Value
8.4/10data confidence 100%| Component | Sub-score |
|---|---|
| P/E | 3.6 |
| P/S | 10.0 |
| EV/EBITDA | 6.6 |
| Fwd P/E | 9.6 |
| PEG | 10.0 |
| Analyst target | 9.0 |
- ▸Forward P/E: 7.7x
- ▸PEG: 0.01
- ▸Attractively valued
AMTM · Why this verdict
Why Amentum Holdings (AMTM) is rated SELL
Updated
Model-generated analysis — not investment advice. Not a registered investment advisor. Past performance does not guarantee future results.
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VerdictSELL
Overall score4.9/10
ConfidenceMEDIUM
MacroNEUTRAL
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
Business quality scores at 3.1 — below the 4.0 minimum floor — with no identifiable competitive moat, and the underlying return and margin metrics fall short of what would justify holding the position given the concentration and leverage risks present elsewhere in the profile. Warnings | Quality score recovers above 4.0 for 2 consecutive quarterly assessments, reflecting improvement in underlying margin, return, and financial health metrics. | →Stable |
| CounterThe company generates free cash flow equal to 443% of net income — a dramatically high conversion rate — which, if sustained, is inconsistent with a low-quality characterization and may indicate the quality score is understating the true cash economics of the business. | ||
Approximately 81% of revenue is derived from a single customer — the U.S. federal government — making financial results highly sensitive to federal budget decisions, contract renewals, and shifts in government spending priorities. Bear case | U.S. federal government revenue share falls below 70% as commercial or allied-government diversification is disclosed in an annual filing. | →Stable |
| CounterFederal government contracts tend to be long-duration, cost-plus, and difficult to displace; high concentration with this customer class can be more stable than equivalently concentrated commercial relationships, particularly for mission-critical services. | ||
The company has beaten consensus estimates in each of the last four reported quarters, with surprises averaging just under 6% — a tight, consistent pattern suggesting reliable operational execution and predictable contract delivery. Catalyst track record | Beat rate remains at 100% over the next four quarters with positive surprise above 3% each quarter. | →Stable |
| CounterAverage surprises of 5-7% against government-contract revenues reflect the predictability of the revenue base rather than management outperformance; the beat streak is more a function of contract structure than a durable earnings edge that would persist under a less stable revenue backdrop. | ||
A forward price-to-earnings multiple of 8 times presents surface-level value, but revenue is essentially flat — declining at roughly zero percent — meaning the low multiple may reflect low growth rather than genuine undervaluation. Valuation breakdown | Revenue growth turns positive and exceeds 5% year-over-year for 2 consecutive quarters, validating that the low multiple reflects a discounted price rather than deteriorating fundamentals. | →Stable |
| CounterIn government services, contract backlog can precede reported revenue by quarters; if the backlog is growing, top-line acceleration may follow with a lag, making current revenue stagnation a timing issue rather than a structural concern. | ||
Business quality scores at 3.1 — below the 4.0 minimum floor — with no identifiable competitive moat, and the underlying return and margin metrics fall short of what would justify holding the position given the concentration and leverage risks present elsewhere in the profile.
→StableWarnings
- Expectation
- Quality score recovers above 4.0 for 2 consecutive quarterly assessments, reflecting improvement in underlying margin, return, and financial health metrics.
CounterThe company generates free cash flow equal to 443% of net income — a dramatically high conversion rate — which, if sustained, is inconsistent with a low-quality characterization and may indicate the quality score is understating the true cash economics of the business.
Approximately 81% of revenue is derived from a single customer — the U.S. federal government — making financial results highly sensitive to federal budget decisions, contract renewals, and shifts in government spending priorities.
→StableBear case
- Expectation
- U.S. federal government revenue share falls below 70% as commercial or allied-government diversification is disclosed in an annual filing.
CounterFederal government contracts tend to be long-duration, cost-plus, and difficult to displace; high concentration with this customer class can be more stable than equivalently concentrated commercial relationships, particularly for mission-critical services.
The company has beaten consensus estimates in each of the last four reported quarters, with surprises averaging just under 6% — a tight, consistent pattern suggesting reliable operational execution and predictable contract delivery.
→StableCatalyst track record
- Expectation
- Beat rate remains at 100% over the next four quarters with positive surprise above 3% each quarter.
CounterAverage surprises of 5-7% against government-contract revenues reflect the predictability of the revenue base rather than management outperformance; the beat streak is more a function of contract structure than a durable earnings edge that would persist under a less stable revenue backdrop.
A forward price-to-earnings multiple of 8 times presents surface-level value, but revenue is essentially flat — declining at roughly zero percent — meaning the low multiple may reflect low growth rather than genuine undervaluation.
→StableValuation breakdown
- Expectation
- Revenue growth turns positive and exceeds 5% year-over-year for 2 consecutive quarters, validating that the low multiple reflects a discounted price rather than deteriorating fundamentals.
CounterIn government services, contract backlog can precede reported revenue by quarters; if the backlog is growing, top-line acceleration may follow with a lag, making current revenue stagnation a timing issue rather than a structural concern.
TrendMatrix Research · core thesis
Engine thesis — one sentence
A government-services franchise trading at 8 times forward earnings with a perfect four-quarter earnings beat streak offers surface-level value appeal, but business quality below the minimum acceptable threshold and 81% revenue dependence on a single government customer make this an exit candidate rather than a hold.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Per-dimension breakdown
Quality
3.1/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 1.0 |
| ROA | 1.9 |
| Gross margin | 0.0 |
| Op margin | 1.6 |
| Net margin | 0.5 |
| Current ratio | 5.4 |
| FCF quality | 10.0 |
| Moat | 3.1 |
| Piotroski F | 4.4 |
- ▸Excellent cash conversion: 443% FCF/NI
- ▸No competitive moat
Growth
2.4/10data confidence 33%| Component | Sub-score |
|---|---|
| Rev growth | 2.4 |
- ▸Declining revenue: -0%
Momentum
6.4/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 4.5 |
| MACD | 9.1 |
| OBV | 10.0 |
| MA position | 4.0 |
| Volume | 4.4 |
- ▸Volume accumulation (rising OBV)
- ▸Below 200-MA, MA slope -1.5%/30d — confirmed downtrend
Sentiment
8.2/10data confidence 100%| Component | Sub-score |
|---|---|
| LLM sentiment | 8.5 |
| Analyst rating | 7.1 |
| Price target | 9.4 |
- ▸LLM news sentiment: +0.70 (n=1)
- ▸Analyst upside: 45%
Insider
5.0/10data confidence 50%| Component | Sub-score |
|---|---|
| materiality | 5.0 |
| holder change | 5.0 |
- ▸No net insider activity — $0 (0.000% of mkt cap)
Peer rank
2.6/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 6.7 |
| quality rank | 2.3 |
| growth rank | 1.4 |
Technical
2.7/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 3.0 |
| support resistance | 3.3 |
| 52w position | 1.7 |
Risk (lower is worse)
3.9/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 5.6 |
| days to cover | 3.2 |
| volatility | 2.9 |
| put call | 3.9 |
| implied vol | 1.5 |
| debt equity | 6.0 |
- ▸High IV: 71%
- ▸Concentration risks: 1 HIGH (10-K Item 1A — sized via position_sizing, validated via buy_confidence)
Catalyst
6.1/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 5.0 |
| earnings history | 10.0 |
| earnings timing | 5.0 |
| surprise avg | 5.4 |
| news activity | 5.0 |
- ▸Perfect beat streak: 4Q
How the verdict was assembled
Engine trigger
Quality below minimum threshold.
Engine technical detail
verdict_path:
L1:HARD_BLOCKPassed (8)
- MOMENTUM:6.4>=5.5
- ASYMMETRY:2.4>=1.5
- INSIDER:OK
- 8K:CLEAN
- NEWS_EVENTS:NONE_RECENT
- EARNINGS_PROXIMITY:29d clear
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (0)
none
Warning (1)
- DEATH_CROSS:momentum=6.4>=5.0 recovering
Reward-to-Risk
2.40
Upside
+26.4%
Downside
11.0%
Sizing output
AVOID
SetupRecovery — Death cross but MACD improving, RSI 45
EdgeCatalyst-Driven — Earnings in 29d with 4/4 beat streak
SuitabilitySpeculative — Drawdown -42% (>40% off 52w high)
Investment implication
The L1 gate blocked the positive-verdict path: a hard-floor threshold was breached, so dimensional pillars — including Value at 8.4 could not lift the engine output above the verdict floor.
The strongest dimensions are Value at 8.4, Sentiment at 8.2, and Momentum at 6.4; the weakest are Growth at 2.4, Peer rank at 2.6, and Technical at 2.7. The V9 engine cleared all gates with 1 warning, producing an asymmetric reward-to-risk of 2.40 and an engine sizing output of AVOID.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1Quality Below Minimum Threshold
Trip ifQuality score rises above 4.0 for 2 consecutive quarterly assessments.
- P2Federal Government Revenue Concentration
Trip ifU.S. federal government revenue share falls below 70% in an annual filing.
- P3Steady Earnings Beat Streak
Trip ifEPS surprise falls below 0% for 2 consecutive quarters, ending the beat streak.
- P4Cheap Multiple With Flat Revenue
Trip ifRevenue growth turns positive and exceeds 5% year-over-year for 2 consecutive reported quarters.