Amentum Holdings, Inc.
AMTM
$23.15
-4.77%
Amentum Holdings, Inc. is an engineering and technology solutions provider operating in the Aerospace & Defense industry. It is a key contractor for U.S. and allied governments, with core advantages in environmental remediation, digital solutions, and complex project management.
AMTM
Amentum Holdings, Inc.
$23.15
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Investment Opinion: Should I buy AMTM Today?
Based on a synthesis of the available data, the objective assessment for AMTM is Hold. The investment thesis is highly speculative and bifurcated. The compelling forward valuation (P/E of 9.47) and low sales multiples suggest deep value if the company executes a turnaround. However, this is counterbalanced by clear red flags in recent financial performance, including declining revenue, negative cash flow, and poor returns on capital. The stock appears to be in a 'show me' state, where investors should wait for concrete evidence of operational improvement and a return to positive cash generation before establishing or adding to a position.
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AMTM 12-Month Price Forecast
The data presents a neutral-to-cautious outlook with high uncertainty. The valuation is schizophrenic: extremely high trailing multiples paired with reasonable forward expectations and low sales multiples. The recent sharp price drop may have priced in near-term risks, but fundamental improvement is necessary for sustained upside. The high short interest and lack of cash flow are significant overhangs.
Wall Street consensus
Most Wall Street analysts maintain a constructive view on Amentum Holdings, Inc.'s 12-month outlook, with a consensus price target around $30.09 and implied upside of +30.0% versus the current price.
Average Target
$30.09
4 analysts
Implied Upside
+30.0%
vs. current price
Analyst Count
4
covering this stock
Price Range
$19 - $30
Analyst target range
Analyst consensus data for a specific target price is not available in the provided inputs. However, recent institutional ratings show a mix of opinions. Among recent actions, firms like BTIG and Truist Securities maintain 'Buy' ratings, while RBC Capital and UBS have 'Sector Perform' and 'Neutral' ratings, respectively. The distribution suggests cautious optimism, but no sufficient consensus target price or detailed coverage summary is provided to form a definitive view.
Bulls vs Bears: AMTM Investment Factors
AMTM presents a classic turnaround story with conflicting signals. The bull case is built on a reasonable forward valuation and low sales multiples, suggesting the market has priced in current weakness. However, the bear case is supported by deteriorating fundamentals, including declining revenue, negative cash flow, and poor operational returns. The stock's recent sharp correction reflects these fundamental concerns.
Bullish
- Attractive Forward Valuation: Forward P/E of 9.47 is reasonable, suggesting expected earnings growth.
- Low Revenue-Based Multiples: P/S ratio of 0.44 and EV/Sales of 0.71 indicate potential undervaluation.
- Strong Government Contractor Position: Core advantages in environmental remediation and digital solutions provide stability.
- Analyst Optimism: Some firms maintain 'Buy' ratings, indicating confidence in future prospects.
Bearish
- Weak Recent Financial Performance: Q1 2026 revenue declined 5.24% YoY, with very thin net margin of 0.46%.
- Poor Cash Flow Generation: Negative operating and free cash flow in the latest quarter raises concerns.
- High Trailing P/E Ratio: Trailing P/E of 95.54 reflects very low current earnings.
- Recent Sharp Price Correction: Stock down 12.69% over past month, underperforming S&P 500 significantly.
AMTM Technical Analysis
Overall, the stock has shown significant volatility over the past six months, with a notable surge from the low $20s in late October 2025 to a peak above $37 in early February 2026, followed by a sharp correction. The stock's 6-month performance is up 3.70%, but it has underperformed the S&P 500 by 6.52% over the same period, indicating mixed relative strength.
Short-term performance has been weak, with the stock declining 12.69% over the past month and 10.07% over the past three months. This recent downtrend is significantly worse than the broader market, as indicated by a relative strength of -7.44 and -5.44 against the S&P 500 for the 1-month and 3-month periods, respectively.
As of the latest close at $26.08, the stock is trading near the lower end of its 52-week range of $16.01 to $38.11, representing approximately 68% of the range's height. The current price is 31.5% below the 52-week high, suggesting the stock is in a corrective phase from its recent highs.
Beta
—
—
Max Drawdown
-38.3%
Largest decline past year
52-Week Range
$19-$38
Price range past year
Annual Return
+9.5%
Cumulative gain past year
| Period | AMTM Return | S&P 500 |
|---|---|---|
| 1m | -16.0% | +8.2% |
| 3m | -23.0% | +9.0% |
| 6m | +4.9% | +10.5% |
| 1y | +9.5% | +26.5% |
| ytd | -24.0% | +8.9% |
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AMTM Fundamental Analysis
Revenue for the latest quarter (Q1 2026) was $3.24 billion, representing a year-over-year decline of 5.24%. Profitability metrics are thin, with a net margin of 0.46% and an operating margin of 3.33%. The trailing twelve-month EPS is a minimal $0.01, indicating very low earnings on a per-share basis.
The company's financial health shows a debt-to-equity ratio of 0.92, indicating a moderate level of leverage. The current ratio is a healthy 1.32, suggesting sufficient short-term liquidity. However, the latest quarterly cash flow statement shows negative operating cash flow of -$136 million and negative free cash flow of -$142 million, which raises concerns about near-term cash generation.
Operational efficiency metrics are low, with a Return on Equity (ROE) of 1.47% and a Return on Assets (ROA) of 2.75%. The asset turnover is not directly provided in a consolidated TTM figure, but the low ROA suggests the company is not generating strong returns on its asset base.
Quarterly Revenue
$3.2B
2026-01
Revenue YoY Growth
-0.05%
YoY Comparison
Gross Margin
+0.10%
Latest Quarter
Free Cash Flow
$272000000.0B
Last 12 Months
Revenue & Net Income Trends (2 Years)
Revenue Breakdown
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Valuation Analysis: Is AMTM Overvalued?
Given the company's positive but minimal net income, the primary valuation metric is the Price-to-Earnings (P/E) ratio. The trailing P/E ratio is extremely high at 95.54, reflecting the market's high price relative to very low current earnings. The forward P/E, based on analyst estimates, is a more reasonable 9.47, suggesting expectations for significant earnings growth.
Peer comparison data is not available in the provided inputs. The company also trades at a Price-to-Sales (P/S) ratio of 0.44 and an Enterprise Value-to-Sales (EV/Sales) ratio of 0.71, which appear low and may indicate the market is valuing the company based on its revenue base rather than current profitability.
PE
95.5x
Latest Quarter
vs. Historical
Mid-Range
5-Year PE Range -29x~274x
vs. Industry Avg
N/A
Industry PE ~N/A*
EV/EBITDA
10.2x
Enterprise Value Multiple
Investment Risk Disclosure
AMTM faces significant operational and financial risks. The core risk is execution: the company must reverse its recent revenue decline and translate its substantial revenue base into consistent profitability and positive cash flow. Its low margins (net margin 0.46%, operating margin 3.33%) and negative quarterly cash flows highlight operational inefficiency and potential liquidity strain, despite a healthy current ratio. The high trailing P/E of 95.54, while distorted by minimal earnings, indicates extreme sensitivity to any earnings disappointment; failure to meet the growth implied by the forward P/E of 9.47 could lead to further multiple contraction.
Market and sector risks are also present. As a government contractor, AMTM is exposed to budget cycles, political shifts, and competitive bidding pressures. The stock's high volatility, evidenced by a 52-week range of $16.01 to $38.11 and a recent sharp drop from its highs, suggests it is prone to sentiment swings. Furthermore, a short ratio of 5.57 indicates a sizable bearish bet against the stock, which could exacerbate downward price moves on negative news. The lack of a clear analyst consensus target adds to the uncertainty surrounding its fair value.
FAQ
The key risks include operational execution failure, evidenced by declining revenue and thin margins. Financial risk is high due to negative quarterly cash flow, which threatens liquidity despite a solid current ratio. Market risk is elevated, with the stock showing high volatility, significant short interest (short ratio 5.57), and recent severe underperformance versus the S&P 500.
The 12-month outlook is highly uncertain. The base case (50% probability) sees the stock trading between $26 and $32 as the company stabilizes. A bull case (25%) could see a rally to $34-$38 on successful execution and meeting EPS estimates of $3.70. A bear case (25%) risks a decline to $18-$22 if fundamentals worsen. The wide range reflects the stock's binary nature.
AMTM's valuation sends mixed signals. It appears severely overvalued based on trailing earnings (P/E of 95.54) but potentially undervalued based on forward earnings expectations (P/E of 9.47) and sales (P/S of 0.44). This disparity highlights the market's bet on significant future profit growth. The stock is fairly valued only if the company can deliver on the earnings implied by its forward multiple.
AMTM is not a clear buy at this time. While its forward P/E of 9.47 and P/S ratio of 0.44 appear attractive, these are offset by significant fundamental weaknesses, including a 5.24% year-over-year revenue decline and negative operating cash flow. The stock is best categorized as a high-risk, high-potential turnaround story, making it suitable only for speculative investors willing to bet on operational improvement.
AMTM is not suitable for short-term investment due to its high volatility and lack of near-term positive catalysts. It could be considered for a long-term, speculative investment only by investors who believe in the multi-year turnaround story and can tolerate significant price swings. The investment thesis requires a multi-year horizon to allow for operational improvements to materialize.