Maximus, Inc. MMS benefits from acquisitions that help it expand its business processes, knowledge and customer relationships. Strategic acquisitions allow the company to expand its technical capabilities and competencies and to advance its long-term organic growth strategy.
Let’s dive into the factors that make MMS a stock worth investing in.
value for money
MMS has outperformed the Zacks Government Services industry in the last six months. The stock is up 27.2% compared to industry growth of 2.5% over the same period.
Maximus, Inc. Price
Maximus, Inc. Price | Quote from Maximus, Inc
profit expectations
Earnings growth and stock price gains often indicate a company’s prospects. For 2023, the Zacks consensus earnings estimate is set at $4.15. This has been revised upwards by 7.2% over the past 60 days. The favorable estimate revision reflects brokers’ confidence in the stock.
result history
The company has an impressive earnings surprise record, beating the Zacks Consensus estimate in three of the last four quarters and missing on one occasion. Maximus has an average surprise of 11.3%.
Bullish Industry Rank
The industry Maximus belongs to currently has a Zacks Industry Rank of 2 (out of 249 groups). Such a solid rank places the industry in the top 2% of Zacks industries. Studies show that 50% of a stock price movement is directly linked to the performance of the industry group from which it originated.
A mediocre stock in a healthy group is likely to outperform a resilient stock in a weak industry. Therefore, it is necessary to consider the performance of the industry.
Other positives
Maximus has focused on completing strategic acquisitions, fueling its organic growth. The company plans to reduce the debt on its balance sheet through appropriate use of free cash flow. It has focused on using advanced technology to improve modernization. MMS also benefited from continued demand in the clinical services business.
Backlog of orders, healthy pipelines and strength in execution of core business act as a tailwind for the company’s growth. The company is expected to take advantage of the increased visibility in redefining Medicaid.
The company has a consistent dividend payment history. Such moves demonstrate Maximus’ commitment to creating value for shareholders and underscore its confidence in its business.
The rising current ratio demonstrates the company’s strength in effortlessly repaying short-term obligations. MMS has an increasing power ratio, which puts it in an excellent position in terms of meeting short-term commitments.
Maximus is currently Zacks Rank #2 (Buy)
Other stocks to consider
Investors interested in the broader Zacks Business Services sector may consider the following stocks:
ICF International, Inc. The ICFI is supported by the strong government business thanks to the improvement in business development pipeline and win rate. In the fourth quarter of 2022, ICFI reported better than expected results. Quarterly earnings (excluding $1.09 from non-recurring items) were $1.56, beating the Zacks consensus estimate by 4.7% and up 31.1% from the figure reported a year earlier. For the first quarter of 2023, ICFI’s earnings are expected to post 6.1% year-on-year growth. For 2023, the company’s earnings are expected to grow 6.4% year over year.
Zacks’ consensus estimate for the company’s first-quarter 2023 earnings is $1.39, which has been revised up 4.5% over the past 60 days. The consensus estimate for the full year is $6.14 per share. This has been revised upwards by 4.6% over the last 60 days. The company currently has a Zacks Rank of 1 (Strong Buy). You can see the full list of today’s Zacks #1 Rank stocks can be found here.
Omnicom Group Inc.’s OMC internal development initiatives and shareholder-friendly policies ensure long-term profitability. In the fourth quarter of 2022, OMC reported better than expected results. Earnings of $2.09 per share beat Zacks’ consensus estimate by 7.7% and are up 7.2% year over year on strong margin performance. For the first quarter of 2023, OMC earnings are expected to match the $1.39 reported last year. The company’s earnings are expected to grow 3.2% year over year in 2023.
The Zacks Consensus estimate for the company’s first-quarter 2023 earnings is $1.39, down 2.1% over the past 60 days. The consensus estimate for the full year is $7.15 per share. This has been revised upwards by 13.7% over the last 60 days. The company currently has a Zacks rank of 1.
Gartner, Inc. IT, with a Zacks rank of #2, reported better-than-expected fourth-quarter 2022 results, with both earnings and revenue beating the Zacks consensus estimate. Adjusted earnings (excluding 49 cents from non-recurring items) per share of $3.70 beat Zacks’ consensus estimate by 44% and were up 23.8% year over year. For the first quarter of 2023, IT earnings are expected to be 12.5% down year-on-year. The company’s earnings are expected to fall 15.8% year over year in 2023.
The Zacks Consensus estimate for the company’s first-quarter 2023 earnings is $2.04, which has been revised up 3.6% over the last 60 days. The consensus estimate for the full year is $9.49 per share. This has been revised down slightly in the last 60 days.
Want the latest recommendations from Zacks Investment Research? Today you can download the 7 best stocks for the next 30 days. Click here to get this free report
Omnicom Group Inc. (OMC): Free Stock Research Report
Gartner, Inc. (IT): Free stock research report
ICF International, Inc. (ICFI): Free Stock Research Report
Maximus, Inc. (MMS): Free Stock Research Report
To read this article on Zacks.com, click here.
Zacks Investment Research
