Earnings Beat: Maximus, Inc. Just Beat Analyst Forecasts, And Analysts Have Been Updating Their Models

Maximus, Inc. (NYSE:MMS) just released its latest second-quarter results and things are looking bullish. It was overall a positive result, with revenues beating expectations by 5.2% to hit US$1.3b. Maximus also reported a statutory profit of US$1.31, which was an impressive 26% above what the analysts had forecast. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.

Check out our latest analysis for Maximus

Following last week's earnings report, Maximus' three analysts are forecasting 2024 revenues to be US$5.22b, approximately in line with the last 12 months. Per-share earnings are expected to swell 19% to US$4.60. Before this earnings report, the analysts had been forecasting revenues of US$5.17b and earnings per share (EPS) of US$4.37 in 2024. So the consensus seems to have become somewhat more optimistic on Maximus' earnings potential following these results.

The consensus price target rose 7.3% to US$110, suggesting that higher earnings estimates flow through to the stock's valuation as well.

Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. We would highlight that Maximus' revenue growth is expected to slow, with the forecast 3.7% annualised growth rate until the end of 2024 being well below the historical 13% p.a. growth over the last five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 5.7% per year. So it's pretty clear that, while revenue growth is expected to slow down, the wider industry is also expected to grow faster than Maximus.

The Bottom Line

The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around Maximus' earnings potential next year. On the plus side, there were no major changes to revenue estimates; although forecasts imply they will perform worse than the wider industry. There was also a nice increase in the price target, with the analysts clearly feeling that the intrinsic value of the business is improving.

Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. We have estimates - from multiple Maximus analysts - going out to 2025, and you can see them free on our platform here.

It is also worth noting that we have found 1 warning sign for Maximus that you need to take into consideration.

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

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.