Yahoo Finance Maximus (MMS) Up 2.9% Since Last Earnings Report: Can It Continue?
A month has gone by since the last earnings report for Maximus (MMS). Shares have added about 2.9% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Maximus due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.
Maximus Beats Q2 Earnings Estimates
Maximus, Inc.’s reported impressive second-quarter fiscal 2024 results, with earnings and revenues surpassing the Zacks Consensus Estimate.
Quarterly adjusted earnings of $1.57 per share beat the Zacks Consensus Estimate by 19.9% and increased 96.3% on a year-over-year basis. Revenues of $1.35 billion beat the consensus mark by 5.4% and rose 11.7% from the year-ago quarter.
Segmental Revenues
The U.S. Services segment’s revenues of $486.1 million increased 8.1% year over year and surpassed our estimate of $475.2 million. The U.S. Federal Services segment’s revenues of $701.7 million rose 20.1% from the year-ago reported number and beat our estimate of $626 million. The Outside the U.S. segment’s revenues of $160.5 million decreased 7.2% year over year and missed our estimated $170.5 million.
Sales and Pipeline
Year-to-date signed contract awards, as of Mar 31, totaled $568 million and contracts pending (awarded but unsigned) amounted to $797 million. The sales pipeline, as of Mar 31, was $37.8 billion. This included $1.3 billion in pending proposals, $987 billion in proposals in preparation and $35.5 billion in opportunities tracking. The book-to-bill ratio as of Mar 31, 2023, was 1.1X.
Operating Performance
Adjusted operating income of $149.1 million increased 71.3% from the year-ago quarter’s actual. This compares with our estimate of $121.2 million. The adjusted operating income margin of 11.2% increased 390 basis points year over year, surpassing our estimate of 9.5%.
Balance Sheet and Cash Flow
Maximus ended the quarter with a cash and cash equivalents balance of $77.4 million compared with the $104.2 million reported at the end of first-quarter fiscal 2024.
The company utilized $108.8 million in cash from operations. Capital expenditure was $3.1 million and the adjusted free cash flow amounted to $105.8 million.
Fiscal 2024 Guidance
For fiscal 2024, the company expects revenues of $5.15-$5.25 billion compared with the $5.05-$5.2 billion mentioned previously. Maximus expects adjusted earnings to be $5.65-$5.85 per share compared with the $5.2-$5.5 per share stated previously.
Free cash flow is now anticipated between $330 million and $370 million compared with the $300-$350 million mentioned previously. Maximus expects interest expenses of $77 million compared with the $73 million stated earlier.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed an upward trend in estimates revision.
The consensus estimate has shifted 9.68% due to these changes.
VGM Scores
At this time, Maximus has a strong Growth Score of A, though it is lagging a bit on the Momentum Score front with a B. Charting a somewhat similar path, the stock was allocated a grade of A on the value side, putting it in the top 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been trending upward for the stock, and the magnitude of these revisions looks promising. It comes with little surprise Maximus has a Zacks Rank #1 (Strong Buy). We expect an above average return from the stock in the next few months.
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Maximus, Inc. (MMS) : Free Stock Analysis Report
