Amentum Readies for 2.8% Revenue Drop — Amid Rising Buy Ratings

Forward-Looking Analysis

Analysts expect Amentum Holdings to report a 2.8% year-on-year revenue decline to $3.32 billion for Q1 2026, reversing the 10.1% growth in Q1 2025. Adjusted earnings are projected at $0.52 per share, aligning with the company’s historical tendency to exceed revenue estimates by 3.8% on average. Peers like Jacobs Solutions (58.1% revenue growth) and Booz Allen Hamilton (-10.2% revenue decline) highlight sector volatility. Amentum’s stock has outperformed the segment, rising 12.9% in the last month, while the average price target of $36.18 suggests limited upside. Analysts have reaffirmed estimates, indicating confidence in the company’s operational resilience despite macroeconomic headwinds.

Historical Performance Review

In Q4 2025, Amentum reported revenue of $3.92 billion, a 10.1% year-on-year increase, with net income of $37.00 million and EPS of $0.16. Gross profit stood at $417.00 million, reflecting strong cost management. The quarter marked a 9% revenue beat but a miss on full-year EPS guidance, underscoring execution challenges despite top-line growth.

Additional News

Recent institutional activity includes Legacy Advisors purchasing 9.8 million shares and Voya Investment Management acquiring 433,397 shares. Bank of America raised Amentum’s price target to $34.12, a 17.38% increase, while Wall Street Zen upgraded its rating to “Strong-Buy.” Amentum secured a $120 million DISA computer processing contract and a DTRA prime contract, bolstering backlog. Short interest declined 26.7% in December, signaling reduced bearish sentiment.

Summary & Outlook

Amentum’s Q1 2026 outlook hinges on navigating revenue contraction amid a competitive sector. While historical outperformance (3.8% revenue beats) and recent contract wins offer support, the 2.8% revenue decline poses downside risks. Gross profit margins and adjusted EPS ($0.52) remain critical metrics. Institutional buying and upgraded analyst ratings suggest cautious optimism, but execution against guidance will determine near-term stock performance. Overall, the company’s financial health appears stable, with growth contingent on contract execution and cost discipline.