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Maximus (MMS) Stock Rises 9% Since Q1 Earnings Beat Estimates
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Maximus, Inc. (MMS - Free Report) reported impressive first-quarter fiscal 2024 results, with both earnings and revenues beating the Zacks Consensus Estimate.
The stock climbed 8.7% since the earnings release on Feb 7 in response to the better-than-expected results. The company raised its bottom-line guidance for fiscal 2024.
Maximus currently expects adjusted earnings to be in the range of $5.2-$5.5 per share compared with the previous guidance of $5.05-$5.35 per share. The midpoint ($5.35) of the revised guided range is below the current Zacks Consensus Estimate of earnings of $5.38 per share.
Adjusted operating income is expected to be between $503 million and $528 million compared with the prior expectation of $488 million and $513 million.
Quarterly adjusted earnings of $1.34 per share surpassed the Zacks Consensus Estimate by 4.7% and increased 42.6% year over year. Revenues of $1.33 billion beat the consensus mark by 3.5% and increased 6.2% year over year.
The U.S. Services segment’s revenues of $489.8 million grew 11.5% year over year and beat our estimate of $479.3 million. The U.S. Federal Services segment’s revenues of $677.1 million increased 9.5% from the year-ago reported number and surpassed our estimate of $614.2 million. The Outside the U.S. segment’s revenues of $160.1 million decreased 16.4% year over year and lagged our estimate of $186.1 million.
Sales and Pipeline
Year-to-date signed contract awards, as of Dec 31, totaled $422 million and contracts pending (awarded but unsigned) amounted to $802 million. The sales pipeline, as of Dec 31, was $37.7 billion. This included $933 million in pending proposals, $1.01 billion in proposals in preparation and $35.7 billion in opportunities tracking. The book-to-bill ratio as of Dec 31, 2023, was 1.2x.
Operating Performance
Adjusted operating income of $131.9 million increased 34.1% year over year. This compares with our expected adjusted operating income of $122.6 million, up 24.8% year over year.
Adjusted operating income margin of 9.9% increased 200 basis points year over year. This compares with our expected adjusted operating income margin of 9.6%, up 170 basis points year over year.
Balance Sheet and Cash Flow
Maximus ended the quarter with a cash and cash equivalents balance of $104.2 million compared with $65.4 million reported at the end of the prior quarter.
The company generated $21.6 million in cash from operations. Capital expenditures were $22.2 million and free cash outflow amounted to $639 million.
Other Guidance
The company continues to expect fiscal 2024 revenues to be in the range of $5.05-$5.2 billion. The midpoint ($5.125 billion) is, however, lower than the current Zacks Consensus Estimate of $5.17 billion.
Free cash flow is now anticipated to range between $300 million and $350 million compared with the prior guidance of $290 million to $340 million. Maximus expects interest expense of around $73 million, an effective income tax rate of 24.5% to 25.5%, and weighted average shares outstanding between 62.2 million and 62.2 million.
Currently, Maximus carries a Zacks Rank #3 (Hold).
Quarterly earnings of 83 cents per share beat the consensus mark by 1.2% but declined 39.4% year over year. RHI’s revenues of $1.5 billion beat the consensus mark by a slight margin but decreased 14.7% year over year.
Aptiv (APTV - Free Report) reported mixed fourth-quarter 2023 results, with earnings beating the Zacks Consensus Estimate but revenues missing the same.
Adjusted earnings of $1.4 per share beat the Zacks Consensus Estimate by 8.5% and increased 10.2% year over year. APTV’s revenues of $4.9 billion missed the Zacks Consensus Estimate by 0.5% but increased 6% year over year.
S&P Global (SPGI - Free Report) reported mixed fourth-quarter results, wherein earnings missed the Zacks Consensus Estimate but revenues beat the same.
Adjusted EPS of $3.13 missed the Zacks Consensus Estimate by 0.6% but increased 23.2% year over year. Revenues of $3.2 billion surpassed the consensus estimate by 0.5% and improved 7.3% year over year.
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Maximus (MMS) Stock Rises 9% Since Q1 Earnings Beat Estimates
Maximus, Inc. (MMS - Free Report) reported impressive first-quarter fiscal 2024 results, with both earnings and revenues beating the Zacks Consensus Estimate.
The stock climbed 8.7% since the earnings release on Feb 7 in response to the better-than-expected results. The company raised its bottom-line guidance for fiscal 2024.
Maximus currently expects adjusted earnings to be in the range of $5.2-$5.5 per share compared with the previous guidance of $5.05-$5.35 per share. The midpoint ($5.35) of the revised guided range is below the current Zacks Consensus Estimate of earnings of $5.38 per share.
Adjusted operating income is expected to be between $503 million and $528 million compared with the prior expectation of $488 million and $513 million.
Quarterly adjusted earnings of $1.34 per share surpassed the Zacks Consensus Estimate by 4.7% and increased 42.6% year over year. Revenues of $1.33 billion beat the consensus mark by 3.5% and increased 6.2% year over year.
Maximus, Inc. Price, Consensus and EPS Surprise
Maximus, Inc. price-consensus-eps-surprise-chart | Maximus, Inc. Quote
Segmental Revenues
The U.S. Services segment’s revenues of $489.8 million grew 11.5% year over year and beat our estimate of $479.3 million. The U.S. Federal Services segment’s revenues of $677.1 million increased 9.5% from the year-ago reported number and surpassed our estimate of $614.2 million. The Outside the U.S. segment’s revenues of $160.1 million decreased 16.4% year over year and lagged our estimate of $186.1 million.
Sales and Pipeline
Year-to-date signed contract awards, as of Dec 31, totaled $422 million and contracts pending (awarded but unsigned) amounted to $802 million. The sales pipeline, as of Dec 31, was $37.7 billion. This included $933 million in pending proposals, $1.01 billion in proposals in preparation and $35.7 billion in opportunities tracking. The book-to-bill ratio as of Dec 31, 2023, was 1.2x.
Operating Performance
Adjusted operating income of $131.9 million increased 34.1% year over year. This compares with our expected adjusted operating income of $122.6 million, up 24.8% year over year.
Adjusted operating income margin of 9.9% increased 200 basis points year over year. This compares with our expected adjusted operating income margin of 9.6%, up 170 basis points year over year.
Balance Sheet and Cash Flow
Maximus ended the quarter with a cash and cash equivalents balance of $104.2 million compared with $65.4 million reported at the end of the prior quarter.
The company generated $21.6 million in cash from operations. Capital expenditures were $22.2 million and free cash outflow amounted to $639 million.
Other Guidance
The company continues to expect fiscal 2024 revenues to be in the range of $5.05-$5.2 billion. The midpoint ($5.125 billion) is, however, lower than the current Zacks Consensus Estimate of $5.17 billion.
Free cash flow is now anticipated to range between $300 million and $350 million compared with the prior guidance of $290 million to $340 million. Maximus expects interest expense of around $73 million, an effective income tax rate of 24.5% to 25.5%, and weighted average shares outstanding between 62.2 million and 62.2 million.
Currently, Maximus carries a Zacks Rank #3 (Hold).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Recent Earnings Snapshots of Some Service Providers
Robert Half (RHI - Free Report) reported better-than-expected fourth-quarter 2023 results.
Quarterly earnings of 83 cents per share beat the consensus mark by 1.2% but declined 39.4% year over year. RHI’s revenues of $1.5 billion beat the consensus mark by a slight margin but decreased 14.7% year over year.
Aptiv (APTV - Free Report) reported mixed fourth-quarter 2023 results, with earnings beating the Zacks Consensus Estimate but revenues missing the same.
Adjusted earnings of $1.4 per share beat the Zacks Consensus Estimate by 8.5% and increased 10.2% year over year. APTV’s revenues of $4.9 billion missed the Zacks Consensus Estimate by 0.5% but increased 6% year over year.
S&P Global (SPGI - Free Report) reported mixed fourth-quarter results, wherein earnings missed the Zacks Consensus Estimate but revenues beat the same.
Adjusted EPS of $3.13 missed the Zacks Consensus Estimate by 0.6% but increased 23.2% year over year. Revenues of $3.2 billion surpassed the consensus estimate by 0.5% and improved 7.3% year over year.