Maximus Stock Rises 5.6% Despite Q4 Earnings Missing Estimates

Maximus, Inc. MMS reported unimpressive fourth-quarter fiscal 2025 results, wherein both earnings and revenues missed the Zacks Consensus Estimate.

Despite the lower-than-expected results, the stock rallied 5.6% following the earnings release on Nov. 20.

Maximus, Inc. Price, Consensus and EPS Surprise

Maximus, Inc. price-consensus-eps-surprise-chart | Maximus, Inc. Quote

Quarterly adjusted earnings of $1.62 per share missed the Zacks Consensus Estimate by 0.6% but increased 11% year over year. Revenues of $1.32 billion missed the consensus mark by 1.5% but rose 0.19% from the year-ago quarter.

Segmental Revenues of Maximus

The U.S. Federal Services segment’s revenues of $747.9 million rose 10.8% from the year-ago reported number and beat our estimate of $737.9 million. Meanwhile, the Outside the U.S. segment’s revenues of $141.2 million decreased 20.3% year over year and beat our anticipation of $110.7 million. The U.S. Services segment’s revenues of $429.3 million fell 7.4% year over year and lagged our estimate of $474.2 million.

MMS’ Sales and Pipeline

Year-to-date signed contract awards, as of Sept. 30, 2025, totaled $4.7 billion. Contracts pending (awarded but unsigned) amounted to $331 million. The sales pipeline, as of Sept. 30, was $51.3 billion. This included $3.37 billion in pending proposals, $1.37 billion in proposals in preparation and $46.6 billion in opportunities tracking. The book-to-bill ratio was 0.9 on a trailing 12-month basis.

MMS’ Operating Performance

Operating income of $122.86 million increased 9.9% year over year. This compares with our expected adjusted operating income of $148.4 million, down 10.1% year over year. The adjusted operating income margin of 9.32% increased 82 basis points year over year.

Maximus’ Balance Sheet and Cash Flow

Maximus ended the quarter with a cash and cash equivalent balance of $222 million compared with $59.8 million reported at the end of the prior quarter.

The company generated $429 million in cash from operations. Free cash flow was $366 million.

MMS Updates Fiscal 2026 Guidance

For fiscal 2026, MMS expects the total revenues to be between $5.225 billion and $5.425 billion. The Zacks Consensus Estimate is pegged at $5.61 billion.

Adjusted earnings are anticipated in the range of $7.95-$8.25 per share. The updated guided range is higher than the current Zacks Consensus Estimate of $7.34.

The company expects an adjusted EBITDA margin of approximately 13.6-13.7%.

Free cash flow expectation is between $450 million and $500 million. The company forecasts interest expenses of approximately $69 million. The effective income tax rate is anticipated to be within 25%. On a full-year basis, the weighted average shares outstanding are forecasted to be approximately 55.5 million.

Currently, Maximus carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Earnings Snapshot

Omnicom Group Inc. OMC reported impressive third-quarter 2025 results, wherein earnings and revenues beat the Zacks Consensus Estimate.

Earnings of $2.15 per share beat the consensus estimate by 4.2% and increased 10.3% year over year. Total revenues of $4.04 billion surpassed the consensus estimate by 0.4% and rose 4% year over year. The increase in the top line was led by a 2.6% jump in revenues from organic growth.

ManpowerGroup, Inc. MAN posted impressive third-quarter 2025 results, wherein earnings and revenues beat the Zacks Consensus Estimate.

Quarterly adjusted earnings per share came in at 83 cents, which beat the Zacks Consensus Estimate by 1.2% but decreased 35.7% year over year. Total revenues of $4.63 billion surpassed the consensus estimate by 0.6% and rose 2.3% year over year.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

This article originally published on Zacks Investment Research (zacks.com).

Zacks Investment Research