Analysts have upgraded Amentum Holdings from hold to buy, citing a $47 billion backlog that provides more than three years of revenue visibility and outpaces revenue conversion through accelerating order bookings. Management’s strategic pivot toward high-margin markets such as space, digital infrastructure and nuclear energy is expected to drive free cash flow growth of approximately 12% in the coming fiscal year. This cash-flow expansion should allow net leverage to fall below 3× EBITDA, strengthening the balance sheet and creating headroom for targeted M&A in high-growth, high-margin verticals. Valuation multiples, currently below peer averages, also support potential upside as momentum in government and commercial contracts continues to build.

In a recent SEC filing, SEGRA Capital Management disclosed the establishment of a new position in Amentum comprising 417,025 shares, valued at just under $10 million as of the end of the third quarter. This stake represents 11.55% of the fund’s reportable 13F assets, underscoring institutional confidence in Amentum’s long-term growth trajectory. The addition follows Amentum’s strong win rate on major contracts, including a multi-year award from the U.S. Space Force, and reflects belief in the company’s differentiated technical services platform serving defense, intelligence and energy clients.