Core Thesis - Amentum Holdings, Inc. is positioned as a leading government technology contractor following its merger with Jacobs Solutions, creating a scaled entity with significant revenue and backlog [2][3] Company Overview - Amentum provides engineering and technology solutions to U.S. and allied government agencies, with a pro forma revenue near $14 billion and a backlog exceeding $44.6 billion [2][3] - The company has over 53,000 employees across 80 countries, enhancing its competitive positioning against Tier 1 incumbents like Leidos and Booz Allen Hamilton [3] Financial Metrics - As of November 28th, Amentum's share price was $28.63, with trailing and forward P/E ratios of 106.04 and 12.03 respectively [1] - The market currently undervalues Amentum, pricing it at a forward P/E of 10.4x, reflecting a typical "conglomerate discount" [5] - The company has an Owner Earnings yield of 10.8%, indicating strong free cash flow generation and deleveraging potential [6] Strategic Initiatives - Key value drivers include anticipated cost synergies of $50–70 million, aggressive debt paydown, and expansion of the Digital Solutions segment, which has shown 8% EBITDA margins [5] - Recent contract wins, including a $946 million U.S. Army contract and $350 million in digital task orders, validate the strategic rationale behind the merger [6] Growth Potential - With net leverage improving to 3.5x and a strong pipeline, Amentum presents a compelling risk/reward profile, with potential stock valuation reaching mid-$30s or even $42 with successful growth [7] - The combination of stable revenue, high free cash flow, and operational scale makes Amentum an attractive investment opportunity in the government technology sector [7] Historical Performance - Amentum's stock price has appreciated approximately 53.34% since March 2025, reflecting the successful execution of the bullish thesis on the company [8]
Amentum Holdings, Inc. (AMTM): A Bull Case Theory