Amentum (AMTM) is now trading following the completion of its merger with Jacobs’ Critical Mission Solutions and Cyber & Intelligence businesses. AMTM had an unusual buy of 1250 January $30 calls on 10/10 at $1.25 to $1.30. The merger is expected to unlock significant cost savings, operational efficiencies, and expanded market reach, boosting Amentum’s long-term growth prospects.

Amentum is a leading provider of government services, such as logistics, engineering, and maintenance. Not only that, Amentum also offers cybersecurity solutions to protect government networks and data and intelligence services and environmental consulting, environmental remediation, and compliance services.

AMTM is in an attractive industry with a complex geopolitical landscape, growing importance of US strategic alliance, a focus on modernization and next-generation technologies and stable customer budget growth historically with a 4% CAGR. AMTM peers include LDOS, SAIC, BAH, CACI, KBR, PSN. The addressable market is seen at $320B for 2025.

AMTM has an enterprise value of $5.92B with FY25 seen at $14B in Revenues and $1.1B in EBITDA. AMTM has best-in-class revenue visibility with $47B in total combined backlog and strong market access with $450B+ of total ceiling value on strategic contract vehicles. AMTM is targeting 3X net leverage in the 24-months.

AMTM offers stable growth, margin expansion, synergy upside and operates in a strong industry with excellent FCF and very strong backlog.