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Amentum Holdings, Inc. (AMTM)
NYSE:AMTM
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Amentum Holdings, Inc.
(NYSE:AMTM)
Rating:57Neutral
Price Target:
$26.00
▲(4.25% Upside)
Positive Factors
Debt Management
Amentum expects to use the $325mn in expected after-tax proceeds to accelerate debt paydown, which in turn should reduce interest expense and drive profitability.
Earnings and Cash Flow
The SFRC is expected to contribute meaningfully to future earnings and cash flow, reinforcing AMTM’s long-term growth profile.
Government Contracts
AMTM announced that it has won the $4 billion Space Force Range Contract (SFRC) that was previously under protest.
Negative Factors
Free Cash Flow
AMTM has weaker free cash flow compared to peers, driven by lower profit margins and higher net leverage.
Growth Limitations
High leverage and a slow award environment limit their growth opportunities.
Revenue Headwinds
Amentum expects a $200mn topline headwind due to a shift in JV accounting.
Amentum Holdings, Inc. (AMTM) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$5.93B
Dividend YieldN/A
Average Volume (3M)1.62M
Price to Earnings (P/E)113.0
Beta (1Y)1.18
Revenue GrowthN/A
EPS GrowthN/A
CountryUS
Employees53,000
SectorIndustrials
Sector Strength76
IndustryAerospace & Defense
Share Statistics
EPS (TTM)0.56
Shares Outstanding243,328,640
10 Day Avg. Volume1,556,214
30 Day Avg. Volume1,616,734
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)N/A
P/FCF RatioN/A
Enterprise Value/Market Cap1.61
Enterprise Value/Revenue0.76
Enterprise Value/Gross Profit10.88
Enterprise Value/Ebitda11.32
Forecast
1Y Price Target
$27.14Price Target Upside8.82% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering7
Amentum Holdings, Inc. Business Overview & Revenue Model
Company DescriptionAmentum Holdings, Inc. is a global technical and engineering services firm that provides a wide range of solutions to government and commercial clients. The company operates in sectors including defense, energy, environment, and mission support services. Amentum offers services such as infrastructure management, engineering design, logistics, and IT support, catering primarily to the needs of military, government, and industrial customers.
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:Aug 05, 2025
(Q3-2025)
| % Change Since: -1.46%|
Next Earnings Date:Dec 18, 2025
Earnings Call Sentiment Positive
The earnings call reflects a positive sentiment with significant achievements in revenue growth, net leverage reduction, and major contract wins, despite some temporary challenges related to divestitures and contract protests.Q3-2025 Updates
Positive Updates
Revenue and Growth Metrics
Amentum reported revenues of $3.6 billion, reflecting 2% growth, and an adjusted EBITDA of $274 million, marking 7% year-over-year growth. Free cash flow was $100 million.
Net Leverage Reduction
Amentum reduced its net leverage ratio to 3.5x, ahead of original expectations, by repaying $200 million in debt during the quarter and an additional $250 million subsequently.
Strong Bookings and Backlog
Reported $3.4 billion in net bookings this quarter and ended with $29 billion in pending awards and a total backlog of $45 billion, representing 3.2x annual revenue.
Significant Contract Wins
Awarded the $4 billion Space Force Range Contract and a CAD 1.2 billion annually valued contract for Canadian Nuclear Laboratories. Secured over $2 billion in bookings from on-contract growth modifications.
Nuclear Market Growth
Amentum is well-positioned in the nuclear market, working on 29 projects with over 50 projects in capture over the next 3 years, supported by favorable U.S. investment environment and executive orders.
Raising Full Year Guidance
Increased full-year revenue expectations to $13.975 billion to $14.175 billion, adjusted EBITDA remains at $1.065 billion to $1.095 billion with a minor $5 million underlying organic increase.
Negative Updates
Divestitures Impact
Completed divestitures of Rapid Solutions and New Zealand facilities maintenance business, which may have short-term revenue impacts.
Space Force Contract Protest
The Space Force Range Contract award is currently under protest, excluding it from the third quarter backlog or book-to-bill results.
Funded Backlog Decline
A decline in the funded backlog due to the transition of the new administration and contracting officer workforce impacts.
Company Guidance
During Amentum's third quarter fiscal year 2025 earnings call, the company provided updated guidance reflecting strong performance and optimistic future prospects. Amentum reported revenues of $3.6 billion, marking a 2% growth, and an adjusted EBITDA of $274 million, representing a 7% year-over-year increase. The company also generated free cash flow of $100 million. Amentum successfully reduced its net leverage ratio to 3.5x, ahead of original expectations, and remains on track to achieve at least $30 million in net run rate cost synergies by the end of the fiscal year. The company's backlog reached $45 billion, equating to 3.2x annual revenue, with a book-to-bill ratio of 1x for the quarter. The call highlighted Amentum's alignment with key global trends and strategic wins, including a $4 billion Space Force Range Contract and significant awards in nuclear solutions, demonstrating its leadership in national security and infrastructure modernization.Amentum Holdings, Inc. Financial Statement Overview
Summary
Amentum Holdings, Inc. demonstrates strong revenue growth but faces challenges in profitability and leverage. The company's high debt levels and negative return on equity raise concerns about financial stability. While cash flow generation shows improvement, the overall financial health is mixed, with significant room for enhancing profitability and reducing leverage.Income Statement
Amentum Holdings, Inc. shows a strong revenue growth rate of 17.61% in the TTM period, indicating robust top-line expansion. However, the company struggles with profitability, as evidenced by a negative net profit margin of -1.11% and declining gross profit margins over time. The EBIT and EBITDA margins are relatively low, suggesting challenges in operational efficiency.45
Neutral
Balance Sheet
The balance sheet reflects a high debt-to-equity ratio of 1.06 in the TTM period, indicating significant leverage. Return on equity is negative, highlighting profitability challenges. The equity ratio is not provided, but the overall leverage and negative ROE suggest potential financial instability.40
Negative
Cash Flow
The cash flow statement shows a positive free cash flow growth rate of 35.85% in the TTM period, indicating improved cash generation. However, the operating cash flow to net income ratio is low at 0.03, reflecting limited cash flow relative to net income. The free cash flow to net income ratio is relatively strong at 0.80, suggesting some efficiency in converting earnings to cash.50
Neutral
| Breakdown | TTM | Dec 2024 | Dec 2023 | Dec 2022 |
|---|---|---|---|---|
Income Statement | ||||
| Total Revenue | 12.68B | 8.39B | 7.86B | 7.68B |
| Gross Profit | 880.00M | 570.00M | 483.35M | 498.55M |
| EBITDA | 846.00M | 566.00M | 381.74M | 380.80M |
| Net Income | 52.00M | -82.00M | -313.70M | -84.42M |
Balance Sheet | ||||
| Total Assets | 11.81B | 11.97B | 6.41B | 4.22B |
| Cash, Cash Equivalents and Short-Term Investments | 738.00M | 452.00M | 305.00M | 207.00M |
| Total Debt | 43.00M | 4.94B | 4.33B | 121.00M |
| Total Liabilities | 7.22B | 7.42B | 6.00B | 919.00M |
| Stockholders Equity | 4.46B | 4.46B | 374.24M | 3.26B |
Cash Flow | ||||
| Free Cash Flow | 72.00M | 36.00M | 55.00M | 108.00M |
| Operating Cash Flow | 73.00M | 47.00M | 67.39M | 126.02M |
| Investing Cash Flow | 719.39M | 475.00M | -4.23M | -1.79B |
| Financing Cash Flow | -423.73M | -382.00M | -125.13M | 1.72B |
Amentum Holdings, Inc. Technical Analysis
Positive
24.94
Price Trends
24.31
Positive
22.38
Positive
22.20
Positive
Market Momentum
0.10
Positive
51.16
Neutral
23.93
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For AMTM, the sentiment is Positive. The current price of 24.94 is below the 20-day moving average (MA) of 25.06, above the 50-day MA of 24.31, and above the 200-day MA of 22.20, indicating a neutral trend. The MACD of 0.10 indicates Positive momentum. The RSI at 51.16 is Neutral, neither overbought nor oversold. The STOCH value of 23.93 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for AMTM.
Amentum Holdings, Inc. Peers Comparison
Overall Rating
UnderperformOutperform
Sector (65)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
78 Outperform | $6.09B | 29.06 | 11.32% | 0.60% | 4.77% | 4.50% | |
68 Neutral | $10.81B | 689.59 | 0.88% | ― | 7.76% | 40.33% | |
65 Neutral | £2.65B | 12.63 | 3.41% | 3.25% | 2.43% | -22.02% | |
63 Neutral | $3.85B | ― | -2.57% | ― | 9.19% | 72.88% | |
57 Neutral | $5.93B | 112.96 | 2.20% | ― | ― | ― | |
54 Neutral | $6.67B | 1.68 | 102.24% | ― | 3.62% | 943.43% | |
51 Neutral | $4.67B | ― | 81.63% | ― | -2.60% | -94.76% |
* Industrials Sector Average
Performance Comparison
AMTM
Amentum Holdings, Inc.
24.94
-3.06
-10.93%
FLR
Fluor
41.55
-8.07
-16.26%
KTOS
Kratos Defense
66.71
43.94
192.97%
MRCY
Mercury Systems
66.83
29.34
78.26%
MOG.A
Moog
197.56
5.02
2.61%
SPR
Spirit AeroSystems
40.94
5.79
16.47%
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.