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Maximus (MMS)
NYSE:MMS
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Maximus (MMS) AI Stock Analysis

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MMS

Maximus

(NYSE:MMS)

Rating:76Outperform
Price Target:
$96.00
▲(8.78% Upside)
Maximus receives a strong overall score driven by its robust earnings performance and positive technical indicators. The company's strategic positioning and contract wins further enhance its outlook. However, challenges in cash flow management and valuation concerns slightly temper the score.

Maximus (MMS) vs. SPDR S&P 500 ETF (SPY)

Maximus Business Overview & Revenue Model

Company DescriptionMaximus (MMS) is a leading provider of technology-driven solutions and services that primarily cater to the public sector. The company specializes in delivering critical services across various sectors, including health and human services, workforce development, and education. Maximus leverages its expertise in digital transformation to enhance the efficiency and effectiveness of government programs, ultimately improving the lives of citizens through better access to services and resources.
How the Company Makes MoneyMaximus generates revenue through a combination of government contracts and service agreements, providing a range of solutions such as program management, consulting, and technology services. The company's key revenue streams include performance-based contracts, where compensation is linked to the successful delivery of services and outcomes, as well as fixed-price contracts for specific projects. Additionally, Maximus has established strategic partnerships with various government agencies and organizations, further solidifying its role as a trusted service provider in the public sector. The company also benefits from ongoing demand for its services due to increasing government focus on improving public service delivery and the adoption of technology in government operations.

Maximus Earnings Call Summary

Earnings Call Date:Aug 07, 2025
(Q3-2025)
|
% Change Since: |
Next Earnings Date:Nov 19, 2025
Earnings Call Sentiment Positive
The earnings call presented a strong performance with record earnings and significant contract wins, particularly in the U.S. Federal Services segment. However, cash flow challenges and specific segment declines were noted, indicating areas for improvement.
Q3-2025 Updates
Positive Updates
Record-Breaking Earnings
Maximus reported adjusted diluted earnings per share of $2.16, a 24% increase year-over-year. Adjusted EBITDA grew by 15%.
Revenue Growth and Performance
Q3 revenue reached $1.35 billion, representing a 4.3% organic growth year-over-year. The U.S. Federal Services segment posted 11.4% revenue growth, all organic.
Strong Contract Wins
Maximus secured a $77 million contract with the U.S. Air Force Life Cycle Management Center for cybersecurity and cloud-based services.
Positive Pipeline Indicators
Total pipeline of sales opportunities was reported at $44.7 billion, with 63% representing new work. Signed awards totaled $3.4 billion of total contract value.
CMMC Level 2 Certification
Maximus achieved Cybersecurity Maturity Model Certification Level 2, positioning itself to compete effectively across the federal government contracting landscape.
Negative Updates
Cash Flow Challenges
Cash provided by operating activities was a net outflow of $183 million, and free cash flow was a net outflow of $198 million due to payment delays and increased DSO to 96 days.
U.S. Services Revenue Decline
The U.S. Services segment saw a revenue decrease to $440 million from $472 million in the prior year due to the completion of the Medicaid unwinding exercise.
Outside U.S. Segment Margin Issues
The Outside the U.S. segment's operating income margin was 4.0%, despite a slight loss in the prior year, indicating ongoing margin stability challenges.
Company Guidance
During Maximus' Fiscal 2025 Third Quarter Conference Call, the company reported record-breaking earnings, with adjusted diluted earnings per share reaching $2.16, marking a 24% increase year-over-year. The company also realized a 15% growth in adjusted EBITDA. Revenue for the quarter was $1.35 billion, representing a 4.3% organic growth year-over-year. Maximus highlighted its strong performance in an uncertain environment, particularly in the government, IT, and consulting sectors. The company also discussed its strategic positioning to capitalize on the One Big Beautiful Bill Act, which could create significant opportunities in Medicaid and SNAP, requiring states to implement changes by December 2026. Additionally, Maximus reported a $77 million contract win with the U.S. Air Force Life Cycle Management Center to provide cybersecurity and cloud-based services, reflecting its expanding role in defense. The total pipeline of sales opportunities stood at $44.7 billion, with 63% representing new work. The company raised its full-year guidance, now expecting revenue between $5.375 billion and $5.475 billion, reflecting approximately a 22% year-over-year earnings growth.

Maximus Financial Statement Overview

Summary
Maximus shows strong revenue growth and profitability with efficient operational margins. However, increased leverage and negative cash flow growth present potential risks. The company must focus on improving cash flow management to sustain its growth trajectory and maintain financial stability.
Income Statement
85
Very Positive
Maximus has demonstrated strong revenue growth with a TTM increase of 2.3% from the previous year, supported by a solid gross profit margin of 23.98%. The net profit margin is stable at 5.83%, indicating consistent profitability. EBIT and EBITDA margins are healthy at 9.55% and 11.94%, respectively, reflecting efficient operational management.
Balance Sheet
70
Positive
The company's debt-to-equity ratio has increased to 1.00, indicating higher leverage, which could pose a risk if not managed properly. However, the return on equity is strong at 18.25%, showcasing effective use of equity to generate profits. The equity ratio stands at 39.74%, suggesting a balanced capital structure.
Cash Flow
60
Neutral
Maximus faces challenges in cash flow management, with a negative free cash flow growth rate of -165.65% in the TTM. The operating cash flow to net income ratio is negative, indicating potential liquidity issues. However, the free cash flow to net income ratio is high at 2.56, suggesting that the company is generating significant cash relative to its net income.
BreakdownTTMDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income Statement
Total Revenue5.43B5.31B4.90B4.63B4.25B3.46B
Gross Profit1.30B1.25B1.03B939.81M946.98M711.00M
EBITDA648.10M488.50M456.45M464.76M502.74M396.08M
Net Income316.25M306.91M161.79M203.83M291.20M214.51M
Balance Sheet
Total Assets4.46B4.13B3.99B3.99B4.12B2.02B
Cash, Cash Equivalents and Short-Term Investments59.78M183.12M65.41M40.66M135.06M71.74M
Total Debt1.78B1.28B1.43B1.51B1.71B213.65M
Total Liabilities2.69B2.29B2.32B2.44B2.64B782.88M
Stockholders Equity1.77B1.84B1.67B1.55B1.48B1.24B
Cash Flow
Free Cash Flow-143.81M401.07M223.65M233.69M480.76M203.88M
Operating Cash Flow-56.17M515.26M314.34M289.84M517.32M244.59M
Investing Cash Flow-89.05M-129.10M-80.96M-54.01M-1.84B-44.14M
Financing Cash Flow100.97M-275.65M-250.80M-248.27M1.39B-230.09M

Maximus Technical Analysis

Technical Analysis Sentiment
Positive
Last Price88.25
Price Trends
50DMA
77.64
Positive
100DMA
73.92
Positive
200DMA
72.45
Positive
Market Momentum
MACD
3.27
Positive
RSI
71.74
Negative
STOCH
71.29
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For MMS, the sentiment is Positive. The current price of 88.25 is above the 20-day moving average (MA) of 85.91, above the 50-day MA of 77.64, and above the 200-day MA of 72.45, indicating a bullish trend. The MACD of 3.27 indicates Positive momentum. The RSI at 71.74 is Negative, neither overbought nor oversold. The STOCH value of 71.29 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive 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 (64)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
76
Outperform
$4.99B16.3117.61%1.36%3.40%13.75%
76
Outperform
$3.19B21.987.15%0.79%4.18%18.93%
70
Outperform
$2.99B38.516.32%2.11%4.27%-24.06%
67
Neutral
$10.29B28.9512.00%1.08%-0.06%3.83%
65
Neutral
$3.24B34.527.84%46.49%-25.62%
64
Neutral
$10.73B15.747.56%2.01%2.76%-15.10%
52
Neutral
$2.78B549.40-13.57%65.34%-633.72%
* Industrials Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
MMS
Maximus
88.25
3.20
3.76%
ABM
ABM Industries
48.26
-0.67
-1.37%
CBZ
CBIZ
59.86
-5.74
-8.75%
UNF
UniFirst
177.77
-0.09
-0.05%
ARMK
ARAMARK Holdings
38.81
1.53
4.10%
FA
First Advantage
16.06
-2.79
-14.80%

Maximus Corporate Events

Shareholder MeetingsRegulatory Filings and Compliance
Maximus Updates By-laws for Shareholder Proposals
Neutral
Jun 12, 2025

On June 10, 2025, Maximus, Inc. amended its By-laws to enhance disclosure requirements for shareholders proposing director nominations or business at meetings. These changes include detailed disclosure of stock ownership, performance-related fees, and material relationships, as well as compliance certifications with applicable laws. The amendments also limit the number of board nominees a shareholder can propose, prohibit substitute nominations without notice, and require updates to shareholder information. Additionally, the By-laws now align with Virginia Stock Corporation Act provisions and include technical updates.

Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

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.Date of analysis: Aug 19, 2025