Allied Motion Technologies Inc (US:AMOT) reported fourth quarter and full year results on Tuesday post market, with the precision and specialty motion control producer delivering 25% annual sales growth to $503 million for 2022.

Organic growth for the company was around 12% on a constant currency basis with management attributing strong demand to the Industrial, Aerospace and Defense end markets.

For the final quarter of 2022, Allied Motion generated 35% sales growth to $131.1 million with figures also ahead of analyst polled forecasts of around $126 million. On a constant currency basis, sales grew 18.3% over Q4 of 2021.

The group’s underlying profits as measured by adjusted EBITDA grew 47% to $16.6 million from $11.3 million in the previous year. That beat the consensus of $15.8 million.

Allied’s adjusted net income expanded at an even-faster pace of 58% to $6.9 million or 43 cents per share for Q4, below market forecasts expecting a figure of around 52 cents. A chart shows the EPS surprise beat and misses over a five-year horizon.

In addition to the solid growth, Allied told investors that it hit a record-high backlog of $330.1 million at the end of the year, up $20 million on Q3.

AMOT’s Chairman and CEO Dick Warzala was notably bullish in his remarks on the company outlook, stating “While heightened levels of macroeconomic and geopolitical uncertainty remain, we believe we are in a strong position and are confident we can continue to execute our strategy by capitalizing on the many growth opportunities and positive underlying demand trends within our targeted markets.”

To be sure, while underlying trends for the company remain strong, it is hard to foresee sustained share price momentum with the stock already having recovered all of its early 2022 losses. AMOT shares are up 23.5% year-to-date and have almost doubled from the 52-week low point of $21.14 reached in late May.

However, it’s what we see on the Fintel Financial Metrics and ratios page for AMOT that piqued our interest.

The stock is trading at a price-to-earnings (PE) ratio of around 39.5x based on full year net income of $17.4 million and a closing market cap of about $686 million, well above the U.S. market average.

When looking at the ratio on an adjusted basis, the multiple looks a little more reasonable around 23x.

On an alternative view on valuation, AMOT’s EBIT-to-EV has trended lower since the beginning of the pandemic

Fintel’s Management Effectiveness analysis has also shown weakening trends after a slight spike during the pandemic. ROE, which can be tweaked by balance sheet items, has performed slightly better than cash and operating return on investor capital (CROIC & OCROIC) which usually shows a better measure of performance.

Northland Capital Markets analyst Ted Jackson initiated coverage on the stock in December with an outperform recommendation and $45 target price. Jackson noted that AMOT’s free cash flow generation has been depressed by recent acquisition activity and expects growth as integration expenses subside.

Northland likes how Allied’s focus is around the top end of its addressable market segments which they believe has been the driver of above industry average sales growth.

Fintel’s consensus target price of $42.84 and yesterday’s close at $42.16 a share, suggests market analysts are likely viewing AMOT’s share price as fully valued following the recent appreciation.

This article originally appeared on Fintel

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