Amentum Holdings (AMTM) has drawn investor attention after its ASCEND joint venture received NASA’s Consolidated Spaceflight Mission Operations and Systems contract, a business win tied to several high-profile human spaceflight programs.

Despite securing the COSMOS win, Amentum Holdings’ recent momentum has been weak, with the share price down 10.63% over 30 days and 25.66% over 90 days. A 1 year total shareholder return decline of 15.44% points to ongoing caution.

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After a sharp pullback despite the COSMOS contract win, Amentum Holdings now sits well below analyst targets. This raises a simple question for investors: is most of the upside still ahead, or has the stock already used it up?

Most Popular Narrative: 7.1% Undervalued

With Amentum Holdings last closing at $20.43 against a widely followed fair value of $22.00, the current setup reflects a modest discount tied directly to detailed growth and margin assumptions.

Secular growth in AI workloads, data centers, networks and edge computing, which management describes as multi decade tailwinds with data center demand and edge markets expected to grow at high double digit rates, could support higher than expected CDI revenue and earnings if Amentum converts its US$26b proposal pipeline and strong bookings into long term contracts. This could put upward pressure on the share price through higher revenue and adjusted EBITDA.

Curious what kind of revenue path, margin lift and future earnings multiple are being used to justify that fair value for Amentum Holdings, and how a single discount rate ties it all together in the model?

Result: Fair Value of $22.00 (UNDERVALUED)

However, Amentum Holdings also carries upside risks, including stronger than modeled AI led digital infrastructure demand and a larger than expected contribution from global nuclear projects over time.

Another View: Amentum Holdings Through Earnings Multiples

While the SWS fair value for Amentum Holdings sits at $22.00, earnings multiples paint a tighter picture. The stock trades on a P/E of 33.7x, compared with a fair ratio of 29.8x, the US Professional Services average of 20x and a peer average of 16.5x, which points to valuation risk if sentiment cools.

For investors who want to see how those earnings based signals stack up against a full valuation breakdown, including where the fair ratio might trend over time, See what the numbers say about this price — find out in our valuation breakdown.

Next Steps

With mixed signals on Amentum Holdings from valuation and sentiment, do you want to rely on others or weigh the trade off yourself while this setup is fresh? Take a closer look at the data, then balance the upside and downside using our 3 key rewards and 2 important warning signs

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.