MAXIMUS, Inc. (NYSE:MMS) shares fell 2.9% to US$74.73 in the week since its latest yearly results. MAXIMUS reported in line with analyst predictions, delivering revenues of US$2.9b and earnings per share of US$3.72, suggesting the business is executing well and in line with its plan. This is an important time for investors, as they can track a company's performance in its report, look at what top analysts are forecasting for next year, and see if there has been any change to expectations for the business. So we collected the latest post-earnings consensus estimates to see what could be in store for next year.
Taking into account the latest results, the most recent consensus for MAXIMUS from seven analysts is for revenues of US$3.22b in 2020, which is a solid 11% increase on its sales over the past 12 months. Earnings per share are expected to rise 7.8% to US$4.03. Before this earnings report, analysts had been forecasting revenues of US$3.17b and earnings per share (EPS) of US$4.07 in 2020. So it's pretty clear that, although analysts have updated their estimates, there's been no major change in expectations for the business following the latest results.
There were no changes to revenue or earnings estimates or the price target of US$80.17, suggesting that the company has met expectations in its recent result. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. There are some variant perceptions on MAXIMUS, with the most bullish analyst valuing it at US$83.00 and the most bearish at US$76.00 per share. Still, with such a tight range of estimates, it suggests analysts have a pretty good idea of what they think the company is worth.
In addition, we can look to MAXIMUS's past performance and see whether business is expected to improve, and if the company is expected to perform better than wider market. It's clear from the latest estimates that MAXIMUS's rate of growth is expected to accelerate meaningfully, with forecast 11% revenue growth noticeably faster than its historical growth of 7.5%p.a. over the past five years. Other similar companies in the industry (with analyst coverage) are also forecast to grow their revenue at 11% per year. Factoring in the forecast acceleration in revenue, it's pretty clear that MAXIMUS is expected to grow at about the same rate as the wider market.
The Bottom Line
The most important thing to take away is that there's been no major change in sentiment, with analysts reconfirming that earnings per share are expected to continue performing in line with their prior expectations. Happily, there were no real changes to sales forecasts, with the business still expected to grow in line with the overall market. The consensus price target held steady at US$80.17, with the latest estimates not enough to have an impact on analysts' estimated valuations.
With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have forecasts for MAXIMUS going out to 2022, and you can see them free on our platform here.
Another thing to consider is whether management and directors have been buying or selling stock recently. We provide an overview of all open market stock trades for the last twelve months on our platform, here.
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