Amentum Holdings Inc. – Ticker: AMTM

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1. Executive Summary

  • Company: Amentum Holdings Inc.
  • Ticker: AMTM
  • Industry: Advanced Engineering & Government Services
  • Exchange: NYSE
  • Investment Recommendation: Hold — The company is expanding post-merger but faces integration and debt-related risks.

2. Company Overview

  • Business Model: Provides engineering, logistics, cybersecurity, and nuclear/environmental services primarily for the U.S. government and allies.
  • Market Position: A global leader in government services, with over 53,000 employees across more than 80 countries.
  • Key Offerings: Cybersecurity, nuclear waste management, infrastructure modernization, mission-critical digital solutions.
  • Leadership: CEO John Heller (since 2020).

3. Financial Analysis

  • Q2 2025 Highlights:
    • Revenue: $3.491 billion (+70% YoY)
    • Net Income: $4 million (positive turnaround)
    • Adj. EBITDA: $268 million (+3% YoY)
    • Adj. EPS: $0.53
  • FY2024 Highlights:
    • GAAP Revenue: $8.388 billion
    • GAAP Net Loss: $82 million
    • Pro Forma Revenue: $13.86 billion
    • Pro Forma Net Income: $489 million
  • Balance Sheet:
    • Cash: $546 million
    • Total Debt: ~$4.7 billion
    • Leverage Ratio: ~8.6x
  • Cash Flow:
    • Operating Cash Flow: $57 million
    • Free Cash Flow: $53 million

4. Stock Performance

  • Current Price: $21.13
  • 52-Week Range: $16.01 – $34.50
  • YTD Return: +0.86%
  • Recent Trend: High volatility post-merger; market awaits further integration clarity.

5. Valuation Analysis

  • P/E Ratio (Adj.): ~12.93x
  • P/S Ratio: ~0.42x
  • P/B Ratio: ~1.2x
  • Analyst Target Price: Average $24.29 → ~15% upside potential

6. Industry & Market Analysis

  • Trends: Defense spending, cyber threats, energy modernization, and environmental remediation continue to drive demand.
  • Position: Strong backlog with U.S. federal agencies and allied governments.
  • Macro Risks: Inflation and interest rates could pressure margin performance.

7. Risk Analysis

  • Integration Risk: Potential challenges from the Jacobs CMS & C&I business merger.
  • Financial Risk: Elevated debt may strain profitability in high-rate environments.
  • Regulatory Risk: Sensitive to U.S. federal budget decisions and contracting rules.
  • Geopolitical Risk: Delays or cancellations in overseas defense projects.

8. Growth Catalysts

  • Merger Synergies: Integration of Jacobs’ defense and cyber units expands reach.
  • Federal Contracts: Wins such as the DOE Hanford cleanup strengthen revenue visibility.
  • Digital Expansion: AI and cyber tech enhancements offer long-term upside.
  • Global Reach: Increasing operations in Europe and allied nations.

9. Analyst Sentiment

  • Consensus: Hold
  • Target Price: $24.29
  • Highlights: Cautiously optimistic on growth; integration and debt must be monitored.

10. Conclusion

Amentum is well-positioned in a growing government services market, with strong contract pipelines and enhanced capability post-merger. However, its high leverage and execution risk warrant a cautious Hold rating until clearer post-merger performance is demonstrated.

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