Assessing Maximus (MMS) Valuation Following Strong FY25 Results and New Federal Contract Wins

Maximus (MMS) just closed out fiscal 2025 with revenue and profits above expectations, largely thanks to momentum in its U.S. Federal Services segment and notable new contract wins, including a large Air Force deal.

The company also rolled out its 2026 guidance, highlighting a plan to expand margins using technology upgrades, further share buybacks, and continued investment in artificial intelligence and federal government partnerships. Investors now have clearer insight into how Maximus aims to build on recent wins and drive future growth.

See our latest analysis for Maximus.

Maximus’s results and renewed buyback momentum have sparked investor interest, especially after the stock’s recent 9.7% gain over the past week. With a total shareholder return of 20.7% over the last year, momentum is building behind the company’s shift toward tech-driven growth and steady capital returns.

If Maximus’s combination of tech investments and government partnerships caught your attention, now could be the perfect time to discover fast growing stocks with high insider ownership

But with Maximus trading at a notable discount to analysts’ price targets, the question for investors is whether the stock remains undervalued or if the market has already accounted for its future growth trajectory.

Most Popular Narrative: 21.2% Undervalued

Maximus's most widely followed narrative assigns a fair value of $110 per share versus the last close of $86.64, pointing to significant upside if optimistic growth and margin assumptions play out. The outlook for a value reset is supported by new margin guidance and recent major contract wins, which could prompt a re-rating.

Pending implementation of new federal legislation (such as Medicaid work requirements, increased eligibility reviews, and SNAP payment integrity) is expected to significantly expand state demand for Maximus' compliance and administration services starting in FY27. This positions the company for an acceleration in organic revenue growth above historical trends.

Increasing regulatory complexity and the rising need for technology-driven, outcome-based delivery are leading governments to spend more on third-party administrators like Maximus. This trend supports higher client retention, contract expansion, and the potential for strengthened EBITDA and net margins through scale and operational leverage.

Read the complete narrative.

Want to see which analyst growth and margin projections support this bold new target? The narrative’s formula relies on notable upgrades that could challenge more cautious expectations. The most important insights lie within a few key assumptions. Find out what they are.

Result: Fair Value of $110 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, persistent government budget constraints or rapid adoption of self-service tools could limit Maximus’s earnings upside and weaken the bullish narrative.

Find out about the key risks to this Maximus narrative.

Build Your Own Maximus Narrative

If you’d rather challenge these outlooks or dive into the details yourself, you can shape your own Maximus narrative in just a few minutes, and Do it your way

A great starting point for your Maximus research is our analysis highlighting 4 key rewards and 1 important warning sign that could impact your investment decision.

Looking for more investment ideas?

Smart investors stay ahead by following where the best opportunities are. Simply Wall Street’s powerful screener uncovers trends that others might miss. Don’t let the next big winner slip through your fingers; act now to discover your next standout investment.

• Capitalize on niche opportunities by scanning these 26 quantum computing stocks with stakes in the rapidly advancing world of quantum computing and revolutionary tech platforms.
• Secure reliable income and long-term growth when you check out these 14 dividend stocks with yields > 3%, curated for high-yield potential and financial resilience.
• Get ahead of the mainstream by targeting these 26 AI penny stocks, featuring companies shaping the future of artificial intelligence innovation and automation.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com