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Maximus Stock Ascends 11% in Six Months: Buy, Hold or Sell?
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Maximus, Inc. (MMS - Free Report) shares have had an impressive run in the past six months. The stock has rallied 11% compared with the 8.7% growth of its industry and the 9.3% increase of the Zacks S&P 500 composite.
This rally aligns with the performance of its business services competitors, Booz Allen Hamilton (BAH - Free Report) , which has gained 7.9%, and Genpact (G - Free Report) , which has rallied 18.2% over the same period.
The stock closed at $92.69 in its last trading session, close to its 52-week high of $93.97, and traded above its 50-day moving average.
6 Months Price Performance
Image Source: Zacks Investment Research
A Leading Operator of Government Services Programs
With more than 40 years of experience, Maximus has grown to be a leading operator of government health and human services programs globally. The company’s business process management expertise and ability to deliver cost-effective, efficient and high-scale solutions position it as a lucrative partner to governments. Maximus maintains solid relationships and a strong reputation with governments, while long-term contracts provide it with predictable recurring revenue streams. The company continuously seeks long-term relationships with clients in both existing and adjacent markets. It is also focused on expanding its foothold in clinical services as well as long-term services and supports.
Increased longevity and more complex health needs have increased the need for government social benefits and safety-net programs. This should continue driving demand for the company’s services.
Maximus banks on the subject matter expertise of its workforce in the critical aspects of the design, implementation and operation of government health and human services programs. The company has a strong cash flow from operations due to its profitable business and efficient management of receivables. In the event of an urgent requirement for working capital, the company can borrow $600 million through a credit agreement with JPMorgan Chase N.A. Its expertise in government programs and its ability to deliver defined, measurable outcomes differentiates Maximus. All these factors provide the company with a competitive advantage over its peers.
Consistent Dividend Payer
Commitment to shareholder returns makes Maximus a reliable way for investors to compound wealth over the long term. During fiscal 2023, 2022 and 2021, the company paid cash dividends of $68.1 million, $68.7 million and $68.8 million, respectively.
Strong Liquidity
Maximus' current ratio (a measure of liquidity) at the end of third-quarter fiscal 2024 was pegged at 1.59, higher than the industry’s 1.55. A current ratio of more than 1 indicates that the company should not have problems meeting its short-term obligations.
Top and Bottom-Line Growth Prospects Strong
The Zacks Consensus Estimate for MMS’ fourth-quarter fiscal 2024 sales stands at $1.29 billion, suggesting year-over-year growth of 2.6%. Revenues for fiscal 2024 are expected to increase 7.7% year over year. The estimate for the fourth quarter of fiscal 2024 earnings stands at $1.47, suggesting year-over-year growth of 14%. Earnings for fiscal 2024 are expected to increase 59.8% year over year.
Is it the Right Time to Buy Now?
The stock closed its last trading session close to its 52-week high and above its 50-day moving average. Therefore, it may be wise for investors to wait for a potential correction.
While MMS remains fundamentally strong, a more advantageous entry point could emerge if the stock undergoes some price adjustment. The company's strong standing as a technology leader, facilitating the transformation of government programs to become dynamic and integrated, indicates significant long-term growth potential, but timing the market entry is crucial for maximizing investment returns.
Image: Bigstock
Maximus Stock Ascends 11% in Six Months: Buy, Hold or Sell?
Maximus, Inc. (MMS - Free Report) shares have had an impressive run in the past six months. The stock has rallied 11% compared with the 8.7% growth of its industry and the 9.3% increase of the Zacks S&P 500 composite.
This rally aligns with the performance of its business services competitors, Booz Allen Hamilton (BAH - Free Report) , which has gained 7.9%, and Genpact (G - Free Report) , which has rallied 18.2% over the same period.
The stock closed at $92.69 in its last trading session, close to its 52-week high of $93.97, and traded above its 50-day moving average.
6 Months Price Performance
A Leading Operator of Government Services Programs
With more than 40 years of experience, Maximus has grown to be a leading operator of government health and human services programs globally. The company’s business process management expertise and ability to deliver cost-effective, efficient and high-scale solutions position it as a lucrative partner to governments. Maximus maintains solid relationships and a strong reputation with governments, while long-term contracts provide it with predictable recurring revenue streams. The company continuously seeks long-term relationships with clients in both existing and adjacent markets. It is also focused on expanding its foothold in clinical services as well as long-term services and supports.
Increased longevity and more complex health needs have increased the need for government social benefits and safety-net programs. This should continue driving demand for the company’s services.
Maximus banks on the subject matter expertise of its workforce in the critical aspects of the design, implementation and operation of government health and human services programs. The company has a strong cash flow from operations due to its profitable business and efficient management of receivables. In the event of an urgent requirement for working capital, the company can borrow $600 million through a credit agreement with JPMorgan Chase N.A. Its expertise in government programs and its ability to deliver defined, measurable outcomes differentiates Maximus. All these factors provide the company with a competitive advantage over its peers.
Consistent Dividend Payer
Commitment to shareholder returns makes Maximus a reliable way for investors to compound wealth over the long term. During fiscal 2023, 2022 and 2021, the company paid cash dividends of $68.1 million, $68.7 million and $68.8 million, respectively.
Strong Liquidity
Maximus' current ratio (a measure of liquidity) at the end of third-quarter fiscal 2024 was pegged at 1.59, higher than the industry’s 1.55. A current ratio of more than 1 indicates that the company should not have problems meeting its short-term obligations.
Top and Bottom-Line Growth Prospects Strong
The Zacks Consensus Estimate for MMS’ fourth-quarter fiscal 2024 sales stands at $1.29 billion, suggesting year-over-year growth of 2.6%. Revenues for fiscal 2024 are expected to increase 7.7% year over year. The estimate for the fourth quarter of fiscal 2024 earnings stands at $1.47, suggesting year-over-year growth of 14%. Earnings for fiscal 2024 are expected to increase 59.8% year over year.
Is it the Right Time to Buy Now?
The stock closed its last trading session close to its 52-week high and above its 50-day moving average. Therefore, it may be wise for investors to wait for a potential correction.
While MMS remains fundamentally strong, a more advantageous entry point could emerge if the stock undergoes some price adjustment. The company's strong standing as a technology leader, facilitating the transformation of government programs to become dynamic and integrated, indicates significant long-term growth potential, but timing the market entry is crucial for maximizing investment returns.
MMS currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.