Is Amentum Holdings Stock Outperforming the S&P 500?

Chantilly, Virginia-based Amentum Holdings, Inc. (AMTM) provides engineering and technology solutions to the U.S. and allied government agencies. Valued at $5.6 billion by market cap, the company provides environment and climate sustainability, intelligence and counter threat, data fusion and analytics, engineering and integration, research and development, test and evaluation, and citizen systems solutions. 

Companies worth $2 billion or more are generally described as “mid-cap stocks,” and AMTM perfectly fits that description, with its market cap exceeding this mark, underscoring its size, influence, and dominance within the specialty business services industry. AMTM’s significant financial recovery has improved comprehensive income, and their realignment of business segments into Digital Solutions and Global Engineering Solutions positions them well to capitalize on high-growth areas such as cybersecurity and environmental solutions, potentially leading to sustained revenue and a competitive edge in securing new contracts.

Despite its notable strength, AMTM slipped 30.3% from its 52-week high of $34.47, achieved on Nov. 11, 2024. Over the past three months, AMTM stock gained 30.3%, outperforming the S&P 500 Index’s ($SPX) 7.5% rise during the same time frame.

In the longer term, shares of AMTM rose 14.3% on a YTD basis and climbed 16.8% over the past six months, outperforming SPX’s YTD gains of 4.4% and 1.7% returns over the past six months.

To confirm the bullish trend, AMTM has been trading above its 50-day and 100-day moving averages since late April, with slight fluctuations.

On May 6, AMTM shares closed up more than 1% after reporting its Q2 results. Its adjusted EPS of $0.53 surpassed Wall Street expectations of $0.48. The company’s revenue was $3.5 billion, topping Wall Street forecasts of $3.4 billion. AMTM expects full-year adjusted EPS in the range of $2 to $2.20, and expects revenue in the range of $13.9 billion to $14.2 billion.

In the competitive arena of specialty business services, BlackSky Technology Inc. (BKSY) has taken the lead over AMTM, showing resilience with 89.8% gains on a YTD basis and 76% uptick over the past six months.

Wall Street analysts are moderately bullish on AMTM’s prospects. The stock has a consensus “Moderate Buy” rating from the nine analysts covering it, and the mean price target of $25.22 suggests a potential upside of 4.9% from current price levels.