It has been about a month since the last earnings report for Maximus (MMS). Shares have lost about 3.7% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Maximus due for a breakout? 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 catalysts.
Maximus reported mixed fourth-quarter fiscal 2024 results. Earnings marginally missed the Zacks Consensus Estimate, but revenues beat the Zacks Consensus Estimate.
Quarterly adjusted earnings of $1.46 per share marginally lagged the Zacks Consensus Estimate but increased 13.2% on a year-over-year basis. Revenues of $1.32 billion beat the consensus mark by 1.8% and rose 4.4% from the year-ago quarter.
The U.S. Federal Services segment’s revenues of $675 million rose 9.4% from the year-ago reported number and beat our estimate of $642.8 million. The Outside the U.S. segment’s revenues of $177.2 million increased 5% from fourth-quarter fiscal 2023 and outpaced our anticipated $154.4 million. The U.S. Services segment’s revenues of $463.6 million decreased 2.2% year over year and missed our estimate of $487.1 million.
Year-to-date signed contract awards, as of Sept. 30, 2024, totaled $2.2 billion. Contracts pending (awarded but unsigned) amounted to $312 million. The sales pipeline, as of Sept. 30, was $54.3 billion. This included $4.22 billion in pending proposals, $7.12 billion in proposals in preparation and $42.9 billion in opportunities tracking.
The book-to-bill ratio, as of Sept. 30, 2023, was 0.4 on a trailing 12-month basis.
Adjusted operating income of $134.79 million increased 7% year over year. This compares with our expected adjusted operating income of $139.6 million, down 3.5% year over year. The adjusted operating income margin of 10.2% increased 20 basis points year over year.
Maximus ended the quarter with a cash and cash equivalent balance of $183.12 million compared with $102.79 million reported at the end of the prior quarter.
The company used $163.83 million in cash from operations. Capital expenditures were $31.95 million, and free cash flow amounted to $131.8 million.
Total revenues are expected between $5.28 billion and $5.43 billion. Adjusted earnings are anticipated in the range of $5.70-$6.00 per share. Free cash flow is expected between $345 million and $375 million for fiscal year 2025.
The company forecasts expenses of $92 million for amortization of intangible assets, $45 million for depreciation and amortization, interest expenses of approximately $65 million, an effective income tax rate within 25% and weighted average shares outstanding within 61 million for fiscal 2025.
An adjusted EBITDA margin, which excludes divestiture-related charges, of approximately 11% is anticipated for the full year.
It turns out, fresh estimates flatlined during the past month.
Currently, Maximus has a great Growth Score of A, though it is lagging a lot on the Momentum Score front with a C. However, 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.
Maximus has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Maximus, Inc. (MMS) : Free Stock Analysis Report
To read this article on Zacks.com click here.
Zacks Investment Research
Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.