Amentum Holdings, Inc. (AMTM): A Bull Case Theory

We came across a bullish thesis on Amentum Holdings, Inc. (AMTM) on Cornerstone Value’s Substack. In this article, we will summarize the bulls’ thesis on AMTM. Amentum Holdings, Inc. (AMTM)’s share was trading at $21.21 as of 22^nd May. AMTM’s trailing and forward P/E were 322.56 and 10 respectively according to Yahoo Finance.

A close-up of an antenna, its intricate designs a testament to the company’s expertise in space infrastructure.

Amentum’s recent earnings report was largely uneventful, with management maintaining EBITDA, cash flow, and EPS guidance while tightening the guidance range and providing timing details on the divestment of its Rapid Solutions Division. Despite a modestly lower book-to-bill ratio this quarter, the year-to-date figure remains strong. The stock’s sharp decline following the results appears driven more by the unwinding of long/short trade positions that had anticipated a beat-and-raise scenario, rather than the fundamentals.

The April announcement of the $360 million sale of the Rapid Solutions Division to Lockheed Martin validates Amentum’s strategy of divesting non-core, low-growth, or low-margin assets to accelerate deleveraging and reshape its margin profile. This deal is notable for its exceptionally high 36x EBITDA multiple, reflecting Lockheed’s strategic valuation of the business despite its modest growth within Amentum. Proceeds from the sale are earmarked for debt reduction, which is important given that debt paydown had been delayed due to prepayment penalties that recently expired.

On the operational front, the company faces a one-time $70 million cash outflow in 3Q25 tied to Jacobs net working capital true-up, already reflected in guidance. Additionally, the winding down of Elon Musk’s involvement in DOGE, which had previously caused sector volatility, is a positive development for the industry’s stability and efficiency reforms—a potential tailwind for Amentum and peers. While this quarter’s results did not impress, the strategic moves, including divestitures and deleveraging, alongside reduced market chaos, position Amentum well. The stock remains volatile but offers significant upside as management executes its transformation plan, and the team remains confident enough to have increased their position amid recent volatility.

We have previously covered Amentum Holdings, Inc. (AMTM) in March 2025 wherein we summarized a bull thesis by Acid Investments on Substack. The author highlighted Amentum (AMTM) trading near $18 amid defense spending concerns and sector weakness. Since then, Jacobs’ full exit has eased overhang risks, boosting sentiment despite some volatility. Management’s focus on deleveraging and margin improvement, supported by insider buying, continues to point to strong upside potential. As of May 2025, the stock has risen by 13.18%.