MAXIMUS, Inc (NYSE: MMS) is rated at BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures, good cash flow from operations and solid stock price performance. We feel these strengths outweigh the fact that the company has had sub-par growth in net income.
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Highlights from the ratings report include:
- MAXIMUS INC's earnings per share declined by 6.8% in the most recent quarter compared to the same quarter a year ago. The company has suffered a declining pattern of earnings per share over the past year. However, we anticipate this trend reversing over the coming year. During the past fiscal year, MAXIMUS INC reported lower earnings of $2.19 versus $2.32 in the prior year. This year, the market expects an improvement in earnings ($2.99 versus $2.19).
- Compared to its closing price of one year ago, MMS's share price has jumped by 50.63%, exceeding the performance of the broader market during that same time frame. Looking ahead, the stock's sharp rise over the last year has already helped drive it to a level which is relatively expensive compared to the rest of its industry. We feel, however, that other strengths this company displays justify these higher price levels.
- Net operating cash flow has slightly increased to $30.10 million or 9.60% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of -5.61%.
- MMS's debt-to-equity ratio is very low at 0.00 and is currently below that of the industry average, implying that there has been very successful management of debt levels. To add to this, MMS has a quick ratio of 1.93, which demonstrates the ability of the company to cover short-term liquidity needs.
MAXIMUS, Inc. provides business process services to government health and human services agencies in the United States, Australia, Canada, Saudi Arabia, and the United Kingdom.You can view the full MAXIMUS INC's Ratings Report or get investment ideas from our investment research center.