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Amentum Holdings, Inc. (AMTM)
NYSE:AMTM
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Amentum Holdings, Inc.
(NYSE:AMTM)
Rating:66Neutral
Price Target:
$26.00
▲(7.44%Upside)
Positive Factors
Backlog and sales coverage
AMTM’s backlog is now ~$45bn, reflecting >3x sales coverage, which generally bodes well for the longer-term growth outlook.
Diversified portfolio
Amentum boasts the most diversified portfolio among federal contractors, ensuring no single end market or customer is expected to account for more than 15% of total sales.
Long-term growth potential
Opportunities from the Space Force, such as the recent $4bn 10-yr win, provide some insulation and long-term upside potential.
Negative Factors
Growth limitations
High leverage and a slow award environment limit their growth opportunities.
Leverage and margins
AMTM has weaker free cash flow compared to peers, driven by lower profit margins and higher net leverage.
Revenue exposure
Amentum still is vulnerable to budget scrutiny given its exposure to civilian agencies.
Amentum Holdings, Inc. (AMTM) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$5.89B
Dividend YieldN/A
Average Volume (3M)2.26M
Price to Earnings (P/E)359.1
Beta (1Y)1.14
Revenue GrowthN/A
EPS GrowthN/A
CountryUS
Employees53,000
SectorIndustrials
Sector Strength89
IndustryAerospace & Defense
Share Statistics
EPS (TTM)0.53
Shares Outstanding243,322,460
10 Day Avg. Volume1,599,164
30 Day Avg. Volume2,264,021
Financial Highlights & Ratios
PEG Ratio0.60
Price to Book (P/B)2.20
Price to Sales (P/S)0.00
P/FCF Ratio66.48
Enterprise Value/Market Cap1.20
Enterprise Value/Revenue0.19
Enterprise Value/Gross Profit6.22
Enterprise Value/Ebitda3.96
Forecast
1Y Price Target
$26.17Price Target Upside8.14% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering7
Amentum Holdings, Inc. Business Overview & Revenue Model
Company DescriptionAmentum Holdings, Inc. provides mission-critical, technology-driven services in government and commercial markets. It operates through two operating segments: Critical Mission Solutions and Cyber & Intelligence. The Critical Mission Solutions segment provides test, training, and operations services for missile defense systems, IT and engineering services to defense clients and the space sector, technological solutions, including installations, decommissioning, and environmental remediation to energy clients, and other highly technical consulting solutions. The Cyber & Intelligence segment provides advanced cyber training and data analytics for government professionals, advanced communication systems and aerial mapping technologies to national security clients, and other technical services for United States defense and intelligence clients. The company was founded on November 26, 2019 and is headquartered in Chantilly, VA.
How the Company Makes MoneyAmentum makes money primarily through contracts with government agencies and commercial clients. The company secures long-term contracts to provide technical and engineering services, which include maintenance, logistics, training, and support for complex systems and infrastructures. Key revenue streams include defense and government services, where Amentum provides mission-critical support and operational services. Significant partnerships with government entities and adherence to contractual obligations play a crucial role in its earnings. The company's revenue model is heavily reliant on its ability to win competitive bids and renew existing contracts, ensuring a steady flow of income.
Amentum Holdings, Inc. Earnings Call Summary
Earnings Call Date:May 06, 2025
(Q2-2025)
| % Change Since: 9.45%|
Next Earnings Date:Aug 07, 2025
Earnings Call Sentiment Positive
Amentum demonstrated solid financial performance and strong demand for its solutions, with significant contract wins and strategic divestiture efforts strengthening its position. However, challenges such as joint venture transitions and minor impacts from new administration changes slightly offset these gains.Q2-2025 Updates
Positive Updates
Strong Financial Performance
Amentum reported revenue of $3.5 billion, adjusted EBITDA of $268 million reflecting 3% year-over-year growth, and a free cash flow of $53 million for the second quarter of fiscal year 2025.
Significant Contract Wins
Amentum was awarded multiple intelligence contracts totaling over $1 billion and was selected as the program manager and lead design engineer for the Sizewell C nuclear power station in the UK.
Sustained Demand and Bookings
Amentum reported $2.8 billion in net bookings with a quarterly book-to-bill ratio of 0.9 times, resulting in a year-to-date book-to-bill ratio of one-times and an imputed book-to-bill ratio of 1.2 times, indicating strong demand for its solutions.
Strategic Divestiture
Amentum announced the divestiture of its Rapid Solutions product business, generating approximately $325 million in after-tax proceeds, aligned with the company's capital-light strategy and balance sheet strengthening efforts.
Negative Updates
Impact of Joint Venture Transitions
The transition of joint ventures from consolidated to unconsolidated status resulted in a decrease in reported revenue, impacting the company's overall revenue growth.
Challenges from New Administration Impact
The company cited a 1% revenue impact due to changes in priorities and adjustments from the new administration, affecting the timing of awards and extensions on existing work.
Company Guidance
In the second quarter of fiscal year 2025, Amentum reported strong financial performance with a revenue of $3.5 billion and adjusted EBITDA of $268 million, marking a 3% year-over-year growth. The company also achieved a free cash flow of $53 million. Amentum's quarterly book-to-bill ratio stood at 0.9 times, bringing the year-to-date book-to-bill to one times, with an imputed book-to-bill ratio of 1.2 times when including joint ventures. The company ended the quarter with a total backlog of $45 billion, representing 3.2 times its annual revenue. Amentum secured notable contracts, including over $1 billion in intelligence contracts and a role in the Sizewell C nuclear power station project. The company also reported $2.8 billion in net bookings and has $29 billion in pending awards. Looking ahead, Amentum reaffirmed its fiscal year 2025 guidance, expecting revenues between $13.85 billion and $14.15 billion, adjusted EBITDA of $1.065 billion to $1.095 billion, and free cash flow between $475 million and $525 million.Amentum Holdings, Inc. Financial Statement Overview
Summary
Amentum Holdings, Inc. shows robust revenue growth and a strong equity position but faces challenges in profitability and leverage. The company's ability to generate cash flow remains a concern, though it has made improvements in free cash flow management. Future performance will depend on addressing profitability and leveraging cash flow effectively.Income Statement
Amentum Holdings, Inc. has demonstrated strong revenue growth of 6.64% from the previous year, suggesting a positive trajectory in sales. However, the net profit margin is negative due to a loss of $82 million, indicating challenges in profitability. The gross profit margin remains relatively stable at 9.51%, and the EBITDA margin at 6.75% shows moderate operating efficiency.62
Positive
Balance Sheet
The company has a strong equity base with an equity ratio of 37.26%, suggesting a balanced capital structure. However, a high debt-to-equity ratio of 1.11 indicates significant leverage, which could pose risks in adverse market conditions. ROE is negative due to net losses, pointing to challenges in generating returns for shareholders.68
Positive
Cash Flow
Operating cash flow decreased compared to the previous year, impacting the cash flow stability. The free cash flow to net income ratio is negative due to net losses, but the company generated positive free cash flow of $36 million, demonstrating some ability to manage cash despite negative net income.55
Neutral
| Breakdown | TTM | Sep 2024 | Sep 2023 | Sep 2022 |
|---|---|---|---|---|
Income Statement | ||||
| Total Revenue | 12.51B | 8.39B | 7.87B | 7.68B |
| Gross Profit | 1.14B | 798.00M | 782.00M | 771.00M |
| EBITDA | 463.00M | 566.00M | 382.00M | 381.00M |
| Net Income | -97.00M | -82.00M | -313.70M | -84.42M |
Balance Sheet | ||||
| Total Assets | 12.00B | 11.97B | 6.41B | 4.22B |
| Cash, Cash Equivalents and Short-Term Investments | 546.00M | 452.00M | 305.00M | 207.00M |
| Total Debt | 43.00M | 4.94B | 4.33B | 121.00M |
| Total Liabilities | 7.42B | 7.42B | 6.00B | 919.00M |
| Stockholders Equity | 4.43B | 4.46B | 374.24M | 3.26B |
Cash Flow | ||||
| Free Cash Flow | 53.00M | 36.00M | 55.00M | 108.00M |
| Operating Cash Flow | 66.00M | 47.00M | 67.39M | 126.02M |
| Investing Cash Flow | 447.00M | 475.00M | -17.00M | -1.79B |
| Financing Cash Flow | -292.00M | -382.00M | -112.00M | 1.72B |
Amentum Holdings, Inc. Peers Comparison
Overall Rating
UnderperformOutperform
Sector (67)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
73 Outperform | $7.45B | 351.07 | 1.45% | ― | 7.32% | ― | |
73 Outperform | $5.73B | 28.14 | 11.61% | 0.64% | 4.50% | 9.90% | |
70 Outperform | $8.59B | 4.91 | 66.58% | ― | 7.16% | 523.56% | |
67 Neutral | $2.50B | 12.40 | 9.94% | 4.60% | -2.21% | 31.02% | |
66 Neutral | $5.89B | 359.05 | ― | ― | ― | ||
58 Neutral | $3.07B | ― | -4.45% | ― | 5.66% | 52.71% | |
37 Underperform | $4.56B | ― | 81.63% | ― | -2.91% | -109.95% |
* Industrials Sector Average
Performance Comparison
AMTM
Amentum Holdings, Inc.
24.20
-3.80
-13.57%
FLR
Fluor
51.23
6.46
14.43%
KTOS
Kratos Defense
44.34
23.70
114.83%
MRCY
Mercury Systems
52.00
22.15
74.20%
MOG.A
Moog
182.62
11.30
6.60%
SPR
Spirit AeroSystems
38.75
4.14
11.96%
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.