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Maximus (MMS)
:MMS
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Maximus
(NYSE:MMS)69Neutral
Maximus (MMS) vs. S&P 500 (SPY)
Market Cap
$3.82B
Dividend Yield1.78%
Average Volume (3M)765.47K
Price to Earnings (P/E)14.5
Beta (1Y)0.89
Revenue Growth8.01%
EPS Growth53.64%
CountryUS
Employees41,100
SectorIndustrials
Sector Strength66
IndustryCorporate Services
Share Statistics
EPS (TTM)4.64
Shares Outstanding56,600,400
10 Day Avg. Volume708,213
30 Day Avg. Volume765,470
Financial Highlights & Ratios
PEG Ratio0.27
Price to Book (P/B)N/A
Price to Sales (P/S)0.71
Price to Cash Flow (P/CF)-11.90
P/FCF Ratio0.00
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$90.00Price Target Upside32.35% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering1
Maximus Business Overview & Revenue Model
Company DescriptionMAXIMUS, Inc. engages in the operation of government and human services programs. It operates through the following segments: Health Services; U.S. Federal Services; and Human Services. The Health Services segment offers a variety of business process services, and appeals and assessments for state, provincial and national government programs. The U.S. Federal Services segment includes process solutions, program management, as well as system and software development, and maintenance services for various United States federal civilian programs. The Human Services segment comprises of national, state, and county human services agencies with a variety of business process services, and related consulting services for welfare-to-work, child support, higher education institutions, and other human services programs. The company was founded by David V. Mastran in 1975 and is headquartered in Reston, VA.
How the Company Makes MoneyMaximus generates revenue by offering a range of services to government clients. Its primary revenue streams include contracts for program administration, technology solutions, and consulting services. The company often secures long-term contracts with federal, state, and local government agencies, providing services like health benefit enrollment, child support services, and employment programs. Maximus's earnings are significantly influenced by its ability to win and maintain these contracts, often through competitive bidding processes. Additionally, the company may form partnerships or collaborations with other entities to enhance its service delivery and expand its market reach.
Maximus Financial Statement Overview
Summary
Maximus presents a solid financial profile with consistent revenue growth and improved leverage metrics. The company demonstrates strong operational efficiency and effective cash flow management. While net profitability margins show some pressure, the overall financial health remains robust, supported by strong returns on equity and stable cash flows.Income Statement
Maximus has shown a strong revenue growth with a TTM increase from $4.90 billion to $5.38 billion, translating to an approximate 9.75% growth rate. The gross profit margin remains healthy at 22.89% for the TTM, and the EBIT margin is at 8.70%. However, the net profit margin slightly decreased to 5.28% compared to the previous year, indicating some pressure on net profitability.78
Positive
Balance Sheet
The company's debt-to-equity ratio has improved significantly from previous years, now standing at a low 0.05, indicating reduced leverage. The return on equity is at 17.24%, reflecting strong returns for shareholders. However, the equity ratio is at 40.57%, suggesting moderate financial stability.72
Positive
Cash Flow
Operating cash flow remains robust at $413.65 million TTM, with a high operating cash flow to net income ratio of 1.46, indicating strong cash generation relative to earnings. Free cash flow growth is solid at 25.52% compared to the previous year. However, the free cash flow to net income ratio is slightly lower at 0.99, showing most of the earnings are converted into free cash.75
Positive
| Breakdown | |||||
| TTM | Sep 2024 | Sep 2023 | Sep 2022 | Sep 2021 | Sep 2020 |
|---|---|---|---|---|---|
| Income Statement | Total Revenue | ||||
| 4.56B | 5.31B | 4.90B | 4.63B | 4.25B | 3.46B | Gross Profit |
| 885.23M | 1.25B | 1.03B | 939.81M | 946.98M | 711.00M | EBIT |
| 279.55M | 488.50M | 294.79M | 325.90M | 408.53M | 288.28M | EBITDA |
| 408.10M | 488.50M | 456.45M | 464.76M | 502.74M | 396.08M | Net Income Common Stockholders |
| 186.78M | 306.91M | 161.79M | 203.83M | 291.20M | 214.51M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | ||||
| 72.65M | 183.12M | 65.41M | 40.66M | 135.06M | 71.74M | Total Assets |
| 4.06B | 4.13B | 3.99B | 3.99B | 4.12B | 2.02B | Total Debt |
| 89.74M | 97.22M | 1.43B | 1.51B | 1.71B | 213.65M | Net Debt |
| 17.09M | -85.90M | 1.36B | 1.47B | 1.57B | 141.92M | Total Liabilities |
| 2.41B | 2.29B | 2.32B | 2.44B | 2.64B | 782.88M | Stockholders Equity |
| 1.65B | 1.84B | 1.67B | 1.55B | 1.48B | 1.24B |
| Cash Flow | Free Cash Flow | ||||
| 400.07M | 401.07M | 223.65M | 233.69M | 480.76M | 203.88M | Operating Cash Flow |
| 440.44M | 515.26M | 314.34M | 289.84M | 517.32M | 244.59M | Investing Cash Flow |
| -71.95M | -129.10M | -80.96M | -54.01M | -1.84B | -44.14M | Financing Cash Flow |
| -364.37M | -275.65M | -250.80M | -248.27M | 1.39B | -230.09M |
Maximus Technical Analysis
Neutral
68.00
Price Trends
72.51
Negative
76.86
Negative
82.29
Negative
Market Momentum
-1.90
Negative
45.55
Neutral
61.48
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For MMS, the sentiment is Neutral. The current price of 68 is above the 20-day moving average (MA) of 67.73, below the 50-day MA of 72.51, and below the 200-day MA of 82.29, indicating a neutral trend. The MACD of -1.90 indicates Negative momentum. The RSI at 45.55 is Neutral, neither overbought nor oversold. The STOCH value of 61.48 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for MMS.
Maximus Risk Analysis
Maximus disclosed 34 risk factors in its most recent earnings report. Maximus reported the most risks in the “Ability to Sell” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Maximus Peers Comparison
Overall Rating
UnderperformOutperform
Sector (62)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
77 Outperform | $7.91B | 16.55 | 12.88% | ― | 14.04% | 29.08% | |
75 Outperform | $13.40B | 15.77 | 75.34% | 1.97% | 14.07% | 116.33% | |
69 Neutral | $17.34B | 14.34 | 29.12% | 1.16% | 7.93% | 541.97% | |
69 Neutral | $3.82B | 14.52 | 16.88% | 1.78% | 8.01% | 53.64% | |
66 Neutral | $4.94B | 17.04 | 18.80% | 1.54% | -3.87% | -37.31% | |
62 Neutral | $8.11B | 13.34 | 1.17% | 3.02% | 4.16% | -15.14% |
* Industrials Sector Average
Performance Comparison
MMS
Maximus
68.00
-16.05
-19.10%
BAH
Booz Allen
109.94
-36.77
-25.06%
CACI
Caci International
362.87
-13.95
-3.70%
GIB
CGI
103.75
-11.27
-9.80%
SAIC
Science Applications
102.63
-39.02
-27.55%
LDOS
Leidos Holdings
133.71
5.26
4.09%
Maximus Earnings Call Summary
Earnings Call Date: Feb 6, 2025 | % Change Since: -9.92% | Next Earnings Date: May 8, 2025
Earnings Call Sentiment Positive
Maximus delivered strong first-quarter results, with notable contract wins and successful divestitures improving profitability. However, challenges in the US Services segment and cash flow management slightly offset these gains.Highlights
Strong First Quarter Results
Maximus reported revenue of $1.40 billion for Q1 FY2025, representing a 5.7% year-over-year growth, with 6.3% on an organic basis. Adjusted EPS was $1.61 for the quarter, up from $1.34 in the prior year period.
Successful Contract Recompetes
The company secured favorable outcomes on key contracts, including the CMS contact center operations and VA medical disability examination work. These contracts are expected to continue through 2031 and have been reawarded for two years, respectively.
Divestiture of Non-core Operations
Maximus completed the divestiture of its employment services businesses in Australia and South Korea, reducing volatility and improving profitability in its Outside the US segment.
Increase in Share Repurchase Program
The Board of Directors authorized an increase of $200 million to the share repurchase program. Approximately $290 million was deployed in share repurchases from the fiscal year start through last week.
New Contract Wins and Pipeline Strength
Maximus secured new contracts, including a $76 million contract with the Federal Reserve System and a $123 million contract with the National Energy Technology Laboratory, contributing to a strong pipeline.
Lowlights
US Services Segment Revenue Decline
Revenue in the US Services segment decreased by 7.7% to $452 million, with the operating income margin dropping to 9.0% from 13.5% in the prior year period due to the completion of the Medicaid unwinding exercise.
Cash Flow Challenges
Cash used in operating activities was $80 million, and free cash flow was an outflow of $103 million for the quarter ended December 31, 2024, reflecting expected seasonality and timing of payments.
Higher Effective Tax Rate
The effective tax rate was higher in the quarter due to divestiture charges, leading to an adjusted EPS impact.
Company Guidance
During the Maximus Fiscal 2025 First Quarter Conference Call, strong financial results were reported, with a 5.7% year-over-year revenue increase to $1.40 billion and an adjusted EBITDA margin of 11.2%. The US Federal Services segment led growth, with a 15.3% revenue increase, while the outside the U.S. segment posted a 6.0% increase. Notably, the company completed the divestiture of its employment services businesses in Australia and South Korea, reducing volatility and improving profitability. Additionally, a $200 million increase in the share repurchase program was announced, with $290 million already deployed. The total pipeline of opportunities stood at $41.4 billion, with 57% representing new work. Updated guidance for fiscal 2025 reflected increased earnings and free cash flow projections, with adjusted EPS raised to $5.90 to $6.20 per share. The company emphasized its strong position in government services, highlighting successful contract recompetes and new wins, including a $76 million contract with the Federal Reserve System and a $123 million contract with the National Energy Technology Laboratory.Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.