Company Overview
Maximus, Inc. functions as a global provider of government services, delivering business process solutions, eligibility and enrollment assistance, outreach programs, and other specialized services through three distinct operational segments: U.S. Federal Services, U.S. Services, and Outside the U.S. This organization operates within the Industrials sector, specifically categorized under the Specialty Business Services industry, where it competes by supplying essential administrative and operational support to government entities. The company demonstrates significant scale with a market capitalization of $3.55 billion, an annual revenue of $5.37 billion, and a workforce comprising 37,200 employees. These valuation and revenue figures indicate that Maximus, Inc. holds a substantial position within the specialty services landscape, managing a complex network of operations to serve a vast client base across domestic and international jurisdictions.
Financial Health
The company reported a revenue of $5.37 billion over the trailing twelve months, generating net income of $371.78 million and an EBITDA of $700.93 million. The substantial gap between the total revenue of $5.37 billion and the net income of $371.78 million reveals a cost structure where operating expenses and taxes consume approximately 93.1% of top-line revenue before arriving at the bottom line. Maximus, Inc. generated free cash flow of $159.17 million, which provides the company with a specific level of financial flexibility to manage capital expenditures or service debt obligations, though the absolute amount is modest relative to total earnings. The gross margin stands at 25.1%, indicating the percentage of revenue remaining after direct costs are covered, while the operating margin of 10.9% reflects efficiency in managing overhead and administrative costs. The profit margin is recorded at 6.9%, showing the final portion of revenue retained as profit after all expenses, including interest and taxes, are deducted. Regarding liquidity and leverage, the company holds cash of $137.59 million against total debt of $1.67 billion, resulting in a debt-to-equity ratio of 97.20, which suggests a balance sheet that is highly leveraged relative to its equity base. However, the current ratio of 2.34 indicates that the company possesses 2.34 times the current assets necessary to cover its short-term liabilities, signaling adequate short-term liquidity despite the high leverage. Return on equity is 22.1%, while return on assets is 8.9%, metrics that reveal how effectively management utilizes shareholder equity and total assets to generate net income, with the equity return being significantly higher due to the leveraged capital structure.
Valuation Assessment
The trailing twelve-month P/E ratio is 9.98, while the forward P/E is 7.14, and the difference between these two figures implies that the market expects earnings to grow significantly in the coming year relative to current levels. The price-to-book ratio is 2.06, indicating that the market values the company at more than double its book value, which suggests investors are pricing in growth potential or intangible assets beyond the recorded net asset value. Alternative valuation metrics include a price-to-sales ratio of 0.66 and an EV/EBITDA of 7.25, which suggest the company is valued at a discount relative to its sales and earnings before interest, taxes, depreciation, and amortization compared to many high-growth peers. The 52-week high is $100.00 and the 52-week low is $64.66, meaning the current trading price sits within this established range, specifically trading below the recent peak but above the yearly minimum. The beta value is 0.56, which indicates that the stock's price volatility is roughly half that of the broader market, suggesting the stock moves less aggressively than the overall market index during periods of fluctuation.
Growth & Income
Revenue growth year-over-year is -4.1%, while earnings growth year-over-year is 146.5%, indicating that earnings are growing at a much faster pace than revenue and implying that the company is benefiting from operational efficiencies or margin expansion despite a decline in top-line sales. As a dividend payer, the company offers a dividend yield of 2.0% and maintains a payout ratio of 18.4%, which is a very low percentage of earnings and suggests that the dividend is highly sustainable given the company's strong earnings growth. The low payout ratio also indicates that the majority of earnings are retained within the business to fund operations and growth initiatives rather than being distributed immediately to shareholders. The overall growth and income profile presents a scenario of declining revenue accompanied by explosive earnings growth and a conservative, highly sustainable dividend policy supported by a low payout ratio.