AMTM

Amentum is a global engineering and technology services provider that derives roughly 81% of revenue from US federal government contracts across defense, intelligence, space, nuclear/environmental remediation and IT, organized into Digital Solutions and Global Engineering Solutions segments. FY2025 was a transformation year: revenue jumped 71.6% to $14.4B (reflecting a major merger), and the company swung to its first profit of the period shown — net income of $66.0M after losses in FY2022-FY2024 — with operating income up 64.9% to $480M. Most encouraging, operating cash flow surged to $543M and long-term debt was reduced 16.0% to $3.90B, a clear deleveraging signal.

The quality of earnings is the caution. Margins are razor-thin even by government-services standards — 3.3% operating and just 0.5% net — and ROE is only 1.5%, with retained earnings still negative at -$461M. The headline 80.2x P/E reflects a depressed, merger-year earnings base rather than a rich business; the more telling metric is 0.4x sales, which is genuinely cheap if the company can lift margins as it integrates the combined entity and pays down debt.