter most to value investors. But should that be the last word on whether the stock is worth a look? Not quite. Let’s break down the valuation methods behind that score and look for even better ways to make sense of Amkor’s real potential.

Why Amkor Technology is lagging behind its peers

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

The Discounted Cash Flow (DCF) model estimates a company's intrinsic value by forecasting its future cash flows and then discounting them back to today in order to account for the time value of money. For Amkor Technology, this approach extrapolates expected Free Cash Flow performance over the coming decade, using a combination of analyst projections and long-term estimates.

Currently, Amkor generates Free Cash Flow of approximately $248 million. Analysts expect some near-term volatility, with Free Cash Flow projected to dip to $121.95 million by 2026 but rebound to $196.8 million by 2027. Simply Wall St then extrapolates further, estimating Free Cash Flow to reach about $195.9 million by 2035. All estimates use the US dollar.

Based on these cash flow projections and discounted back using the two-stage Free Cash Flow to Equity model, Amkor Technology’s intrinsic value comes out to $7.79 per share. Compared to its current share price, this valuation suggests Amkor is trading at a substantial 310.7 percent premium to its estimated worth, which may indicate that the stock is significantly overvalued by this metric.

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 310.7%. Find undervalued stocks or create your own screener to find better value opportunities.

Approach 2: Amkor Technology Price vs Earnings (PE)

The Price-to-Earnings (PE) ratio is a popular valuation metric for profitable companies because it connects a company’s stock price directly to its earnings performance, helping investors gauge how much they are paying for each dollar of profit. A “normal” or “fair” PE ratio for a company is influenced by expectations for future earnings growth and the perceived risk of its business. Higher growth and lower risk usually justify a higher PE multiple, while slower growth or higher risk push the ratio lower.

Amkor Technology is currently trading at a PE ratio of 26x. In comparison, its industry peers in the semiconductor space average 39.3x, and the broader industry sits at 37.6x, both considerably higher than Amkor’s current multiple. This might initially suggest Amkor is priced attractively, but context is key.

To provide more clarity beyond peer or industry averages, Simply Wall St’s Fair Ratio evaluates what would be a reasonable multiple for Amkor by factoring in not just growth, but also margins, size, and risk profile. For Amkor, the Fair PE Ratio is 32.3x, reflecting its own unique characteristics rather than just broad-brush comparisons. Because the Fair Ratio accounts for all these company-specific elements, it offers a more customized and reliable benchmark.

Comparing Amkor’s current PE of 26x with the Fair Ratio of 32.3x, the stock appears undervalued in this view, as it is trading below where its fundamentals indicate it could be.

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 there is an even better way to understand valuation, so let's introduce you to Narratives. In simple terms, a Narrative is your own investment story for a company, linking your perspective on its future, such as what you believe about Amkor Technology’s revenue growth, earnings potential, and profit margins, to a transparent, dynamic financial forecast and resulting fair value.

Unlike static ratios or numbers, Narratives connect a business’s story to the numbers behind your investment decisions. On Simply Wall St’s Community page, millions of investors build and share Narratives, making it easy and accessible for anyone to turn their outlook into a clear valuation, whether you see robust growth or significant risks ahead.

You can use Narratives to decide when to buy or sell by comparing your own Fair Value against the current market price, and as new earnings or news arrive, these views are instantly updated, always reflecting the latest information. For example, in the case of Amkor Technology, one investor's Narrative might focus on accelerating AI adoption and margin expansion, leading to a bullish price target of $30. Another, more cautious investor might emphasize margin risks and cyclical headwinds, resulting in a bearish target of $19. The key takeaway is that Narratives offer a powerful, adaptable framework for investors to understand not just what a company is worth, but why, helping you move beyond the headlines to craft an investment thesis you truly believe in.

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.

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