NEW YORK (TheStreet) -- Maximus (MMS) stock is trading lower Monday after Raymond James downgraded the company to "market perform" from "outperform." The firm said the revision was due to an expected slowdown in earnings growth over 2015.
By late morning, shares had dropped 6.2% to $43.22.
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TheStreet Ratings team rates MAXIMUS INC as a Buy with a ratings score of A. TheStreet Ratings Team has this to say about their recommendation:
"We rate MAXIMUS INC (MMS) a 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 robust revenue growth, largely solid financial position with reasonable debt levels by most measures, impressive record of earnings per share growth, compelling growth in net income and reasonable valuation levels. We feel these strengths outweigh the fact that the company shows low profit margins."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The revenue growth greatly exceeded the industry average of 16.4%. Since the same quarter one year prior, revenues rose by 41.5%. Growth in the company's revenue appears to have helped boost the earnings per share.
- 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 1.85, which demonstrates the ability of the company to cover short-term liquidity needs.
- MAXIMUS INC has improved earnings per share by 29.7% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, MAXIMUS INC increased its bottom line by earning $1.68 versus $1.10 in the prior year. This year, the market expects an improvement in earnings ($2.05 versus $1.68).
- The net income growth from the same quarter one year ago has significantly exceeded that of the IT Services industry average, but is less than that of the S&P 500. The net income increased by 30.0% when compared to the same quarter one year prior, rising from $31.69 million to $41.21 million.
- You can view the full analysis from the report here: MMS Ratings Report