Maximus (MMS) came out with quarterly earnings of $2.16 per share, beating the Zacks Consensus Estimate of $1.39 per share. This compares to earnings of $1.74 per share a year ago. These figures are adjusted for non- recurring items. This quarterly report represents an earnings surprise of +55.40%. A quarter ago, it was expected that this government health services provider would post earnings of $1.37 per share when it actually produced earnings of $2.01, delivering a surprise of +46.72%. Over the last fou ...

FOR IMMEDIATE RELEASE CONTACT: James Francis, VP - IR Jessica Batt, VP - IR Date: August 7, 2025 IR@maximus.com Maximus Reports Fiscal Year 2025 Third Quarter Results Third Consecutive Raise to FY25 Guidance Caswell added, "Over the 50 years that Maximus has served as a trusted and impartial delivery partner for government, we've consistently demonstrated adaptability as legislation and regulatory changes lead to new program imperatives and advanced technologies like AI reshape citizen services." Third Quar ...

While investors typically use consensus earnings and revenue estimates as a yardstick to evaluate the company's quarterly performance, scrutinizing analysts' projections for some of the company's key metrics can offer a more comprehensive perspective. Bearing this in mind, let's now explore the average estimates of specific Maximus metrics that are commonly monitored and projected by Wall Street analysts. Analysts on Wall Street project that Maximus (MMS) will announce quarterly earnings of $1.39 per share ...

Core Viewpoint - The article emphasizes the importance of value investing and highlights Maximus (MMS) as a strong value stock based on various financial metrics [1][7]. Valuation Metrics - Maximus (MMS) has a Zacks Rank of 2 (Buy) and a Value grade of A, indicating it is a high-quality value stock [3]. - The stock's P/E ratio is 11.25, which is lower than the industry average of 12.87, suggesting it may be undervalued [3]. - MMS's P/B ratio is 2.4, compared to the industry's average P/B of 3.22, indicating an attractive valuation [4]. - The P/S ratio for MMS is 0.75, slightly below the industry's average of 0.77, reinforcing its value proposition [5]. - MMS has a P/CF ratio of 9.39, significantly lower than the industry's average P/CF of 18.99, further suggesting it is undervalued [6]. Investment Outlook - The combination of these metrics indicates that Maximus is likely undervalued, and its strong earnings outlook makes it an appealing investment opportunity [7].

Core Viewpoint - Maximus (MMS) has been upgraded to a Zacks Rank 1 (Strong Buy), indicating a positive outlook on its earnings estimates, which significantly influence stock prices [1][3]. Earnings Estimates and Stock Price Impact - The Zacks rating system emphasizes the correlation between changes in earnings estimates and stock price movements, driven by institutional investors adjusting their valuations based on these estimates [4][6]. - Rising earnings estimates for Maximus suggest an improvement in the company's underlying business, which could lead to higher stock prices as investors respond positively [5][10]. Zacks Rank System - The Zacks Rank system classifies stocks into five groups based on earnings estimates, with Zacks Rank 1 stocks historically generating an average annual return of +25% since 1988 [7]. - Only the top 5% of Zacks-covered stocks receive a "Strong Buy" rating, indicating superior earnings estimate revisions, positioning Maximus favorably for potential market-beating returns [9][10]. Recent Earnings Estimate Revisions - For the fiscal year ending September 2025, Maximus is expected to earn $6.49 per share, with a 6.7% increase in the Zacks Consensus Estimate over the past three months [8].

Group 1: Labor Market Overview - The U.S. job market exceeded expectations for the 11th consecutive month, with 147,000 jobs added in June compared to the forecast of 110,000 [1] - The unemployment rate decreased from 4.2% to 4.1%, better than the expected 4.3% [1] - Average hourly earnings increased by 0.2% month-over-month and 3.7% year-over-year [1] Group 2: Payroll Stocks Performance - Paylocity Holding Corporation (PCTY) and Dayforce (DAY) saw stock increases of over +2% and +1% respectively, both classified as Zacks Rank 3 (Hold) [2] - Paychex (PAYX) is noted for its integrated Human Capital Management (HCM) solutions and has a Zacks Rank 2 (Buy), with expectations for steady growth in top and bottom lines [3] - Maximus (MMS) is identified as a strong buy with a Zacks Rank 1 (Strong Buy), despite a 21% decline from its 52-week high, attributed to a spike in FY25 EPS estimates by 7% [5] Group 3: Market Reactions and Economic Implications - The dip in Maximus stock followed the announcement of 7,000 federal government job cuts, but this may be an overreaction given the addition of 47,000 state government jobs and 19,000 social assistance jobs [6] - The resilient labor market and better-than-expected jobs report contribute positively to the stock market's recovery, making payroll stocks particularly attractive [8]

Maximus (MMS) has been on a downward spiral lately with significant selling pressure. After declining 6.1% over the past four weeks, the stock looks well positioned for a trend reversal as it is now in oversold territory and there is strong agreement among Wall Street analysts that the company will report better earnings than they predicted earlier.We use Relative Strength Index (RSI), one of the most commonly used technical indicators, for spotting whether a stock is oversold. This is a momentum oscillator ...

Core Insights - Maximus, Inc. (MMS) reported better-than-expected second-quarter fiscal 2025 results with adjusted earnings of $2.01 per share, exceeding the Zacks Consensus Estimate by 46.7% and increasing 28% year over year. Revenues reached $1.36 billion, surpassing the consensus mark by 5.8% and rising 1% from the previous year [1] Segmental Revenues - The U.S. Federal Services segment generated revenues of $777.9 million, an 11% increase from the prior year, beating the estimate of $687.2 million [2] - The Outside the U.S. segment reported revenues of $141.5 million, a 12% decrease year over year, but exceeded the anticipated $123.1 million [2] - The U.S. Services segment's revenues were $442.4 million, down 9% year over year, falling short of the estimate of $497.2 million [2] Sales and Pipeline - Year-to-date signed contract awards totaled $2.92 billion as of March 31, 2025, with contracts pending amounting to $451 million. The sales pipeline stood at $41.2 billion, including $1.97 billion in pending proposals, $3 billion in proposals in preparation, and $36.3 billion in tracking opportunities. The book-to-bill ratio was 0.8X on a trailing 12-month basis [3] Operating Performance - Operating income was $153 million, reflecting a 20% year-over-year increase, compared to the expected adjusted operating income of $138.6 million, which was down 16.2% year over year. The adjusted operating income margin improved to 11.2%, up 170 basis points year over year [4] Balance Sheet and Cash Flow - Maximus ended the quarter with cash and cash equivalents of $108 million, up from $73 million in the previous quarter. The company generated $42.7 million in cash from operations, with capital expenditures of $17.2 million, resulting in free cash flow of $25.5 million [5] Updated Fiscal 2025 Guidance - Maximus raised its earnings and revenue guidance for fiscal year 2025, now expecting total revenues between $5.25 billion and $5.4 billion, compared to the previous range of $5.2 billion to $5.35 billion. The midpoint of the new range ($5.325 billion) is above the Zacks Consensus Estimate of $5.31 billion [6] - Adjusted earnings are now anticipated in the range of $6.30 to $6.60 per share, up from the previous expectations of $5.90 to $6.20 per share, and higher than the current Zacks Consensus Estimate of $6.08. The adjusted EBITDA margin is expected to be approximately 11.7%, compared to the earlier expectation of 11.2% [7] - Free cash flow expectations remain unchanged between $355 million and $385 million, with forecasted interest expenses of approximately $78 million, up from the prior estimate of $75 million. The effective income tax rate is anticipated to be within 28-29%, with approximately 58 million shares expected to be outstanding on a full-year basis [8]

Revenue and Profitability - Revenue for the three months ended March 31, 2025, was $1,361,786 thousand, a 1.0% increase from $1,348,357 thousand in the same period of 2024[104] - Gross profit for the six months ended March 31, 2025, was $640,378 thousand, reflecting a 3.7% increase compared to $617,643 thousand for the same period in 2024[106] - Operating income for the three months ended March 31, 2025, was $152,968 thousand, up 19.9% from $127,494 thousand in the prior year[104] - The gross profit percentage for the three months ended March 31, 2025, improved to 24.9% from 23.6% in the same period of 2024[104] - Organic growth contributed $39,802 thousand (3.0%) to revenue for the three months ended March 31, 2025[105] - Adjusted EBITDA margin (Non-GAAP) improved to 13.7% for the three months ended March 31, 2025, compared to 11.7% in the previous year[154] Segment Performance - The U.S. Federal Services Segment reported revenue of $777,927 thousand for the three months ended March 31, 2025, a 10.9% increase from $701,702 thousand in the prior year[115] - U.S. Services Segment revenue for the three months ended March 31, 2025, was $442.35 million, a decrease of 9.0% compared to $486.12 million for the same period in 2024[120] - Gross profit margin for the U.S. Services Segment decreased to 25.3% in Q1 2025 from 26.8% in Q1 2024[120] - Outside the U.S. Segment revenue for the three months ended March 31, 2025, was $141.51 million, down 11.9% from $160.54 million in Q1 2024[124] - The full-year operating margin for the U.S. Services Segment is anticipated to be approximately 11% for fiscal year 2025[121] - The Outside the U.S. Segment is expected to achieve a full-year operating margin between 3% and 5% for fiscal year 2025[128] Tax and Financial Position - The effective tax rate for the six months ended March 31, 2025, was 31.6%, an increase from 25.2% in the same period of 2024, due to the divestiture of businesses[113] - The company expects an overall effective tax rate between 28.0% and 29.0% for fiscal year 2025, influenced by divestitures and non-recurring items[113] Cash Flow and Debt - As of March 31, 2025, the company had $108.1 million in cash and cash equivalents, indicating a strong liquidity position[129] - The company reported net cash used in operating activities of $37.3 million for the first six months of fiscal year 2025, compared to net cash provided of $152.1 million for the same period in 2024[134] - The company increased its term loan debt facility by $250 million in fiscal year 2025 to reduce revolving debt and meet working capital needs[137] - The effective interest rate on the company's debt as of March 31, 2025, was 5.4%[132] - Free cash flow for the six months ended March 31, 2025, is $(77,480,000), compared to $104,549,000 for the same period in 2024[146] Operational Metrics - Days Sales Outstanding (DSO) increased to 73 days as of March 31, 2025, compared to 61 days at September 30, 2024, indicating delays in payments[135] - Consolidated Net Total Leverage Ratio is 1.85, well below the maximum limit of 4.00:1.00 as per the Credit Agreement[144] - Consolidated EBITDA for the trailing twelve months ended March 31, 2025, is $754,403,000, with a net income of $300,021,000[143] - Consolidated Net Interest Coverage Ratio stands at 9.21, significantly above the minimum requirement of 3.00:1.00[144] Strategic Initiatives - The launch of Maximus Total Experience Management (TXM) aims to enhance customer experience through intelligent automation and cognitive computing[101] - The company has not recorded U.S. deferred income taxes on funds held in foreign jurisdictions, which may impact future cash flows[145] - The company continues to explore opportunities for remitting additional funds from foreign locations, considering working capital requirements and tax rules[145]

Financial Data and Key Metrics Changes - The company reported revenue of $1,360,000,000 for the quarter, reflecting a 3% organic growth year over year [6][30] - Adjusted EBITDA margin was 13.7%, in the upper end of the near-term guidance range [6][30] - Adjusted EPS was $2.01, compared to $1.57 for the prior year period [30][42] Business Line Data and Key Metrics Changes - U.S. Federal Services segment revenue increased by 10.9% to $778,000,000, driven by strong clinical assessments [33] - U.S. Services segment revenue decreased to $442,000,000, reflecting normalization after last year's Medicaid unwinding [35] - Outside the U.S. segment revenue decreased to $142,000,000, but organic growth was 4.6% [36] Market Data and Key Metrics Changes - The total pipeline of sales opportunities was $41,200,000,000, with approximately 55% representing new work [26] - Signed awards totaled $2,900,000,000 of total contract value through the second quarter [25] - The book to bill ratio was approximately 0.8 times, showing improvement from previous periods [26] Company Strategy and Development Direction - The company is focused on leveraging technology and innovation to drive efficient operations and enhance customer satisfaction [8][12] - MAXIMUS FORWARD initiatives aim to modernize programs through technology and performance-based contracting [7][8] - The company is exploring opportunities for efficiencies and innovation in response to government inquiries [13][14] Management's Comments on Operating Environment and Future Outlook - Management maintains a cautious view for the second half of the fiscal year due to evolving operating conditions [14][42] - The company anticipates a normalization in cash flow and collections in the fourth quarter [38][43] - There is optimism regarding the pipeline of opportunities, with an uptick in business proposals volume [29][30] Other Important Information - The company has been recognized by Fortune as one of America's most innovative companies, highlighting its commitment to operational innovation [27] - Cash provided by operating activities was $43,000,000, with free cash flow of $26,000,000 for the quarter [37] - The company ended the quarter with total debt of $1,510,000,000, yielding a net leverage ratio of 1.9 times [41] Q&A Session Summary Question: How should the market think about the guidance and weightings between Q3 and Q4? - Management indicated that the guidance reflects Q2 overperformance while maintaining a cautious approach for Q3 and Q4 due to visibility into potential moderation in clinical volumes [51][52] Question: Can you provide more color on the margin performance in the quarter? - The strong margin performance was attributed to increased volumes and investments in technology that improved operational efficiencies [55][56] Question: Are there potential delays in new work coming into the pipeline? - There has been some slowdown in the civilian agency space, but the company is still seeing opportunities and contract extensions that benefit incumbents [60][62] Question: What are the drivers behind the organic growth in the Outside the U.S. segment? - The organic growth was primarily driven by the functional assessment services contract in the UK, which provides a modest revenue increase compared to the predecessor contract [67]