0R15 9025.0 0.0% 0R1E 9410.0 0.0% 0M69 None None% 0R2V 247.99 9682.643% 0QYR 1567.5 0.0% 0QYP 439.3701 -2.9016% 0RUK None None% 0RYA 1597.0 1.2682% 0RIH 195.55 0.0% 0RIH 191.4 -2.1222% 0R1O 225.5 9683.0803% 0R1O None None% 0QFP 10475.8496 107.8542% 0M2Z 252.573 0.2373% 0VSO 33.0 -7.3164% 0R1I None None% 0QZI 622.0 0.0% 0QZ0 220.0 0.0% 0NZF None None% 0YXG 222.05 -4.1318%
Company Overview: Maximus, Inc. (NYSE: MMS) specializes in business process services (BPS) for the health and human service industries. Its operating segments are 1) US Services Segment, which offers a variety of BPS, such as program administration, appeals and assessments, and related consultancy work to US state and local government programs, 2) US Federal Services Segment, which provides BPS solutions for a wide range of US federal civilian activities, including system and software development and maintenance and 3) Outside the US Segment, includes health and disability assessments, programme administration for employment assistance, and other job seeker-related services to governments and commercial customers in countries other than the US.
MMS Details
Key Takeaways from FY21 (ended September 30, 2021)
Revenues & Operating Profit Key Highlights; Analysis by Kalkine Group
Recent Developments
Segment Wise Results FY21
Balance Sheet & Liquidity Position
Key Metrics: In FY21, MMS's operating and net margins were 9.6% and 6.8%, higher than the previous annual of 8.3% and 6.2%, respectively. ROE stood at 21.4%, 1,560 bps more than the industry median. Debt/Equity was 1.02x as of September 30, 2021, significantly higher than 0.02x on September 30, 2020.
Profitability and Leverage Profile; Analysis by Kalkine Group
Top 10 Shareholders: The top 10 shareholders together form around 50.23% of the total shareholding, while the top 4 constitute the maximum holding. The Vanguard Group, Inc., and BlackRock Institutional Trust Company, N.A. hold the maximum stake in the company at 11.16% and 10.21%, respectively, as also highlighted in the chart below:
Top 10 Shareholders; Analysis by Kalkine Group
Risk Analysis
Outlook
Valuation Methodology: EV/Sales Based Relative Valuation (Illustrative)
Source: Analysis by Kalkine Group
*% Premium/(Discount) is based on our assessment of the company's FY1 trading multiple after considering its key growth drivers, economic moat, stock's historical trading multiples versus peer average/median, and investment risks.
Stock Recommendation: MMS's share price has corrected 18.70% over the past nine months. The stock is currently leaning towards the lower band of its 52-week range of USD 74.38 to USD 96.05. We have valued the stock using the EV/Sales multiple-based illustrative relative valuation method and arrived at a target price with an upside of high teens (in percentage terms). We believe that the company can trade at a premium compared to its peer's average, considering its strong cash flows, robust profitability margins and recent commercial contracts. We have taken peers like Concentrix Corporation (NASDAQ: CNXC) and International Money Express Inc. (NASDAQ: IMXI). Considering the strong top-line performance, robust profitability margins, growth across segments, associated risks, and current valuation, we give a "Buy" recommendation on the stock at the closing price of USD 77.15, up 0.55% as of January 14, 2022.
MMS Technical Chart, Data Source: REFINITIV
Note 1: The reference data in this report has been partly sourced from REFINITIV.
Note 2: Investment decision should be made depending on the investors' appetite for upside potential, risks, holding duration, and any previous holdings. Investors can consider exiting from the stock if the Target Price mentioned as per the valuation has been achieved and subject to the factors discussed above.
Technical Indicators Defined
Support: A level where-in the stock prices tend to find support if they are falling, and downtrend may take a pause backed by demand or buying interest.
Resistance: A level where-in the stock prices tend to find resistance when they are rising, and the uptrend may take a pause due to profit booking or selling interest.
Stop-loss: It is a level to protect further losses in case of unfavourable movement in the stock prices.
Disclaimer
References to ‘Kalkine’, ‘we’, ‘our’ and ‘us’ refer to Kalkine Limited.
This website is a service of Kalkine Limited. Kalkine Limited is a private limited company, incorporated in England and Wales with registration number 07903332. Kalkine Limited is authorised and regulated by the Financial Conduct Authority under reference number 579414.
The article has been prepared for informational purposes only and is not intended to be used as a complete source of information on any particular company. No advice or information, whether oral or written, obtained by you from Kalkine or through or from the service shall create any warranty not expressly stated. Kalkine does not intend to exclude any liability which it is not permitted to exclude under applicable law or regulation.
Kalkine does not offer financial advice based upon your personal financial situation or goals, and we shall NOT be held liable for any investment or trading losses you may incur by using the opinions expressed in our publications, market updates, news alerts and corporate profiles. Kalkine does not intend to exclude any liability which it is not permitted to exclude under applicable law or regulation. Kalkine’s non-personalised advice does not in any way endorse or recommend individuals, investment products or services for your personal financial situation. You should discuss your portfolios and the risk tolerance level appropriate for your personal financial situation, with a professional authorised financial planner and adviser. You should be aware that the value of any investment and the income from it can go down as well as up and you may not get back the amount invested.
Kalkine Media Limited, an affiliate of Kalkine Limited, may have received, or be entitled to receive, financial consideration in connection with providing information about certain entity(s) covered on its website.