<div id="readability-page-1"><div><p>Recent wins on a reported $3.5b Defense Threat Reduction Agency contract and a $120m Defense Information Systems Agency award have put Amentum Holdings (AMTM) on investors’ radar as they reassess the stock’s risk reward profile.</p> <p>See our latest analysis for Amentum Holdings.</p> <p>The recent contract wins and earnings beats come against a backdrop of strong momentum, with a 90 day share price return of 52.30% and a 1 year total shareholder return of 52.70% from a latest share price of $34.8.</p> <p>If these contract awards have you rethinking your defense exposure, it might be a good moment to scan aerospace and defense stocks for other names benefiting from similar demand trends.</p> <p>With the stock up more than 50% over the past year and trading only slightly below the average analyst target, the key question now is whether Amentum is still mispriced value or if the market is already pricing in future growth.</p> <h2>Price-to-Earnings of 128.5x: Is it justified?</h2> <p>Amentum closed at $34.80, yet the current P/E of 128.5x stands well above both its peers and the wider US Professional Services industry.</p> <p>The P/E multiple compares the share price with earnings per share and is a quick way to see how much investors are paying for each dollar of profit. For a services and solutions provider like Amentum, it often reflects how the market assesses the durability and trajectory of earnings.</p> <p>Here, the signals are mixed. On one side, the company has only recently become profitable, earnings are forecast to grow 31.48% per year and profits have been growing at a high annual rate over the past five years. On the other side, return on equity is currently low at 1.3% and interest payments are not well covered by earnings, which may limit how much of that growth converts into shareholder returns.</p> <p>Against that backdrop, Amentum's P/E of 128.5x is far above the peer average of 22x, the US Professional Services industry average of 24.6x and an estimated fair P/E of 37x that the market could potentially move toward over time.</p> <p>Explore the SWS fair ratio for Amentum Holdings</p> <p><strong>Result: Price-to-Earnings of 128.5x (OVERVALUED)</strong></p> <p>However, you also have to weigh execution and balance sheet risks, given the low return on equity, thin net income of $66 million on $14.393 billion in revenue, and concerns about interest coverage.</p> <p>Find out about the key risks to this Amentum Holdings narrative.</p> <h2>Another View: What Does The DCF Say?</h2> <p>While the 128.5x P/E screens as expensive, our DCF model suggests an estimated fair value of US$69.63 per share compared to the current US$34.80 price. That indicates Amentum trades at roughly a 50% discount, so which signal do you place more weight on, earnings or cash flows?</p> <p>Look into how the SWS DCF model arrives at its fair value.</p> <figure><img height="476" src="https://imageproxy.pbkrs.com/https://images.simplywall.st/company/2a4b45bf-d0c9-4f17-ba3f-d08388bfe9db/chart/dcf?x-oss-process=image/auto-orient,1/interlace,1/resize,w_1440,h_1440/quality,q_95/format,jpg" width="746" original-src="https://imageproxy.pbkrs.com/https://images.simplywall.st/company/2a4b45bf-d0c9-4f17-ba3f-d08388bfe9db/chart/dcf"/><figcaption>AMTM Discounted Cash Flow as at Jan 2026</figcaption></figure><p>Simply Wall St performs a discounted cash flow (DCF) on every stock in the world every day (check out Amentum Holdings for example). We show the entire calculation in full. You can track the result in your watchlist or portfolio and be alerted when this changes, or use our stock screener to discover 865 undervalued stocks based on their cash flows. If you save a screener we even alert you when new companies match - so you never miss a potential opportunity.</p> <h2> Build Your Own Amentum Holdings Narrative</h2> <p>If you look at the same numbers and reach a different conclusion, or simply want to test your own view against the data, you can build a custom thesis in just a few minutes with Do it your way.</p> <p>A great starting point for your Amentum Holdings research is our analysis highlighting 3 key rewards and 2 important warning signs that could impact your investment decision.</p> <h2>Looking for more investment ideas?</h2> <p>If you are weighing what to do next, do not stop with one stock. Use the screener to spot fresh ideas that fit your investing style.</p> <ul> <li>Target potential mispricings by scanning these 865 undervalued stocks based on cash flows that may offer more appealing P/E or cash flow profiles than what you see today.</li> <li>Ride the next wave of automation and data breakthroughs by checking out these 24 AI penny stocks shaping how software and hardware apply artificial intelligence.</li> <li>Position your portfolio for dependable income by focusing on these 12 dividend stocks with yields &gt; 3% that already offer yields above 3%.</li> </ul> <p><em> This article by Simply Wall St is general in nature. <strong>We provide commentary based on historical data     and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice.</strong> It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your     financial situation. We aim to bring you long-term focused analysis driven by fundamental data.     Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.     Simply Wall St has no position in any stocks mentioned.</em></p></div></div>

ARKX

AMTM

<p>Amentum Holdings (AMTM) has gained attention following significant defense contract wins totaling $3.62 billion, leading to a 52.30% share price increase over 90 days. Despite a high P/E ratio of 128.5x, which is above industry averages, the company shows potential with a forecasted earnings growth of 31.48% per year. However, low return on equity and interest coverage concerns raise questions about future shareholder returns. A discounted cash flow analysis suggests a fair value of $69.63 per share, indicating the stock may be undervalued at its current price of $34.80.</p>

Simplywall

ARK Space Exploration & Innovation ETF

A Look At Amentum Holdings (AMTM) Valuation After Major Defense Contract Awards And Rising Analyst Optimism