Amentum Holdings, Inc. (AMTM): what the price assumes

In the published model solve dated 2026-Q2, anchored at $20.00, Amentum Holdings, Inc. (AMTM) is priced for -1.3% growth. boothcheck publishes no house fair value, target price, or buy/sell rating; individual model outputs and user-controlled scenarios are analytical inputs, not Boothcheck targets. Narrative composed 2026-07-25.

Generated: 2026-09-07 · Exported: 2026-09-09 · Source: https://boothcheck.com/report/AMTM

Headline

What The Price Assumes (Inversion)

The assumption today's price embeds, recovered by inverting the valuation.

The operating-margin figure is value-band context at year 5: derived from the framework's value band, a separate calculation — not part of the priced-in solve.

Solve inputs: computed at a 8.2% cost of capital with 4% terminal growth over a 5-year stage.

How unusual the bet is: n/a

Valuation X-Ray

Asset, earnings-power and peer-multiple models all land far below the price; ONLY the growth-DCF reaches it. The bet is durable compounding the static frames structurally cannot price (a moat/durability premium).

How the valuation models price the stock relative to the market price. Price/FV above 1.0 means the market pays more than that lens defends (expensive); at or below 1.0 the lens can defend the price.

Families that justify the price: Growth Families that call it expensive: Asset, Earnings

The models below discount at their own flat-beta convention rates (cost of equity 9.3%, WACC 6.7%); the inversion above states its own rate.

Per-Model Detail (n=14)

Economic-Unit Decomposition (Sum Of The Parts)

One or more material disclosed units has unresolved economics. Unknown/general is not evidence of homogeneity: segment SOTP is primary but incomplete, consolidated cash flow may remain only a secondary cross-check when every unit shares an enterprise basis, and one sector multiple or target margin is withheld.

No total common-equity value is stated. One or more material units lack a supported unit value. The displayed values are an indicative subtotal; consolidated debt and cash cannot be applied to a fraction of the company.

Solvency

Interest expense is not separately reported in the latest filings, so interest coverage cannot be computed.

Bullet Takeaways

• Nearly two-thirds of revenue arrives on cost-plus-fee contracts, where the customer reimburses the cost and pays a fee on top, which is why a services business of this size shows a 3.6% operating margin and why that figure says less about quality than it appears to.
• The work is already sold well beyond the next fiscal year: As of October 3, 2025, the Company had total backlog of $47.1 billion, compared with $45.0 billion as of September 27, 2024, against annual revenue a fraction of that size.
• Third quarter results land on August 11, 2026, and the number that decides the year is the operating margin rather than revenue, because full-year revenue guidance of $13.95 billion to $14.30 billion is roughly where the business already sits.

Bull Case

The accounting and the bank account are telling two different stories here, and only one of them is real. Free cash flow ran to roughly three times reported net income last year, and the difference is almost entirely non-cash amortization of intangibles created when the two predecessor businesses were combined. In dollars that was $439 million against $148 million of reported earnings, which for a company carrying real borrowings makes the first number the one worth reasoning from. Methods that read this business through per-share earnings or book returns are, in effect, reading the merger paperwork rather than the operations.

The second thing the earnings line hides is how much of this work is already sold. As of October 3, 2025, the Company had total backlog of $47.1 billion, compared with $45.0 billion as of September 27, 2024, and the filing puts the year-on-year increase at $2.1 billion on new awards net of revenue recognized. A backlog several times annual revenue is not a promise, since government work can be descoped, but it is a very different starting position from a company that has to resell itself every quarter.

The contract mix explains the margin that looks alarming at first glance. Cost-plus-fee work makes up 62% of revenue, with fixed-price at 24% and time-and-materials at 13%. On a cost-plus contract the customer reimburses allowable cost and pays a fee on top, so the reported revenue line is swollen by pass-through spending the company never had a claim on. A 3.6% operating margin computed against that denominator is arithmetic rather than a verdict. It is also the reason the revenue is unusually defensive: on cost-plus work, inflation is largely the customer's problem, not the contractor's.

Management has been using the cash on the least glamorous option available, which is usually the honest signal. Alongside the scheduled quarterly amortization of $9 million on the term loan, the company made voluntary principal payments of approximately $191 million, $250 million and $281 million during 2025. Roughly three quarters of a billion dollars of optional debt reduction in a single year, from a company whose stock the market treats as a growth story, is management telling you where they think the risk actually sits.

The bear is right that leverage is heavy and that returns on the capital deployed have been thin so far. The reply is that both facts are functions of the same event, the combination, and both improve mechanically as the acquired intangibles amortize away and the term loan shrinks. Nothing in this thesis requires the government to spend more money. It requires the company to keep collecting fees on work it has already won and to keep sending the proceeds to lenders.

Bear Case

Amentum did not grow into its current shape. It was assembled, in one transaction, and the terms of that assembly are still the dominant fact about the equity. The share count has risen about 55.7% a year since the end of 2023, which is not ordinary dilution but the stock issued to build the company, and the same transaction brought a secured credit facility and a bond alongside it. Existing holders of the predecessor businesses paid for scale with ownership. What they received in return has to be judged on what the combined entity earns, not on how large it is.

The borrowing side of that construction is expensive and long-dated. In August 2024, the Company also completed an offering of $1,000 million in aggregate principal amount of 7.250% senior notes due August 1, 2032, sitting alongside a term facility that runs to 2031 and is secured by substantially all of our assets. A coupon in the sevens on a government-services contractor is not a distressed rate, but it is a real hurdle: every dollar of operating profit has to clear it before anything reaches shareholders, and it does so for another six years.

Then look at what all of that capital currently earns. Revenue of $14.2 billion produced $502 million of operating profit and $148 million of reported net income. That is a 3.6% operating margin against a government-services peer group where LDOS, the largest peer here, runs 12.0% and CACI runs 9.3%. Contract mix explains part of the gap, since a cost-plus book inflates the revenue denominator, but those peers carry cost-plus books too. The remainder is either integration cost that will fade or a structurally lower-quality contract portfolio, and from outside the two look identical for now.

The price requires the gap to close, and quickly. At $22.55 the market pays about 18 times company-wide operating income, which needs operating profit to compound at roughly 7.1% a year over about five years. Set that beside management's own full-year revenue guidance of $13.95 billion to $14.30 billion, which brackets where the business already is. If revenue is roughly flat and operating profit must compound at that pace, then every bit of the required growth has to come out of margin. That is the whole bet, stated plainly, and it depends on execution rather than on demand.

The concession is genuine: management is paying down debt aggressively rather than buying back stock or chasing acquisitions, and that is the correct priority at this leverage. It has not yet changed the arithmetic. Net debt of $3.5 billion is still 6.97 times operating income, and liquid assets total $428 million against that. A contractor with three years of backlog and a modest margin can service borrowings like these comfortably in normal conditions. What it cannot do is absorb a bad program, a descoped contract and a soft budget year at the same time without the equity taking the entire adjustment.

Valuation

Contract type, not end market, is the right descriptor for this business, and it shapes everything the valuation has to say. Cost-plus-fee work is 62% of revenue, fixed-price 24%, time-and-materials 13%. At $22.55 the market pays about 18 times company-wide operating income, which requires that operating profit compound at roughly 7.1% a year over about five years. Since the revenue base is not being guided upward, the required compounding has to come from the fee side rather than the volume side.

The methods land in two clearly separated groups, and the separation is an accounting artefact rather than a disagreement about the business. The cash-flow methods and the peer-multiple methods reach the price or sit close under it. The methods anchored on the balance sheet and on current earning power land far below, several times below in places. The reason is that the combination loaded the balance sheet with acquired intangibles and loaded the income statement with the amortization of them, so book equity looks large while accounting earnings look small. Any method that divides one by the other produces a return that describes purchase accounting rather than operations.

The reported inputs make the point concrete. Revenue of $14.2 billion produced $502 million of operating profit, a 3.6% operating margin, and reported net income of $148 million. The same period generated $439 million after capital spending, several times that earnings figure, which is the gap amortization creates. Book value per share is $18.81 against reported earnings of $0.60 a share, a spread that says the same thing from the other direction.

Cohort position is where the report has to be careful, because the peer group is not homogeneous. Among the services peers, LDOS runs a 12.0% operating margin and CACI runs 9.3%, both well ahead of this company. Among the engineering peers, the picture is closer: KBR, a peer with comparable end markets, runs 10.0%, while J runs 4.5% and FLR is negative at the operating line. Amentum sits at the bottom of the first group and in the middle of the second, which is a reasonable description of a company that does both kinds of work and has not yet demonstrated which one it will be judged as.

The balance sheet is the constraint that bounds all of it. Net debt of $3.5 billion is 6.97 times operating income, liquid assets total $428 million, and the borrowings run out to 2031 and 2032 rather than coming due soon. Management has been retiring the term loan voluntarily, with payments of approximately $191 million, $250 million and $281 million during 2025 on top of the required $9 million a quarter. That trajectory, sustained, does more for the equity at this leverage than any plausible revenue surprise would.

Catalysts

The next scheduled event is the fiscal third quarter, covering the period ended July 3, 2026, with results and a call on August 11, 2026. Two quarters into the fiscal year the company has reaffirmed full-year revenue guidance of $13.95 billion to $14.30 billion at each print. Reaffirmation twice in a row is worth reading literally: it says the top line is behaving as expected and that the year will be decided somewhere below it.

That makes margin and cash conversion the lines to watch in August rather than the revenue headline. Because so much of the revenue arrives on cost-plus terms, the fee rate and the mix between contract types move the profit line far more than volume does, and the amortization drag from the combination unwinds on a schedule rather than in response to anything management does. Both effects show up in the same quarter's operating profit, which is why a print can look flat on revenue and still change the picture materially.

The debt reduction programme is the other thing to track, and it is unusually observable. The company made voluntary term loan principal payments of approximately $191 million, $250 million and $281 million during 2025, on top of the required quarterly amortization. Whether that pace continues through fiscal 2026 is a direct read on how much cash the business is actually generating, since voluntary paydowns are the one use of capital that cannot be funded with an accounting entry.

Peer Cohorts (Per Segment, With Filing Citations)

Digital Solutions (reported)

• LDOS (Leidos Holdings, Inc.)
• FY2025 10-K: …across these reportable segments. NATIONAL SECURITY & DIGITAL Our National Security & Digital business provides leading-edge and technologically advanced services, solutions and products across substantially all U.S. federal government customers. Our advanced capabilities allow us to provide technology-enabled…
• FY2025 10-K: …more than 120 countries, including people scanners, computed tomography carry-on baggage scanners, checked baggage scanners, and explosive trace detectors. We are also the primary supplier to CBP and other 4 Leidos Holdings, Inc. Annual Report Table of Contents PART I international customers of mobile, non-intrusive…
• SAIC (Science Applications International Corporation)
• FY2025 10-K: …management and operations, sustainment and security of the customers' entire IT infrastructure. Our long-standing customer relationships have enabled us to achieve an in-depth understanding of our customers' missions and provide differentiated service offerings to meet our customers' most complex requirements.…
• FY2025 10-K: Our two reportable segments are the Defense and Intelligence segment and the Civilian segment. The Defense and Intelligence segment provides a diverse portfolio of national security solutions to the DoD and Intelligence Community of the United States Government. The Civilian segment provides solutions to the civilian…
• CACI (CACI International Inc)
• FY2025 10-K: …needs. Our proven Expertise and Technology and strong record of program delivery have enabled us to compete for and secure new customers and contracts, win repeat business, and build and maintain long-term customer relationships. We seek competitive business opportunities and have built our operations to support…
• FY2025 10-K: …in a highly competitive industry that includes many firms, some of which are larger in size and have greater financial resources than we do. We obtain much of our business on the basis of proposals submitted in response to requests from potential and current customers, who may also receive proposals from other firms.…
• BAH (BOOZ ALLEN HAMILTON HOLDING CORPORATION)
• FY2025 10-K: …environment, highly differentiated across a portfolio of scaled mission and technology businesses, and recognized for integrating, applying, and scaling technologies in the service of national mission priorities. Our Customers Booz Allen is committed to solving our customers' toughest challenges, and we work with a…
• FY2025 10-K: …raise concerns, explore solutions, and think outside the box to find creative answers. 6 Table of Contents Guided by Strategy . Our VoLT strategy pairs our technology prowess with mission expertise to bring solutions to customers at scale. Our modern workplace initiatives are designed to recruit, incentivize, reward,…
• PSN (Parsons Corporation)
• FY2025 10-K: 024") and 66% in the year ended December 31, 2023 (‘fiscal 2023"), which includes strong re-compete win rates of 99.6% in fiscal 2025 giving us long-term certainty on key contracts. As of December 31, 2025, our total backlog was $8.7 billion, a decrease of 2% from December 31, 2024. Federal Solutions Our Federal…
• FY2025 10-K: …before interest, taxes, depreciation and amortization (EBITDA) contribution of 46% and 54%, respectively, for the year ended December 31, 2025 ("fiscal 2025"). See "Management's Discussion and Analysis of Financial Condition and Results of Operations-Segment Results" for further discussion on our segments. Federal…
• KBR (KBR, Inc.)
• FY2025 10-K: …$ 235 $ 280 Note 2. Business Segment Information We provide a wide range of professional services, and the management of our business is heavily focused on major projects or programs within each of our reportable segments. At any given time, government programs and joint ventures represent a substantial part of our…
• FY2025 10-K: …worldwide, the following table describes the locations of our more significant existing office facilities: Location Owned/Leased Business Segment North America: Houston, Texas Leased All Fulton, Maryland Leased Mission Technology Solutions Columbia, Maryland Leased Mission Technology Solutions Lexington Park,…
• ACN (Accenture plc)
• FY2025 10-K: …delays can negatively impact our results of operations if we are unable to introduce new pricing or commercial models that reflect the value of these technological developments or if the pace and level of spending on new technologies are not sufficient to make up any shortfall. Developments in the industries we…
• FY2025 10-K: …By using the combined power of digital and data we help our clients to reinvent and reimagine the products they make and how they make them. We have expanded our capabilities over the last few years to include helping our clients to digitally transform how their capital projects are planned, managed and executed,…

Global Engineering Solutions (reported)

• KBR (KBR, Inc.)
• FY2025 10-K: …worldwide, the following table describes the locations of our more significant existing office facilities: Location Owned/Leased Business Segment North America: Houston, Texas Leased All Fulton, Maryland Leased Mission Technology Solutions Columbia, Maryland Leased Mission Technology Solutions Lexington Park,…
• FY2025 10-K: …$ 235 $ 280 Note 2. Business Segment Information We provide a wide range of professional services, and the management of our business is heavily focused on major projects or programs within each of our reportable segments. At any given time, government programs and joint ventures represent a substantial part of our…
• FLR (FLUOR CORPORATION)
• FY2025 10-K: 9,143 Goodwill Urban Solutions $ 130 $ 129 Energy Solutions 12 13 Mission Solutions 58 58 Other - - Total goodwill $ 200 $ 199 Urban Solutions. Revenue from a single customer amounted to 15 % of consolidated revenue during 2025. Segment profit in 2025 decreased due to forecast adjustments for cost growth on 3…
• FY2025 10-K: …under our Other segment. Urban Solutions provides EPC and project management services to the advanced technologies and manufacturing, life sciences, mining and metals, infrastructure industries and via professional staffing services. This segment also includes our operations and maintenance business. Energy Solutions…
• ACM (AECOM)
• FY2025 10-K: …types of customers. • Americas : Planning, advisory, consulting, architectural and engineering design, construction management and program management services to public and private clients in the United States, Canada, and Latin America in major end markets such as transportation, water, government, facilities,…
• FY2025 10-K: …fiscal year ended September 30, 2025 as "fiscal 2025." Overview We are a leading global provider of professional infrastructure consulting and advisory services for governments, businesses and organizations throughout the world. We provide advisory, planning, consulting, architectural and engineering design,…
• BWXT (BWX Technologies Inc)
• FY2025 10-K: …segment also provides various other services, primarily through joint ventures, to the U.S. Government including nuclear materials management and operation, environmental management and administrative and operating services for various U.S. Government-owned facilities. These services are provided to the U.S.…
• FY2025 10-K: …In addition, this segment offers in-plant inspection, maintenance and modification services for nuclear steam generators, heat exchangers, reactors, fuel handling systems and balance of plant equipment, as well as specialized non-destructive examination and tooling/repair solutions. This segment also offers a broad…
• TTEK (TETRA TECH, INC.)
• FY2025 10-K: …Our solutions may span the entire life cycle of high-end consulting and engineering projects and include applied science, data analysis, research, engineering, design and project management. We manage our operations under two reportabl e segments. Our Government Services Group ("GSG") reportable segment primarily…
• FY2025 10-K: , if any, of the Settlement Amounts will be recovered from the insurance carrier. As a result of the settlement agreement and consent decree with the United States and in connection with discussions regarding the ancillary claims, we recorded a $ 115.0 million charge to operating income ($ 97.0 million for the…
• J (JACOBS SOLUTIONS INC.)
• FY2025 10-K: …growth and deliver scalable, full lifecycle solutions across water and environmental, life sciences and advanced manufacturing, and critical infrastructure. Page 4 As global challenges like urbanization, infrastructure modernization, digital evolution and environmental resilience intensify, our integrated delivery…
• FY2025 10-K: …in more than 40 countries, we view sustainability and resilience as key differentiators and drivers of impact. Demand for solutions that address complex, interconnected challenges continues to grow across infrastructure, energy, advanced manufacturing and health. By embedding sustainability into our solutions, we…
• CLH (CLEAN HARBORS, INC)
• FY2025 10-K: …indicators that our management uses to assess results as well as certain macroeconomic trends and influences that impact the results. Environmental Services Our Environmental Services business offers an array of services to customers. We safely collect, transport, treat and dispose of hazardous and non-hazardous…
• FY2025 10-K: …new technology and/or improve the capabilities of existing technology to respond to these waste disposal and recycling needs. We believe that making technological investments that increase the value of our services delivered to customers pays off in a variety of ways including growth, retention, profitability and…

Methodology Note

• Priced-in inversion: the valuation is inverted on the current price to recover the operating-income growth, duration, and steady-state margin the price embeds (ROE for financials, FFO growth for REITs).
• Valuation x-ray: the valuation models, grouped into four families (asset, earnings, relative, growth). Each model is expressed as a price/FV ratio (distance from price), not a point fair-value estimate. The spread across families is the disagreement.
• Economic-unit decomposition (SOTP): each disclosed business unit is assigned its native valuation basis before any multiple is applied. Operating units are valued on enterprise value; funded financial units are valued on their own common equity, because their borrowings fund earning assets rather than levering the parent. A company total is stated only once every material unit carries a supported value and the parent capital bridge reconciles.
• Solvency: net cash/debt, net-debt-to-NOPAT, interest coverage, and share-count CAGR from EDGAR financials (net debt / FFO and fixed-charge coverage for REITs; regulatory-capital framing for financials).
• Peer cohorts: per-segment comparables with deep-linkable SEC filing citations.

Fundamentals sourced from SEC EDGAR filings. Current price from Databento. The priced-in inversion and valuation x-ray are computed by the boothcheck engine; narrative composed by AI from the structured data.