How will the $4B Space Force contract affect Amentum's revenue guidance and earnings per share estimates?
The $4 billion Space Force Range Contract (SFRC) will be booked as a “new‑business” item in Amentum’s 2025‑2026 guidance, meaning the company can now lift its top‑line outlook beyond the $5.5 billion‑plus range it previously projected. Assuming a typical cost‑plus margin of roughly 12‑14 % on large government‑engineering work, the $4 bn ceiling translates into an incremental $480‑560 million of pre‑tax profit over the life of the award. Management has historically allocated about 5‑6 % of a new contract’s ceiling to the current fiscal year, so analysts are already penciling in roughly $200‑250 million of additional 2025 revenue and a $30‑35 million boost to adjusted EPS. Consequently, consensus EPS estimates are being upgraded by 5‑8 %, moving the 2025 forward‑looking EPS from roughly $2.30 to $2.45‑$2.55.
From a market‑technical perspective, Amentum’s shares have been trading in a tight 20‑day range around $30‑$33, a zone that coincides with the 50‑day SMA and the lower end of the 200‑day SMA. The contract news cleared a key upside catalyst, so the stock is likely to break above the $33 resistance on volume, retesting the $35‑$37 band (the prior high in March 2024) and, if momentum holds, could even target the $40‑$42 level—roughly the 1‑month high and a 10 % upside from today’s price. Conversely, a failure to hold $33 would keep the downside risk near the $28‑$29 support (the 50‑day SMA breach).
Actionable take‑away:
- Long bias for traders with exposure to defense and government services—add to positions on any pull‑back to $30‑$31, aiming for a breakout above $33.
- Watch for analyst upgrades and any guidance update in the next earnings release (likely Q2 2025); a re‑statement of revenue guidance that explicitly incorporates the SFRC will act as a catalyst for further upside.
- Tight‑stop just below the $28‑$29 support to protect against a broader market sell‑off that could temporarily outweigh the contract’s positive fundamentals.
Overall, the $4 bn Space Force award materially strengthens Amentum’s growth narrative, prompting upward revisions to both revenue guidance and EPS estimates, and sets the stage for a bullish technical move if the market digests the news without broader risk‑off pressure.