Maximus (MMS) AI Stock Analysis

Maximus

(NYSE:MMS)

Select Model

Rating:77Outperform

Price Target:$70.00▲(5.26% Upside)

Action:reiterated

Date:10/21/26

The overall score of 77 reflects a company with strong financial fundamentals and an exceptionally attractive valuation, which are the most significant positive factors. These are tempered by mixed technical signals and near-term operational headwinds highlighted in the earnings call, including reduced guidance and working capital pressures, which introduce uncertainty despite a robust long-term growth pipeline.

Positive Factors

Strong cash generationConsistently positive free cash flow with conversion near 90% of net income indicates strong earnings quality and internally generated funding. This supports investment, debt management, and shareholder returns while reducing reliance on external capital across the next several quarters.

Negative Factors

Revenue contractionA TTM revenue decline signals that profitability improvements have not yet translated into sustained top-line expansion. If contract awards, renewals, or program timing remain pressured, weaker scale could limit operating leverage and make future growth more dependent on new wins.

Maximus Key Performance Indicators (KPIs)

Operating Income by Segment

Chart Insights

Data provided by:

The Fly

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

Market Cap: $3.34B
Dividend Yield: 2.02%
Average Volume (3M): 651.25K
Price to Earnings (P/E): 9.3
Beta (1Y): 0.33
Revenue Growth: -3.32%
EPS Growth: 24.98%
Country: US
Employees: 37,200
Sector: Industrials
Sector Strength: 63
Industry: Specialty Business Services

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 International S...

How the Company Makes Money

Maximus makes money primarily by delivering services to government agencies under contracted arrangements. Its core revenue stream is service revenue earned from administering and operating government programs—such as eligibility and enrollment proce...

Maximus Earnings Call Summary

Earnings Call Date:Aug 05, 2026(Q3-2026)|% Change Since:5.93%|Next Earnings Date:Nov 18, 2026

Earnings Call SentimentPositive

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.

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

Maximus demonstrates solid financial health with strong profitability and cash flow. TTM net income grew 16% year-over-year, and free cash flow conversion is high at 90% of net income. The balance sheet is robust with a 21.8% return on equity, though a slight increase in leverage and a 1.3% revenue decline are minor concerns.

Income Statement

78Positive

Balance Sheet

82Very Positive

Cash Flow

85Very Positive

Financial statement breakdown
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	715.71M	662.64M	614.48M	443.75M	455.86M	489.14M
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	1.73B	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	433.23M	366.16M	401.07M	223.65M	233.69M	480.76M
Operating Cash Flow	469.51M	429.37M	515.26M	314.34M	289.84M	517.32M
Investing Cash Flow	-17.56M	-60.26M	-129.10M	-80.96M	-54.01M	-1.84B
Financing Cash Flow	-403.16M	-343.88M	-275.65M	-250.80M	-248.27M	1.39B

Maximus Technical Analysis

Technical Analysis SentimentPositive

Last Price66.50

Price Trends

50DMA57.91Positive

100DMA57.78Positive

200DMA64.32Negative

Market Momentum

MACD1.84Negative

RSI67.00Neutral

STOCH63.94Neutral

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 66.50 is above the 20-day moving average (MA) of 60.23, above the 50-day MA of 57.91, and above the 200-day MA of 64.32, indicating a neutral trend. The MACD of 1.84 indicates Negative momentum. The RSI at 67.00 is Neutral, neither overbought nor oversold. The STOCH value of 63.94 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 37 risk factors in its most recent earnings report. Maximus reported the most risks in the "Legal & Regulatory" category.

Legal & Regulatory - Litigation, compliance, new legislation, and taxation risks

Latest Risks Added

0 New Risks

Maximus Peers Comparison

Overall Rating

UnderperformOutperform

Sector (63)

Financial Indicators

MMS against its peers
Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
III	77Outperform	$295.32M	25.20	12.32%	2.95%	4.18%	50.80%
MMS	77Outperform	$3.34B	9.34	21.72%	2.02%	-3.32%	24.98%
CBZ	70Outperform	$3.01B	21.99	7.96%	―	3.74%	48.86%
FA	66Neutral	$3.71B	146.47	1.93%	―	32.89%	―
Sector *	63Neutral	$10.79B	15.43	7.44%	2.01%	2.89%	-14.66%
ABM	63Neutral	$3.13B	19.24	9.44%	2.17%	6.00%	50.32%
DLHC	44Neutral	$52.61M	-2.41	-20.12%	―	-29.52%	-564.69%

* Industrials Sector Average

Performance Comparison

MMS and its peers over the selected period
Ticker	Company Name	Price	Change	% Change
MMS	Maximus	63.72	-18.11	-22.13%
ABM	Abm Industries Incorporated	53.48	11.41	27.12%
CBZ	CBIZ Inc	54.98	-0.11	-0.20%
III	Information Services Group	6.10	0.26	4.49%
DLHC	DLH Holdings Corp.	3.63	-2.32	-38.99%
FA	First Advantage Corporation	21.59	9.25	74.96%

Maximus Corporate Events

Business Operations and StrategyM&A Transactions

Maximus to Acquire Agile Defense in Strategic Deal

Positive

Oct 20, 2026

On October 19, 2026, Maximus announced it had entered a definitive agreement to acquire Agile Defense, LLC, a privately held provider of cybersecurity, digital transformation, data analytics, and AI services to U.S. defense and national security agen...

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: Oct 20, 2026

Maximus AI Stock Analysis