Earnings Update: Maximus, Inc. (NYSE:MMS) Just Reported Its First-Quarter Results And Analysts Are Updating Their Forecasts
A week ago, Maximus, Inc. (NYSE:MMS) came out with a strong set of first-quarter numbers that could potentially lead to a re-rate of the stock. The company beat expectations with revenues of US$1.3b arriving 3.1% ahead of forecasts. Statutory earnings per share (EPS) were US$1.04, 3.0% ahead of estimates. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.
View our latest analysis for Maximus
After the latest results, the three analysts covering Maximus are now predicting revenues of US$5.16b in 2024. If met, this would reflect an okay 3.6% improvement in revenue compared to the last 12 months. Per-share earnings are expected to leap 41% to US$4.29. In the lead-up to this report, the analysts had been modelling revenues of US$5.14b and earnings per share (EPS) of US$4.24 in 2024. So it's pretty clear that, although the analysts have updated their estimates, there's been no major change in expectations for the business following the latest results.
It will come as no surprise then, to learn that the consensus price target is largely unchanged at US$103. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. Currently, the most bullish analyst values Maximus at US$105 per share, while the most bearish prices it at US$100.00. This is a very narrow spread of estimates, implying either that Maximus is an easy company to value, or - more likely - the analysts are relying heavily on some key assumptions.
Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. We would highlight that Maximus' revenue growth is expected to slow, with the forecast 4.8% annualised growth rate until the end of 2024 being well below the historical 14% p.a. growth over the last five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 6.3% per year. Factoring in the forecast slowdown in growth, it seems obvious that Maximus is also expected to grow slower than other industry participants.
The Bottom Line
The most important thing to take away is that there's been no major change in sentiment, with the analysts reconfirming that the business is performing in line with their previous earnings per share estimates. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting that it's tracking in line with expectations. Although our data does suggest that Maximus' revenue is expected to perform worse than the wider industry. The consensus price target held steady at US$103, with the latest estimates not enough to have an impact on their price targets.
Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. We have estimates - from multiple Maximus analysts - going out to 2025, and you can see them free on our platform here.
Don't forget that there may still be risks. For instance, we've identified 2 warning signs for Maximus that you should be aware of.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
