It has been about a month since the last earnings report for Maximus (MMS Quick QuoteMMS - Free Report) . Shares have lost about 3.7% in that time frame, underperforming the S&P 500.

Will the recent negative trend continue leading up to its next earnings release, or is Maximus due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.

Maximus Misses Q4 Earnings Estimates

Maximus reported mixed fourth-quarter fiscal 2024 results. Earnings marginally missed the Zacks Consensus Estimate, but revenues beat the Zacks Consensus Estimate.

Quarterly adjusted earnings of $1.46 per share marginally lagged the Zacks Consensus Estimate but increased 13.2% on a year-over-year basis. Revenues of $1.32 billion beat the consensus mark by 1.8% and rose 4.4% from the year-ago quarter.

Segmental Revenues of Maximus

The U.S. Federal Services segment’s revenues of $675 million rose 9.4% from the year-ago reported number and beat our estimate of $642.8 million. The Outside the U.S. segment’s revenues of $177.2 million increased 5% from fourth-quarter fiscal 2023 and outpaced our anticipated $154.4 million. The U.S. Services segment’s revenues of $463.6 million decreased 2.2% year over year and missed our estimate of $487.1 million.

MMS's Sales & Pipeline

Year-to-date signed contract awards, as of Sept. 30, 2024, totaled $2.2 billion. Contracts pending (awarded but unsigned) amounted to $312 million. The sales pipeline, as of Sept. 30, was $54.3 billion. This included $4.22 billion in pending proposals, $7.12 billion in proposals in preparation and $42.9 billion in opportunities tracking.

The book-to-bill ratio, as of Sept. 30, 2023, was 0.4 on a trailing 12-month basis.

MMS's Operating Performance

Adjusted operating income of $134.79 million increased 7% year over year. This compares with our expected adjusted operating income of $139.6 million, down 3.5% year over year. The adjusted operating income margin of 10.2% increased 20 basis points year over year.

Maximus' Balance Sheet & Cash Flow

Maximus ended the quarter with a cash and cash equivalent balance of $183.12 million compared with $102.79 million reported at the end of the prior quarter.

The company used $163.83 million in cash from operations. Capital expenditures were $31.95 million, and free cash flow amounted to $131.8 million.

MMS's Fiscal 2025 Guidance

Total revenues are expected between $5.28 billion and $5.43 billion. Adjusted earnings are anticipated in the range of $5.70-$6.00 per share. Free cash flow is expected between $345 million and $375 million for fiscal year 2025.

The company forecasts expenses of $92 million for amortization of intangible assets, $45 million for depreciation and amortization, interest expenses of approximately $65 million, an effective income tax rate within 25% and weighted average shares outstanding within 61 million for fiscal 2025.

An adjusted EBITDA margin, which excludes divestiture-related charges, of approximately 11% is anticipated for the full year.

How Have Estimates Been Moving Since Then?

It turns out, fresh estimates flatlined during the past month.

VGM Scores

Currently, Maximus has a great Growth Score of A, though it is lagging a lot on the Momentum Score front with a C. However, the stock was allocated a grade of A on the value side, putting it in the top 20% for this investment strategy.

Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Maximus has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.