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Maximus
(NYSE:MMS)
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Rating:71Outperform
Price Target:
$64.00
▲(7.26% Upside)
Action:Reiterated
Date:08/07/26
The score is driven primarily by solid financial performance (improving profitability and strong cash conversion) and attractive valuation (low P/E plus dividend). Offsetting these positives are weaker technicals (price below key moving averages) and a mixed earnings update, including reduced EPS guidance and near-term working-capital/book-to-bill headwinds despite improving margins and a sizable pipeline.
Positive Factors
Free Cash Flow Conversion
FCF conversion near 90% of net income indicates strong cash conversion and earnings quality. This durable cash generation supports reinvestment, buybacks and debt reduction, improving financial flexibility and resilience across procurement cycles over the next 2–6 months.
Negative Factors
Working Capital Volatility / Elevated DSO
Elevated and variable DSO reflects client administrative delays and creates cash flow volatility. That working‑capital variability can pressure liquidity and FCF timing, complicating capital allocation and leverage targets until collections stabilize over ensuing quarters.
Read all positive and negative factors
Positive Factors
Negative Factors
Free Cash Flow Conversion
FCF conversion near 90% of net income indicates strong cash conversion and earnings quality. This durable cash generation supports reinvestment, buybacks and debt reduction, improving financial flexibility and resilience across procurement cycles over the next 2–6 months.
Read all positive factors
Maximus (MMS) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$3.17B
Dividend Yield2.09%
Average Volume (3M)738.23K
Price to Earnings (P/E)9.0
Beta (1Y)0.45
Revenue Growth-1.44%
EPS Growth33.09%
CountryUS
Employees37,200
SectorIndustrials
Sector Strength72
IndustrySpecialty Business Services
Share Statistics
EPS (TTM)6.82
Shares Outstanding52,540,363
10 Day Avg. Volume634,073
30 Day Avg. Volume738,231
Financial Highlights & Ratios
PEG Ratio1.56
Price to Book (P/B)3.13
Price to Sales (P/S)0.97
P/FCF Ratio14.33
Enterprise Value/Market Cap<0.01
Enterprise Value/Revenue<0.01
Enterprise Value/Gross Profit<0.01
Enterprise Value/Ebitda<0.01
Forecast
1Y Price Target
$100.00Price Target Upside67.59% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering1
EPS Forecast (FY)8.44
Revenue Forecast (FY)$5.30B
Maximus Business Overview & Revenue Model
Company Description
Maximus, Inc. specializes in delivering business process services (BPS) tailored for governmental health and human welfare initiatives. Its operations are structured into three main divisions: U.S. Services, U.S. Federal Services, and Internationa...
How the Company Makes Money
Maximus makes money primarily by performing outsourced services for government agencies under contracts and task orders, earning revenue as it delivers contracted work. Its core revenue streams typically come from: (1) service delivery contracts w...
Maximus Earnings Call Summary
Earnings Call Date:Aug 06, 2026
(Q3-2026)
| % Change Since: |
Next Earnings Date:Nov 19, 2026
Earnings Call Sentiment Positive
The call presents a generally constructive operational and strategic picture — Q3 revenue was in line with expectations, margins improved year-over-year, a large $50.4B pipeline and $1.25B of signed awards support medium/long-term growth, AI adoption is delivering measurable margin benefits, and collections momentum has begun to relieve working capital stress. However, notable near-term headwinds include a customer-directed pause of VA MDE incentives that reduced FY26 EPS guidance by ~$0.35, elevated DSO and a Q3 free cash flow outflow, a slowed procurement environment with a trailing book-to-bill of ~0.5x, and modest profitability in Outside the U.S. Taken together, the company appears to be navigating temporary timing and contract-driven challenges while maintaining margin progress, a sizable pipeline, disciplined capital allocation, and strategic investments that support growth into FY2027.Positive Updates
Quarterly Revenue In Line with Expectations
Q3 revenue of $1.28 billion was in line with expectations and Management reiterated full-year revenue guidance of $5.2B–$5.35B (bias toward lower end).
Negative Updates
VA MDE Incentive Pause Reduces Near-Term Earnings
Customer-directed temporary pause of performance incentives on the VA MDE program effective July 1, 2026 removed assumed Q4 incentive contribution, reducing FY26 diluted EPS guidance midpoint by ~$0.35 (prior midpoint $8.40 → new midpoint $8.05, a ~4.2% reduction). Management assumes the pause through Dec 31, 2026 but noted scenarios could vary.
Read all updates
Q3-2026 Updates
Positive
Negative
Quarterly Revenue In Line with Expectations
Q3 revenue of $1.28 billion was in line with expectations and Management reiterated full-year revenue guidance of $5.2B–$5.35B (bias toward lower end).
Read all positive updates
Company Guidance
The company reiterated fiscal 2026 revenue guidance of $5.20–$5.35 billion (bias toward the low end) and issued revised adjusted diluted EPS guidance of $7.90–$8.20 (midpoint $8.05, down $0.35 from the prior $8.40), which corresponds to a full‑year adjusted EBITDA margin of ~13.7% and implies Q4 adjusted diluted EPS at the midpoint of $1.91 (Q4 adjusted EBITDA margin roughly ~13%); free cash flow is now expected to be $425–$475 million, interest expense ~ $88 million, and the full‑year tax rate 24–24.5%; segment assumptions include U.S. Federal Services operating margin 16.5–17.0% for the year (Q4 14.5–15.0%), U.S. Services 9.5–10.0% (includes a $6.9M noncash charge), and Outside the U.S. breakeven (implying a profitable Q4); liquidity and balance sheet metrics: Q3 total debt $1.65B (Term Loan B raised $325M), consolidated net leverage 2.0x (target 2x–3x), Q3 DSO was 98 days but expected to finish the year below 70 days ( ~$245M collected since June 30), Q3 cash used in operations was $(125)M and Q3 free cash flow $(137)M; share activity: repurchased ~0.75M shares for $50M in Q3, $400M authorization remains available, and ~8.3M shares (~14% of beginning outstanding) repurchased since FY2025.Maximus Financial Statement Overview
Summary
Income Statement
73
Positive
Balance Sheet
78
Positive
Cash Flow
74
Positive
| Breakdown | TTM | Sep 2025 | Sep 2024 | Sep 2023 | Sep 2022 | Sep 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 5.25B | 5.43B | 5.31B | 4.90B | 4.63B | 4.25B |
| Gross Profit | 1.28B | 1.25B | 1.16B | 934.02M | 849.35M | 902.62M |
| EBITDA | 730.59M | 674.75M | 624.28M | 456.45M | 464.76M | 502.74M |
| Net Income | 370.89M | 319.03M | 306.91M | 161.79M | 203.83M | 291.20M |
Balance Sheet | ||||||
| Total Assets | 4.37B | 4.07B | 4.13B | 3.99B | 3.99B | 4.12B |
| Cash, Cash Equivalents and Short-Term Investments | 56.95M | 260.46M | 235.76M | 122.09M | 136.79M | 156.57M |
| Total Debt | 56.60M | 1.44B | 1.28B | 1.43B | 1.51B | 1.71B |
| Total Liabilities | 2.63B | 2.40B | 2.29B | 2.32B | 2.44B | 2.64B |
| Stockholders Equity | 1.74B | 1.67B | 1.84B | 1.67B | 1.55B | 1.48B |
Cash Flow | ||||||
| Free Cash Flow | 361.58M | 366.16M | 401.07M | 223.65M | 233.69M | 480.76M |
| Operating Cash Flow | 414.63M | 429.37M | 515.26M | 314.34M | 289.84M | 517.32M |
| Investing Cash Flow | -21.43M | -60.26M | -129.10M | -80.96M | -54.01M | -1.84B |
| Financing Cash Flow | -359.54M | -343.88M | -275.65M | -250.80M | -248.27M | 1.39B |
Maximus Technical Analysis
Negative
59.67
Price Trends
58.91
Positive
61.79
Negative
72.74
Negative
Market Momentum
0.75
Positive
48.59
Neutral
61.82
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For MMS, the sentiment is Negative. The current price of 59.67 is below the 20-day moving average (MA) of 59.73, above the 50-day MA of 58.91, and below the 200-day MA of 72.74, indicating a neutral trend. The MACD of 0.75 indicates Positive momentum. The RSI at 48.59 is Neutral, neither overbought nor oversold. The STOCH value of 61.82 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for MMS.
Maximus Risk Analysis
Maximus disclosed 37 risk factors in its most recent earnings report. Maximus reported the most risks in the "Legal & Regulatory" 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
UnderperformOutperform
Sector (63)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
72 Outperform | $2.95B | 25.15 | 6.60% | ― | 14.32% | 22.34% | |
71 Outperform | $3.17B | 8.95 | 21.72% | 2.11% | -1.44% | 33.09% | |
67 Neutral | $2.81B | 18.36 | 8.94% | 2.38% | 6.53% | 107.41% | |
67 Neutral | $5.09B | 44.26 | 5.32% | 0.49% | 1.41% | -22.01% | |
65 Neutral | $14.98B | 41.89 | 11.23% | 0.81% | 10.15% | 3.07% | |
65 Neutral | $3.40B | 403.25 | 1.93% | ― | 53.53% | ― | |
63 Neutral | $10.79B | 15.43 | 7.44% | 2.01% | 2.89% | -14.66% |
* Industrials Sector Average
MMS
Maximus
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-27.13%
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24.01
8.28
52.64%
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.