Maximus (MMS) Up 2.9% Since Last Earnings Report: Can It Continue?

Core Viewpoint - Maximus reported strong second-quarter fiscal 2024 results, with earnings and revenues exceeding expectations, indicating positive momentum leading into future earnings releases [2][10]. Financial Performance - Adjusted earnings for Q2 were $1.57 per share, surpassing the Zacks Consensus Estimate by 19.9% and increasing 96.3% year-over-year [2]. - Revenues reached $1.35 billion, beating the consensus mark by 5.4% and rising 11.7% from the previous year [2]. Segmental Revenues - U.S. Services segment revenues were $486.1 million, an 8.1% year-over-year increase, exceeding estimates [3]. - U.S. Federal Services segment revenues were $701.7 million, a 20.1% increase from the prior year, also beating estimates [3]. - Outside the U.S. segment revenues were $160.5 million, a 7.2% decrease year-over-year, missing estimates [3]. Sales and Pipeline - Year-to-date signed contract awards totaled $568 million, with pending contracts amounting to $797 million [4]. - The sales pipeline was valued at $37.8 billion, including $1.3 billion in pending proposals and $35.5 billion in tracking opportunities [4]. - The book-to-bill ratio was 1.1X as of March 31, 2023 [4]. Operating Performance - Adjusted operating income was $149.1 million, a 71.3% increase from the previous year, surpassing estimates [5]. - The adjusted operating income margin was 11.2%, up 390 basis points year-over-year, exceeding expectations [5]. Balance Sheet and Cash Flow - Cash and cash equivalents at the end of the quarter were $77.4 million, down from $104.2 million at the end of the previous quarter [6]. - The company utilized $108.8 million in cash from operations, with capital expenditures of $3.1 million and adjusted free cash flow of $105.8 million [6]. Fiscal 2024 Guidance - For fiscal 2024, Maximus expects revenues of $5.15-$5.25 billion, adjusted earnings of $5.65-$5.85 per share, and free cash flow between $330 million and $370 million [7]. - Interest expenses are anticipated to be $77 million [7]. Estimate Revisions - There has been an upward trend in estimates revisions over the past month, with the consensus estimate shifting by 9.68% [8][9]. Stock Outlook - Maximus holds a strong Growth Score of A and an aggregate VGM Score of A, indicating strong potential for above-average returns in the coming months [9][10].