Maximus, Inc. (MMS) stock analysis

P/E below its 5-year median

Maximus's P/E of 9.7 is below its own 5-year median of 16.8.

P/E below the industry

Maximus's P/E of 9.7 is below the Miscellaneous Business Services median of 25.8.

EV/EBITDA below its 5-year median

Maximus's EV/EBITDA of 7.9 is below its 5-year median of 14.6.

P/B below the industry

Maximus's price-to-book of 1.97 is below the Miscellaneous Business Services median of 2.48.

Trading below fair value

The share price of $65.38 is below our fair value estimate of $133.48.

Margin of safety over 20%

The price is 51.0% below fair value, more than the 20% cushion we look for.

Revenue growing under 10% a year

Revenue grew 5.5% a year over the last three fiscal years, short of the 10% we look for.

EPS growing 10%+ a year

Diluted EPS grew 18.8% a year over the last three fiscal years.

Earnings growth accelerating

Net income grew 17.3% over the last twelve months, against a 5-year average of 8.3% a year.

Growing slower than the industry

Revenue grew -3.3% over the last twelve months; the Miscellaneous Business Services median is 9.9%.

Guidance raised

Maximus raised its fiscal year 2026 Interest expense outlook on Aug 6, 2026.

Gross margin improving

Gross margin was 25.6% over the last twelve months, against 24.0% a year earlier.

Return on equity over 15%

Return on equity was 21.1% over the last twelve months and averaged 16.5% over five years.

Return on capital over 10%

Return on invested capital was 13.2%, above the 10% that usually covers the cost of capital.

Return on equity above the industry

Maximus's return on equity of 21.1% is above the Miscellaneous Business Services median of 6.8%.

Earnings grew over 5 years

Net income grew 8.3% a year on average over the last five fiscal years.

Net margin above its 5-year average

Net margin was 7.1% over the last twelve months, against a 5-year average of 5.2%.

Net margin above the industry

Maximus's net margin of 7.1% is above the Miscellaneous Business Services median of 3.8%.

High debt

Debt is 94.0% of shareholders' equity, above the 40% we consider low.

Debt rising against equity

Debt to equity rose from 2.3% five years ago to 94.0%.

Debt covered by cash flow

Operating cash flow over the last twelve months equals 28.7% of total debt.

Interest well covered

Operating income covers interest expense 6.5 times.

Short-term assets cover short-term debts

Current assets are 2.42 times current liabilities.

Low bankruptcy risk

The Altman Z-score is 3.04; above 3 is the safe zone and below 1.8 the distress zone.

Pays a dividend

Maximus paid dividends worth 2.0% of the share price over the last twelve months.

Yield below Treasuries

The 2.0% yield is below the 4.4% on a 1-year Treasury.

Yield below the top quarter

The top quarter of US dividend payers yield 3.8% or more; Maximus yields 2.0%.

Dividend not cut

The dividend per share has not fallen by more than 10% in any of the last 10 fiscal years.

Earnings cover

Needs dividends paid and net income.

Cash-flow cover

Needs dividends paid and free cash flow.