Amentum Holdings Inc. Common Stock (AMTM)

FairStock Score: 34/100 — RISKY

Key Financials

Strengths

• Generates $638 million in annual free cash flow (9.7% yield on market cap)
• Established organization with 50,000 employees providing operational scale

Concerns

• Trades significantly above Graham Number ($13) with negative 108% margin of safety—limited downside protection
• Revenue declining at 5.2% year-over-year signals potential demand weakness or market share loss
• Altman Z-Score of 1.0 places it in the financial distress zone—elevated bankruptcy risk
• No meaningful dividend despite modest growth—total return depends entirely on multiple expansion

AI Analysis

Amentum Holdings Inc. Common Stock is a small-cap industrials company valued at $6.6 billion. The business generates $14.2 billion in annual revenue with a 0.3% net margin and $638 million in free cash flow. From a quality standpoint, Amentum shows distressed Altman Z-Score of 1.0 warrants caution and modest 2% ROE. On valuation, the stock is commanding a steep 67.2x multiple, with trades far above its Graham Number ($13) with no margin of safety. Growth dynamics show revenue growing at -5.2% and profit growth of 266.7%. Our composite FairStock Score of 34/100 reflects below-average fundamentals overall. Investors should weigh the business quality against the current price and their own margin of safety requirements.

Bull Case

Improving fundamentals and sector tailwinds could drive meaningful earnings growth, compressing the effective multiple for patient investors. With $638 million in annual free cash flow (9.7% yield), management has ample capital for buybacks, dividends, or accretive acquisitions.

Bear Case

At 67x earnings, any growth disappointment triggers rapid multiple compression—a 20% earnings miss plus multiple contraction to 20x implies 40%+ downside. Regulatory changes, input cost inflation, or demand normalization represent underappreciated risks that could materially impact forward estimates.

Data from SEC filings. AI analysis is for educational purposes only — not investment advice. Scoring methodology · Disclaimer