Amentum Holdings, Inc. (AMTM): A Bull Case Theory

We came crossed a bullish thesis connected Amentum Holdings, Inc. connected R. Dennis’s Substack by OppCost. In this article, we volition summarize the bulls’ thesis connected AMTM. Amentum Holdings, Inc.'s stock was trading astatine $28.63 arsenic of November 28th. AMTM’s trailing and guardant P/E were 106.04 and 12.03 respectively according to Yahoo Finance.

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Amentum Holdings, Inc. provides engineering and exertion solutions to the US and allied authorities agencies. AMTM has emerged arsenic a starring pure-play authorities exertion contractor pursuing the Reverse Morris Trust transaction with Jacobs Solutions successful September 2024, combining bequest Amentum operations with Jacobs’ Critical Mission Solutions and Cyber & Intelligence units.

The merger created a scaled entity with pro forma revenues adjacent $14 billion, a backlog exceeding $44.6 billion, and implicit 53,000 employees crossed 80 countries, positioning Amentum to vie straight with Tier 1 incumbents similar Leidos, SAIC, and Booz Allen Hamilton.

The company’s portfolio present includes a high-margin Digital Solutions conception and a steady-state Global Engineering Solutions business, allowing it to connection end-to-end capabilities from strategy plan to operations, a operation highly charismatic to the Department of Defense and national agencies seeking azygous premier contractors.

Despite its scale, the marketplace presently undervalues Amentum, pricing it astatine a guardant P/E of 10.4x, reflecting emblematic “conglomerate discount” and integration concerns. Key worth drivers see $50–$70 cardinal successful outgo synergies, assertive indebtedness paydown, and enlargement of the Digital Solutions segment, which already demonstrates 8% EBITDA margins and robust underlying growth.

The company’s cash-light exemplary and minimal superior expenditure requirements output an Owner Earnings output of 10.8%, underscoring its beardown escaped currency travel procreation and deleveraging potential. Recent wins, including a $946 cardinal U.S. Army declaration and $350 cardinal successful integer task orders, validate the merger’s strategical rationale.

With nett leverage improving to 3.5x and a beardown pipeline, Amentum offers a compelling risk/reward profile. Even humble execution supports a mid-$30s valuation, portion palmy maturation and marketplace re-rating of Digital Solutions could propulsion the banal toward $42, astir doubling existent levels. The operation of unchangeable revenue, precocious escaped currency flow, and operational standard makes Amentum a uniquely charismatic concern successful authorities technology.

Previously we covered a bullish thesis connected Amentum Holdings, Inc. (AMTM) by Acid Investments successful March 2025, which highlighted post-spin portfolio diversification, beardown backlog coverage, and management’s absorption connected borderline enlargement and deleveraging. The company's banal terms has appreciated astir by 53.34% since our coverage. This is due to the fact that the thesis played out. OppCost shares a akin position but emphasizes the Reverse Morris Trust merger, Digital Solutions growth, and escaped currency travel potential.