Maximus (MMS) Down 3.7% Since Last Earnings Report: Can It Rebound?

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 Misses Q4 Earnings EstimatesMaximus 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.Segmental Revenues of MaximusThe 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.MMS's Sales & PipelineYear-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.MMS's Operating PerformanceAdjusted 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' Balance Sheet & Cash FlowMaximus 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.MMS's Fiscal 2025 GuidanceTotal 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.How Have Estimates Been Moving Since Then?It turns out, fresh estimates flatlined during the past month.VGM ScoresCurrently, 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.OutlookMaximus has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.Zacks Names #1 Semiconductor StockIt's only 1/9,000th the size of NVIDIA which skyrocketed more than +800% since we recommended it. NVIDIA is still strong, but our new top chip stock has much more room to boom.With strong earnings growth and an expanding customer base, it's positioned to feed the rampant demand for Artificial Intelligence, Machine Learning, and Internet of Things. Global semiconductor manufacturing is projected to explode from $452 billion in 2021 to $803 billion by 2028.See This Stock Now for Free >>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 ReportTo read this article on Zacks.com click here.Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks