Analysts at a leading research firm have upgraded Amentum Holdings from Hold to Buy, citing a current backlog of $47 billion that provides revenue visibility for more than three years. Order bookings are accelerating faster than revenue conversion, indicating sustained momentum in contract awards. This upgrade reflects confidence in Amentum’s ability to convert its extensive pipeline into high-margin revenue streams across defense and energy markets.

Free cash flow is projected to grow by approximately 12% next fiscal year, driven by improved contract margins and working capital management. This cash flow expansion should enable Amentum to reduce its leverage ratio to below 3x net debt to EBITDA, enhancing financial flexibility. Lower leverage will support opportunistic M&A in high-growth, high-margin verticals such as space systems, digital infrastructure, and nuclear services.

In the third quarter, SEGRA Capital Management established a new position of 417,025 shares in Amentum, representing roughly 4% of its reported assets under management. The position, valued at nearly $10 million at the end of the quarter, underscores institutional confidence in Amentum’s growth prospects. SEGRA now counts Amentum among its top four holdings, alongside other energy and infrastructure firms.

Amentum recently secured a 10-year contract with the United States Space Force valued at approximately $4 billion, reinforcing its leadership in mission-critical support services. The company is also targeting growth in cyber training and nuclear operations, areas that typically command double-digit gross margins. These strategic wins, combined with Amentum’s scale in test and training solutions for missile defense, position the firm to benefit from escalating national security and infrastructure investments.