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what it is
Maximus runs Medicaid, CHIP, ACA, and welfare-to-work programs for governments.
how it gets paid
Last year Maximus made $5.4B in revenue. U.S. Federal Services was the main engine at $3.1B, or 57% of sales.
why it's growing
Revenue grew 2.4% last year. Maximus, though, should be able to build on the strong margin expansion shown in fiscal 2025.
what just happened
EPS hit $1.85 versus $1.72 expected, while revenue stayed at $1.3B.
At a glance
B+ balance sheet — decent shape, but not bulletproof
70/100 earnings predictability — reasonably predictable
12.8x trailing p/e — the market's not buying it — or you found a deal
1.5% dividend yield — cash in your pocket every quarter
15.0% return on capital — nothing to write home about
xvary composite: 72/100 — average
What they do
Maximus runs Medicaid, CHIP, ACA, and welfare-to-work programs for governments.
You are not buying a chip maker. You are buying a company with 37,200 employees and earnings predictability of 70. 57% of 2025 revenue came from U.S. Federal Services, and 32% came from U.S. Services, so one lane does not carry the whole truck.
How they make money
$5.4B
annual revenue · their business grew +2.4% last year
U.S. Federal Services
$3.1B
U.S. Services
$1.7B
International
$0.6B
The products that matter
administers public-sector programs
Government Program Administration
$5.4B · 100% of revenue
it's the entire business: $5.4B in annual revenue tied to government service contracts, with 8.4% net margin left after the work gets done.
100% of revenue
defense technology support
Defense Contract Expansion
$160M+ contract wins
two U.S. Air Force awards worth more than $160M show management is pushing beyond health administration. It's still small next to $5.4B in revenue, but it matters because it broadens the story.
new market
shareholder cash return
Dividend
$0.33 quarterly · 1.5% yield
the dividend was raised 10% to $0.33 a share. You are getting paid to wait, just not enough for this to trade like a yield vehicle.
capital return
Key numbers
$5.4B
annual revenue
That is the whole top line. If 4% evaporates, you are talking about roughly $216M.
12.8x
trailing p/e
P/E -> price to earnings -> you pay $12.80 for each $1 of trailing earnings. So what: this is not priced like a story stock.
15.0%
return on capital
Return on capital -> profit from money invested -> $100 of capital is earning about $15. So what: the business is using its cash well.
$1.3B
long-term debt
Debt is 20% of capital, so the balance sheet is not screaming for help.
Financial health
B+
strength
- balance sheet grade B+ — solid but not elite
- risk rank 3 — safer than 50% of stocks
- price stability 80 / 100
- long-term debt $1.3B (20% of capital)
- net profit margin 7.6% — keeps 8 cents of every dollar in revenue
- return on equity 20% — $0.20 profit for every $1 investors have put in
B+ — functional but not a standout on the balance sheet.
Total return vs. market
You invested $10,000 in MMS 3 years ago → it's now worth $13,110.
The index would have given you $13,880.
source: institutional data · total return
What just happened
beat estimates
EPS hit $1.85 versus $1.72 expected, while revenue stayed at $1.3B.
EDGAR's latest-quarter filing shows $1.3B revenue, down 4% vs. prior year, with $1.70 EPS and 23.7% gross margin. Yahoo's last-earnings feed shows $1.85 versus $1.72 expected, so the beat is real even if the feeds do not line up perfectly.
$1.3B
revenue
$1.85
eps
23.7%
gross margin
the number that mattered
The $1.85 EPS beat mattered because it came with 23.7% gross margin, not revenue growth. That means the business is making more from each dollar even as sales fell 4%.
-
maximus, though, should be able to build on the strong margin expansion shown in fiscal 2025.
-
this anticipated improvement— aided by technology initiatives and a closewatch on expenses—along with the boost provided by recent stock buybacks, should lift full-year earnings 8%-12%.
-
the company is making inroads into the defense market.during the second half of calendar 2025, maximus secured two contracts valued at more than $160 million to support cyber command and control systems for the u.s.
-
air force.more announcements along these lines are likely, as management anticipates that technological modernization work with defense and national security agencies will provide significant near-term growth opportunities. elsewhere, the one big beautiful bill act signed last summer offers the potential for additional business related to medicaid and snap (supplemental nutrition assistance program).
-
maximus has hiked its quarterly dividend by 10%, to $0.33 a share.the yield still probably isn’t sufficient to entice income-oriented investors, but a modest payout ratio and solid prospects for long-term earnings growth suggest the distribution should continue to rise in the three to five years ahead. in the meantime, the company ought to have the flexibility to use excess cash to repurchase stock or make strategic acquisitions.
source: company earnings report, 2026
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What could go wrong
the #1 risk is failure to renew major public-sector service contracts.
med
contract renewal risk
all $5.4B of revenue comes from government-backed work. Lose a major contract and the market will stop calling 12.8x earnings cheap.
This is the core risk because 100% of revenue depends on agencies choosing to renew, rebid, or replace the work.
med
budget and policy shifts
health-program administration looks stable until spending priorities change. A political or budget reset can pressure volumes, contract scope, or pricing.
When your customer is the government, policy is not background noise. It is revenue exposure.
med
execution risk on newer defense work
more than $160M in new Air Force awards is encouraging. It also means entering work streams where execution mistakes can damage both margins and future win rates.
If new contracts scale badly, the diversification story weakens fast.
med
margin giveback
the current optimism leans heavily on fiscal 2025 margin expansion and the latest $1.70 quarter. If costs reaccelerate, the cheap multiple may turn out to be a warning label.
An 8.4% net margin does not leave infinite room for mistakes.
a forced contract loss or budget reset would hit the same place: the $5.4B revenue base that supports the whole stock.
source: institutional data · regulatory filings · risk analysis
Pay attention to
earnings
next report expected may
the next quarter tells you whether the $1.70 EPS jump was a new baseline or a very good quarter.
metric
revenue vs. the $5B estimate
the street expects roughly $5B this year, below the current $5.4B base. That gap is the number to watch.
risk
major contract renewals
this is a government-contract business. Renewal headlines matter more here than clever valuation arguments.
trend
defense wins after the first $160M+
one contract batch is a start. A repeat pattern would make the diversification case real.
Analyst rankings
short-term outlook
top 5%
momentum score 1 — the highest rating. in human-speak, analysts think MMS has unusually strong near-term performance potential.
risk profile
average
stability score 3 — neither a bunker stock nor a chaos stock. Middle-of-the-pack risk fits a contractor with real exposure to renewals.
chart momentum
average
technical score 3 — the chart is not screaming anything dramatic. The investment case has to come from the business, not the tape.
earnings predictability
70 / 100
reasonably predictable, not perfect. Contract timing and margin swings can still create surprises.
source: institutional data
Institutional activity
institutions have been net buying for 2 consecutive quarters — 190 buyers vs. 172 sellers in 3q2025. total institutional holdings: 55.7M shares. net buying for 2 quarters.
source: institutional data
Price targets
3-5 year target range
$73
$139
$94
current price
$106
target midpoint · +12% from current · 3-5yr high: $190 (+100% · 20% ann'l return)
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