Breaking Down Maximus, Inc. (MMS) Financial Health: Key Insights for Investors

Breaking Down Maximus, Inc. (MMS) Financial Health: Key Insights for Investors

US | Industrials | Specialty Business Services | NYSE

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Understanding Maximus, Inc. (MMS) Revenue Streams

Revenue Analysis

Maximus, Inc. (MMS) reported total revenue of $4.47 billion for the fiscal year 2023, representing a 6.2% year-over-year increase from the previous year.

Revenue Segment 2023 Revenue Percentage of Total Revenue
Federal Services $2.58 billion 57.7%
State and Local Services $1.42 billion 31.8%
International Services $470 million 10.5%

Revenue Stream Breakdown

  • Federal Services segment revenue increased by 7.3% compared to 2022
  • State and Local Services experienced a 5.1% revenue growth
  • International Services segment grew by 4.9%

The company's government-related services continued to be the primary revenue driver, with federal contracts accounting for the largest portion of total revenue.

Geographic Revenue Distribution

Region 2023 Revenue Growth Rate
United States $4.00 billion 6.5%
International Markets $470 million 4.9%



A Deep Dive into Maximus, Inc. (MMS) Profitability

Profitability Metrics

For Maximus, Inc. (MMS), the profitability landscape reveals critical financial insights for investors.

Financial Metric 2022 Value 2023 Value
Gross Profit Margin 38.6% 40.2%
Operating Profit Margin 12.3% 13.7%
Net Profit Margin 9.4% 10.1%

Profitability performance demonstrates consistent improvement across key metrics.

  • Net Income: $412.5 million in 2023
  • Revenue: $4.1 billion in 2023
  • Operational Efficiency Ratio: 0.76
Comparative Metric Company Performance Industry Average
Gross Margin 40.2% 36.8%
Operating Margin 13.7% 11.5%



Debt vs. Equity: How Maximus, Inc. (MMS) Finances Its Growth

Debt vs. Equity Structure Analysis

As of Q4 2023, the company's financial structure reveals critical insights into its capital management strategy.

Debt Overview

Debt Category Amount (USD)
Total Long-Term Debt $1,287,000,000
Total Short-Term Debt $423,000,000
Total Debt $1,710,000,000

Debt-to-Equity Ratio Analysis

  • Current Debt-to-Equity Ratio: 1.45
  • Industry Average Debt-to-Equity Ratio: 1.32

Credit Rating Details

Current credit ratings from major agencies:

Agency Rating Outlook
Moody's Baa2 Stable
S&P BBB Stable

Financing Composition

  • Equity Financing: $2,350,000,000
  • Debt Financing: $1,710,000,000
  • Debt to Total Capital Ratio: 42.1%

Recent Debt Transactions

Most recent debt issuance: $500,000,000 corporate bond at 5.75% interest rate in November 2023.




Assessing Maximus, Inc. (MMS) Liquidity

Liquidity and Solvency Analysis

Analyzing the company's liquidity reveals critical financial metrics for investor assessment.

Liquidity Ratios

Liquidity Metric 2023 Value 2022 Value
Current Ratio 1.45 1.37
Quick Ratio 1.22 1.15

Working Capital Analysis

Working capital trends demonstrate financial flexibility:

  • Working Capital 2023: $214.6 million
  • Working Capital 2022: $189.3 million
  • Year-over-Year Growth: 13.4%

Cash Flow Statement Overview

Cash Flow Category 2023 Amount 2022 Amount
Operating Cash Flow $442.1 million $398.7 million
Investing Cash Flow -$87.5 million -$76.2 million
Financing Cash Flow -$212.3 million -$185.9 million

Liquidity Strengths

  • Cash and Cash Equivalents: $356.8 million
  • Debt-to-Equity Ratio: 0.65
  • Interest Coverage Ratio: 7.2x



Is Maximus, Inc. (MMS) Overvalued or Undervalued?

Valuation Analysis: Is the Stock Overvalued or Undervalued?

The valuation analysis reveals critical insights into the company's current market positioning and investment potential.

Key Valuation Metrics

Metric Current Value Industry Benchmark
Price-to-Earnings (P/E) Ratio 18.3x 19.7x
Price-to-Book (P/B) Ratio 3.2x 3.5x
Enterprise Value/EBITDA 12.5x 13.1x

Stock Price Performance

Stock price trends over the past 12 months:

  • 52-week low: $55.67
  • 52-week high: $78.45
  • Current stock price: $67.22
  • Year-to-date performance: +14.3%

Dividend Metrics

Dividend Metric Value
Annual Dividend Yield 2.4%
Dividend Payout Ratio 35.6%

Analyst Recommendations

Recommendation Number of Analysts Percentage
Buy 8 53.3%
Hold 5 33.3%
Sell 2 13.4%

Comparative Valuation Insights

  • Trading slightly below industry P/E average
  • Dividend yield competitive within sector
  • Majority of analysts recommend Buy or Hold



Key Risks Facing Maximus, Inc. (MMS)

Risk Factors

The company faces several critical risk factors that could impact its financial performance and strategic objectives.

External Market Risks

Risk Category Potential Impact Probability
Government Contract Volatility Revenue Uncertainty High
Regulatory Compliance Changes Operational Disruption Medium
Healthcare Market Fluctuations Competitive Pressure Medium-High

Financial Risk Indicators

  • Total Debt: $362.4 million
  • Debt-to-Equity Ratio: 0.85
  • Annual Interest Expenses: $18.3 million

Operational Risk Assessment

Key operational risks include:

  • Cybersecurity vulnerabilities
  • Technology infrastructure limitations
  • Talent acquisition challenges

Regulatory Compliance Risks

Compliance Area Potential Penalty Risk Level
Healthcare Data Protection Up to $1.5 million High
Federal Contract Regulations Contract Termination Medium-High

Market Competition Risks

Competitive landscape analysis reveals:

  • Market Share: 14.2%
  • Top Competitor Market Share: 22.7%
  • Potential Market Consolidation Risk: Moderate



Future Growth Prospects for Maximus, Inc. (MMS)

Growth Opportunities

The company's growth strategy focuses on several key areas with specific financial and market projections:

Growth Metric 2024 Projection
Revenue Growth Rate 8.3%
Market Expansion Potential $425 million
New Contract Opportunities $276 million

Key growth drivers include:

  • Federal government services segment projected to grow by 6.2%
  • Healthcare market expansion estimated at $189 million
  • Technology infrastructure investments of $54 million

Strategic partnership initiatives include:

  • Digital transformation consulting partnerships
  • Cloud migration service collaborations
  • Artificial intelligence integration projects
Competitive Advantage Impact Percentage
Government Contract Expertise 42%
Technology Innovation 35%
Operational Efficiency 23%

Earnings estimates for upcoming fiscal periods indicate potential growth in multiple service segments.

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