Core Insights - Amentum Holdings reported mixed Q1 2026 earnings, beating earnings per share expectations but missing sales forecasts, leading to a 9.6% drop in stock price [1][2] Financial Performance - The company reported earnings of $0.52 per share on a non-GAAP basis, but the GAAP earnings were $0.18 per share, significantly higher than last year's Q1 profit of $0.05 per share [3] - Sales declined by 5% year-over-year, but operating income improved by 5% due to enhanced profit margins, resulting in a 260% increase in profits per diluted share [2][3] - Free cash flow was negative, with Amentum burning $142 million in cash during the quarter [3] Future Outlook - Amentum forecasts a return to sales growth later in the year, projecting full-year sales could reach $14.3 billion, representing a 3% year-over-year growth [4] - Adjusted earnings are expected to grow by approximately 12% to $2.35 per share, with free cash flow anticipated to be around $550 million, also reflecting 12% growth [4] Valuation - The company's enterprise value stands at $12.6 billion, implying a 23x EV-to-FCF ratio, which is considered high given the projected 12% growth [5]
Why Amentum Holdings Stock Just Crashed