Core Insights - Maximus reported quarterly earnings of $1.62 per share, slightly missing the Zacks Consensus Estimate of $1.63 per share, but showing an increase from $1.46 per share a year ago, resulting in an earnings surprise of -0.61% [1] - The company posted revenues of $1.32 billion for the quarter ended September 2025, which also missed the Zacks Consensus Estimate by 1.52%, remaining unchanged from the previous year's revenues [2] - Maximus has surpassed consensus EPS estimates three times over the last four quarters, indicating some volatility in earnings performance [2] Earnings Outlook - The future performance of Maximus shares will largely depend on management's commentary during the earnings call and the trends in earnings estimate revisions [3][4] - The current consensus EPS estimate for the upcoming quarter is $1.73 on revenues of $1.43 billion, while for the current fiscal year, the estimate is $7.07 on revenues of $5.58 billion [7] Industry Context - The Government Services industry, to which Maximus belongs, is currently ranked in the bottom 9% of over 250 Zacks industries, suggesting a challenging environment for the sector [8] - Empirical research indicates a strong correlation between near-term stock movements and trends in earnings estimate revisions, which could impact Maximus's stock performance [5][6]

Financial Performance - Fiscal year 2025 revenue increased by 2.4% to $5.43 billion, with organic growth of 3.9% driven by clinical programs in the U.S. Federal Services Segment[3][6] - Operating margin for fiscal year 2025 was 9.7%, and adjusted EBITDA margin was 12.9%, compared to 9.2% and 11.6% in the prior year, reflecting margin expansion[4] - Diluted earnings per share for fiscal year 2025 were $5.51, up from $4.99 in the prior year, with adjusted diluted earnings per share increasing to $7.36 from $6.11[5] - U.S. Federal Services Segment revenue rose by 12.1% to $3.07 billion, driven by organic growth from clinical programs and natural disaster support activities[6][7] - U.S. Services Segment revenue decreased by 7.7% to $1.76 billion, primarily due to excess volumes from Medicaid-related activities in the prior year[9] - Outside the U.S. Segment revenue fell by 8.7% to $599.9 million, impacted by divestitures, though partially offset by 4.1% organic growth[11] - For fiscal year 2026, Maximus expects revenue between $5.225 billion and $5.425 billion, with an adjusted EBITDA margin of approximately 13.7%[19] - The company anticipates adjusted diluted earnings per share for fiscal year 2026 to range between $7.95 and $8.25[20] - For the year ended September 30, 2025, total revenue reached $5,431,276, an increase from $5,306,197 in 2024, representing a growth of approximately 2.4%[39] Cash Flow and Assets - Total cash flows from operating activities for fiscal year 2025 were $429 million, with free cash flow of $366 million, compared to $515 million and $401 million in the prior year[16] - Cash flows from operating activities for the three months ended September 30, 2025, were $649,372, significantly higher than $163,834 in 2024[35] - Cash, cash equivalents, and restricted cash at the end of the period were $260,459, up from $235,763 in 2024, indicating an increase of 10.5%[35] - Free cash flow for the year ended September 30, 2025, was $366,159, a decrease from $401,068 in 2024[42] Income and Profitability - Net income for the three months ended September 30, 2025, was $75,288, representing an increase of 3.9% compared to $72,504 in 2024[35] - Segment operating income for the U.S. Federal Services was $113,212 for the three months ended September 30, 2025, compared to $75,219 in 2024, showing a growth of 50.5%[36] - Net income for the year ended September 30, 2025, was $319,034, an increase from $306,914 in 2024[43] - Operating income for the year ended September 30, 2025, was $528,289, an increase from $488,499 in 2024[39] - Adjusted EBITDA for the year ended September 30, 2025, was $701,554, with an adjusted EBITDA margin of 12.9%, compared to $615,044 and 11.6% in 2024[43] - Gross profit for the year ended September 30, 2025, was $1,333,443, with a gross margin of 24.5%, compared to $1,251,652 and a margin of 23.6% in 2024[39] - Diluted earnings per share for the year ended September 30, 2025, was $5.51, compared to $4.99 in 2024, reflecting a growth of approximately 10.4%[43] Divestitures and Liabilities - The company reported divestiture-related charges of $39,549 for the year ended September 30, 2025, compared to $1,018 in 2024[43] - Total liabilities increased to $2,395,604 as of September 30, 2025, from $2,288,693 in 2024, marking an increase of 4.7%[33] - Total shareholders' equity decreased to $1,674,035 as of September 30, 2025, from $1,842,815 in 2024, a decline of 9.1%[33] Sales Pipeline - As of September 30, 2025, the total sales pipeline was $51.3 billion, with U.S. Federal Services Segment opportunities representing approximately 66% of this pipeline[14]

Core Insights - Maximus reported significant achievements in fiscal year 2025, with revenue growth and profitability exceeding initial expectations, highlighting the essential nature of its services [1][2] - The company is focusing on expanding in U.S. Federal markets and leveraging AI-enabled automation for productivity improvements in fiscal year 2026 [1] Financial Performance - Revenue for fiscal year 2025 increased by 2.4% to $5.43 billion, up from $5.31 billion in the previous year, with organic growth of 3.9% driven by clinical program volume growth in the U.S. Federal Services Segment [2][8] - The operating margin for fiscal year 2025 was 9.7%, compared to 9.2% in the prior year, while the adjusted EBITDA margin improved to 12.9% from 11.6% [3][8] - Diluted earnings per share rose to $5.51 from $4.99, and adjusted diluted earnings per share increased to $7.36 from $6.11, primarily due to enhanced operating profitability [4][8] Segment Performance - U.S. Federal Services Segment revenue grew by 12.1% to $3.07 billion, driven by organic growth from clinical programs and increased contributions from natural disaster support activities [5][8] - The operating margin for the U.S. Federal Services Segment improved to 15.3% from 12.2% in the prior year, reflecting better operating leverage and productivity enhancements [6][8] - U.S. Services Segment revenue decreased by 7.7% to $1.76 billion, attributed to excess volumes from Medicaid-related activities in the previous fiscal year [7][8] - Outside the U.S. Segment revenue fell by 8.7% to $599.9 million, impacted by divestitures, although there was positive organic growth of 4.1% [10][11] Cash Flow and Shareholder Returns - Cash flows from operating activities totaled $429 million, with free cash flow of $366 million, compared to $515 million and $401 million in the prior year [15][8] - The company repurchased approximately 5.8 million shares for $457 million during the fiscal year, with an additional $30.7 million spent on share repurchases post-September 30, 2025 [16][8] - A quarterly cash dividend of $0.30 per share was declared, payable on December 1, 2025 [17][8] Fiscal Year 2026 Guidance - Maximus expects fiscal year 2026 revenue to range between $5.225 billion and $5.425 billion, with an adjusted EBITDA margin of approximately 13.7% [18][19] - Adjusted diluted earnings per share are anticipated to be between $7.95 and $8.25 [18][19] - Free cash flow is projected to be between $450 million and $500 million for fiscal year 2026 [19][8] Sales and Pipeline - Year-to-date signed contract awards totaled $4.7 billion, with pending contracts amounting to $331 million, resulting in a book-to-bill ratio of 0.9x [12][8] - The total sales pipeline was valued at $51.3 billion, with U.S. Federal Services Segment opportunities representing approximately 66% of this pipeline [13][8] Balance Sheet - As of September 30, 2025, cash and cash equivalents stood at $222 million, with gross debt of $1.35 billion, resulting in a leverage ratio of 1.5x [14][8] - The company demonstrated strong improvement in collections, with days sales outstanding (DSO) decreasing to 62 days from 96 days [15][8]

Group 1: Earnings Reports and Expectations - Walmart Inc. is expected to report quarterly earnings of 60 cents per share on revenue of $177.43 billion [2] - Maximus Inc. is anticipated to post quarterly earnings of $1.67 per share on revenue of $1.34 billion [2] - Intuit Inc. is projected to report quarterly earnings of $3.09 per share on revenue of $3.76 billion [2] Group 2: Company Performance and Stock Movements - Walmart shares rose 1% to $101.65 in after-hours trading [2] - Palo Alto Networks Inc. reported strong first-quarter results for fiscal 2026 and raised its guidance, but shares fell 3.7% to $192.51 [2] - Nvidia Corp. reported third-quarter revenue of $57.0 billion, a 62% increase year-over-year, exceeding expectations, and shares gained 5.1% to $196.00 [2]

Core Insights - Wall Street analysts forecast that Maximus (MMS) will report quarterly earnings of $1.63 per share, reflecting a year-over-year increase of 11.6% [1] - Anticipated revenues for the quarter are projected to be $1.34 billion, showing a 1.7% increase compared to the same quarter last year [1] Earnings Projections - The consensus EPS estimate for the quarter has not changed over the past 30 days, indicating that analysts have maintained their initial projections [2] - Changes in earnings projections are crucial for predicting investor reactions, with empirical studies showing a strong correlation between earnings estimate trends and short-term stock price movements [3] Revenue Estimates - Analysts estimate 'Revenue- U.S. Federal Services' to be $750.39 million, representing an 11.2% increase from the prior-year quarter [5] - 'Revenue- U.S. Services' is expected to reach $454.98 million, indicating a decrease of 1.9% from the year-ago quarter [5] - 'Revenue- Outside the U.S' is projected to be $133.36 million, reflecting a significant year-over-year decline of 24.7% [5] Stock Performance - Over the past month, shares of Maximus have decreased by 6.3%, while the Zacks S&P 500 composite has increased by 1.5% [6] - Maximus currently holds a Zacks Rank 3 (Hold), suggesting that its performance may align with the overall market in the near future [6]

Core Insights - Maximus has been awarded a new Joint Cyber Command & Control (JCC2) Readiness contract by the United States Air Force, with a potential value of $86 million [1] Group 1 - The contract aims to enhance interoperability and deliver innovative solutions in the field of cyber command and control [1] - This is the second award received by Maximus from the Air Force, indicating a growing relationship and trust in the company's capabilities [1]

Core Insights - Five stocks have been added to the Zacks Rank 1 (Strong Buy) List, indicating strong potential for investment returns Group 1: Company Performance - HudBay Minerals (HBM) has seen a 9.1% increase in the Zacks Consensus Estimate for its current year earnings over the last 60 days [1] - GigaCloud Technology Inc. (GCT) has experienced a 6.5% increase in the Zacks Consensus Estimate for its current year earnings over the last 60 days [2] - Weatherford International (WFRD) has reported a 6% increase in the Zacks Consensus Estimate for its current year earnings over the last 60 days [2] - Maximus (MMS) has seen a 6% increase in the Zacks Consensus Estimate for its current year earnings over the last 60 days [3] - Jackson Financial (JXN) has experienced a 4.8% increase in the Zacks Consensus Estimate for its current year earnings over the last 60 days [3]

Core Insights - Maximus has experienced significant stock price appreciation, with an increase of almost 30% over the past three months and 20% year-to-date, indicating strong market momentum [1] - The company's growth and profitability are consistent, showcasing resilience in its business model with both top-line and bottom-line growth [1] Company Analysis - Maximus's business model demonstrates resilience, contributing to its consistent growth in revenue and profits [1] - The stock's performance reflects the company's ability to maintain a strong financial position and operational efficiency [1] Market Context - The analysis highlights the importance of identifying undervalued opportunities and unique business models within the investment landscape, particularly in the Nordic and U.S. markets [1]

Core Insights - The article emphasizes the importance of sales growth over traditional earnings metrics for evaluating stocks, especially in volatile market conditions [2][3][10] - A selection of stocks with strong sales growth and cash flow is recommended, including Universal Health Services, Methanex, Arista Networks, Voya Financial, and Maximus [2][10][12] Sales Growth as a Metric - Sales growth is preferred as it reflects actual demand for a company's products or services, providing better visibility into the durability of the business model [3][5] - Companies that can expand their sales during economic stress demonstrate pricing power and competitive advantages [3][5] Earnings Limitations - Earnings can be misleading due to one-off charges, cost-cutting, and accounting adjustments, making them less reliable indicators of a company's trajectory [4] Cash Flow and Financial Flexibility - Sustained sales growth leads to stronger cash flows, allowing companies to reinvest in innovation, expand markets, or return capital to shareholders without excessive debt reliance [5] Stock Selection Criteria - Stocks are shortlisted based on criteria such as 5-Year Historical Sales Growth greater than industry average and Cash Flow exceeding $500 million [6] - Additional metrics include P/S Ratio, % Change in Sales Estimate Revisions, Operating Margin, Return on Equity, and Zacks Rank [7][8][9] Recommended Stocks - Universal Health Services (UHS) is expected to have a sales growth rate of 8.5% in 2025 and holds a Zacks Rank of 2 [11][12] - Methanex (MEOH) anticipates a sales growth rate of 5.6% in 2025 with a Zacks Rank of 1 [12] - Arista Networks (ANET) is projected to achieve a sales growth of 25.4% in 2025 and has a Zacks Rank of 2 [13] - Voya Financial (VOYA) expects a sales growth of 16.1% in 2025, also holding a Zacks Rank of 2 [14] - Maximus (MMS) forecasts a sales growth of 2.7% in fiscal 2025 and has a Zacks Rank of 1 [15]

Core Viewpoint - Maximus (MMS) has shown strong performance year-to-date and is positioned to maintain this momentum, making it a compelling addition to investment portfolios [1] Group 1: Stock Performance - MMS shares have increased by 17.5% year-to-date, significantly outperforming the Government Services industry, which has seen a decline of 5% [2][8] - The company has a Zacks Rank of 1 (Strong Buy), indicating strong market confidence [3] Group 2: Earnings and Growth Prospects - Maximus has a positive earnings surprise history, exceeding the Zacks Consensus Estimate in three of the last four quarters, with an average earnings surprise of 29.3% [3] - The Zacks Consensus Estimate for Maximus's 2025 revenues is $5.45 billion, reflecting a year-over-year growth of 2.74%, while the earnings estimate is $7.41, indicating a 21.28% increase [4][8] Group 3: Competitive Edge and Financial Health - The company achieved CMMC Level 2 certification in August 2025, enhancing its credibility in defense and national security sectors by meeting stringent cybersecurity standards [5] - MMS's current ratio at the end of Q3 fiscal 2025 was 2.27, well above the industry average of 1.35, suggesting strong liquidity and ability to meet short-term obligations [6] Group 4: Dividend History - Maximus has consistently paid dividends over the past four fiscal years, with payouts of $68.8 million, $68.7 million, $68 million, and $72.9 million, reflecting the company's commitment to shareholder value [9]