Enterprise Value to FCFF (EV/FCFF)
Free Cash Flow to The Firm (FCFF)
Amphenol Corp., FCFF calculation
US$ in thousands
Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).
A consistent upward trajectory is observed in both net cash provided by operating activities and free cash flow to the firm (FCFF) over the five-year period ending December 31, 2023. While the initial three years exhibited relative stability with a minor contraction in 2021, the subsequent two years show significant acceleration in cash generation capabilities.
- Operating Cash Flow Growth
- Net cash provided by operating activities increased from 1,502,300 thousand US dollars in 2019 to 2,528,700 thousand US dollars in 2023. This represents an overall growth of approximately 68.3%. The most substantial growth occurred between 2021 and 2023, where operating cash flow rose by roughly 66% in just two fiscal years.
- Free Cash Flow to the Firm (FCFF) Performance
- FCFF followed a similar pattern to operating cash flow, starting at 1,305,415 thousand US dollars in 2019 and reaching 2,262,356 thousand US dollars by 2023. A temporary decline was noted in 2021, where FCFF dropped to 1,256,049 thousand US dollars, before rebounding sharply to 1,892,515 thousand US dollars in 2022 and continuing its ascent into 2023.
- Cash Flow Conversion Efficiency
- The relationship between operating cash flow and FCFF remained tight throughout the period, indicating a consistent proportion of operating cash being retained after accounting for the firm's capital requirements. In 2023, FCFF represented approximately 89.5% of net cash provided by operating activities, a slight improvement over the 86.9% observed in 2019, suggesting efficient management of capital expenditures relative to operational cash growth.
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Interest Paid, Net of Tax
Amphenol Corp., interest paid, net of tax calculation
US$ in thousands
Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).
2 2023 Calculation
Cash paid during the year for interest, tax = Cash paid during the year for interest × EITR
= 129,200 × 20.70% = 26,744
The analysis of net interest expenditures between 2019 and 2023 indicates a general upward trajectory, characterized by a temporary contraction in 2020 followed by consistent annual growth. The stability of the effective income tax rate suggests that the increase in net cash outflows for interest is primarily attributable to underlying changes in debt service obligations rather than variations in the corporate tax shield.
- Interest Expenditure Trends
- Cash paid for interest, net of tax, decreased from 90,715 thousand US dollars in 2019 to 83,316 thousand US dollars in 2020. Subsequently, a steady upward trend was established, with expenditures rising to 88,849 thousand US dollars in 2021, 96,115 thousand US dollars in 2022, and reaching 102,456 thousand US dollars by 2023. This represents an overall increase of approximately 13% over the five-year period.
- Effective Income Tax Rate (EITR) Analysis
- The EITR exhibited minimal volatility, fluctuating within a narrow range between 20.50% and 22.30%. After starting at 22.20% in 2019, the rate dipped to 20.50% in 2020, peaked at 22.30% in 2022, and settled at 20.70% in 2023. The lack of significant movement in the tax rate confirms that the growth in net interest paid is not the result of changing tax efficiencies.
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Enterprise Value to FCFF Ratio, Current
Amphenol Corp., current EV/FCFF calculation, comparison to benchmarks
| Selected Financial Data (US$ in thousands) | |
| Enterprise value (EV) | 75,093,168) |
| Free cash flow to the firm (FCFF) | 2,262,356) |
| Valuation Ratio | |
| EV/FCFF | 33.19 |
| Benchmarks | |
| EV/FCFF, Competitors1 | |
| Apple Inc. | 50.88 |
| Arista Networks Inc. | 58.13 |
| Cisco Systems Inc. | 33.55 |
| Dell Technologies Inc. | 39.75 |
| Lumentum Holdings Inc. | 244.68 |
| Super Micro Computer Inc. | — |
| EV/FCFF, Sector | |
| Technology Hardware & Equipment | 49.21 |
| EV/FCFF, Industry | |
| Information Technology | 84.39 |
Based on: 10-K (reporting date: 2023-12-31).
1 Click competitor name to see calculations.
If the company EV/FCFF is lower then the EV/FCFF of benchmark then company is relatively undervalued.
Otherwise, if the company EV/FCFF is higher then the EV/FCFF of benchmark then company is relatively overvalued.
Enterprise Value to FCFF Ratio, Historical
Amphenol Corp., historical EV/FCFF calculation, comparison to benchmarks
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Enterprise value (EV)1 | 65,267,267) | 51,530,855) | 51,525,792) | 41,535,814) | 33,635,356) | |
| Free cash flow to the firm (FCFF)2 | 2,262,356) | 1,892,515) | 1,256,049) | 1,411,216) | 1,305,415) | |
| Valuation Ratio | ||||||
| EV/FCFF3 | 28.85 | 27.23 | 41.02 | 29.43 | 25.77 | |
| Benchmarks | ||||||
| EV/FCFF, Competitors4 | ||||||
| Apple Inc. | 27.21 | 22.40 | 26.45 | 24.67 | — | |
| Arista Networks Inc. | 39.01 | 89.98 | 38.47 | — | — | |
| Cisco Systems Inc. | 10.98 | 13.55 | 15.50 | — | — | |
| Dell Technologies Inc. | 34.88 | 6.45 | 9.28 | — | — | |
| Lumentum Holdings Inc. | 72.26 | 14.52 | 8.11 | — | — | |
| Super Micro Computer Inc. | 21.06 | — | 25.04 | — | — | |
| EV/FCFF, Sector | ||||||
| Technology Hardware & Equipment | 24.97 | 20.80 | 23.54 | — | — | |
| EV/FCFF, Industry | ||||||
| Information Technology | 33.99 | 26.47 | 27.37 | — | — | |
Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).
3 2023 Calculation
EV/FCFF = EV ÷ FCFF
= 65,267,267 ÷ 2,262,356 = 28.85
4 Click competitor name to see calculations.
The financial trajectory between 2019 and 2023 is characterized by a substantial increase in total enterprise value and a general expansion of free cash flow to the firm, although the valuation multiple experienced significant volatility during this period.
- Enterprise Value Expansion
- A consistent upward trend in enterprise value is observed, rising from 33,635,356 thousand US$ in 2019 to 65,267,267 thousand US$ by 2023. This represents a near doubling of the company's total value over the five-year horizon, with a brief period of stagnation occurring between 2021 and 2022.
- Free Cash Flow to the Firm Performance
- Free cash flow to the firm exhibited a general growth pattern, increasing from 1,305,415 thousand US$ in 2019 to 2,262,356 thousand US$ in 2023. While a slight contraction occurred in 2021, this was followed by a sharp acceleration in cash flow generation during 2022 and 2023.
- EV/FCFF Ratio Dynamics
- The EV/FCFF ratio demonstrated a non-linear progression. The ratio climbed from 25.77 in 2019 to a peak of 41.02 in 2021, indicating a period where enterprise value grew at a rate significantly outpacing cash flow generation. A correction occurred in 2022, with the ratio dropping to 27.23, driven by a substantial increase in FCFF while enterprise value remained flat. The ratio stabilized at 28.85 in 2023, suggesting a more balanced alignment between the company's valuation and its capacity to generate free cash flow.
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