Maximus forecasts $8.10 EPS and $475M in free cash flow for fiscal 2026, focusing on AI and federal growth strategies.
Written by Emily J. Thompson, Senior Investment Analyst
Updated: Nov 20 2025
0mins
Should l Buy MMS?
Source: SeekingAlpha
Management Insights: Maximus reported higher-than-expected revenue and profitability for Q4 2025, with a 3.9% organic growth rate, driven by strong performance in U.S. Federal Services and stable contractual relationships. The company is optimistic about future growth, focusing on AI investments and expanding federal market opportunities.
Financial Performance: For fiscal year 2025, Maximus achieved $5.43 billion in revenue, a 2.4% increase, with significant contributions from U.S. Federal Services. The adjusted EBITDA margin was 12.9%, and free cash flow reached $366 million, with plans for debt reduction and share repurchases.
Fiscal 2026 Outlook: Revenue guidance for fiscal 2026 is set between $5.225 billion and $5.425 billion, with an adjusted EPS forecast of $7.95 to $8.25. Management anticipates some revenue headwinds due to non-recurrence of excess volumes but expects organic growth to partially offset this.
Risks and Strategic Focus: Management acknowledged potential risks such as delayed procurement and government shutdowns but remains confident in the essential nature of their services. The company is prioritizing disciplined M&A in the federal market and leveraging technology to enhance service delivery and operational efficiency.
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Analyst Views on MMS
About MMS
Maximus, Inc. is an operator of government health and human services programs and provider of technology solutions to governments. The Company operates through three segments: U.S. Services, U.S. Federal Services, and Outside the U.S. The U.S. Services segment provides a variety of business process services (BPS), such as program administration, appeals and assessments, and related consulting work for United States state and local government programs. The U.S. Federal Services segment delivers end-to-end solutions that help various United States federal government agencies, including program operations and management, clinical services, and technology solutions. The Outside the U.S. segment provides BPS for international governments and commercial clients. The services of this segment include health and disability assessments, program administration for employment services, wellbeing solutions, and other job seeker-related services. It also delivers services in the United Kingdom.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
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- Policy Background Analysis: Since its implementation in 2007, the PSLF program aims to provide loan forgiveness to borrowers working for certain non-profits or government entities, but delays affecting over 83,000 borrowers during the Trump administration have hindered their debt repayment progress.
- Borrower Reactions: Many borrowers feel discouraged by the long wait times, with some expressing skepticism about the approval of their applications, highlighting the need for improved transparency and efficiency from the Department of Education, which may lead to concerns about their future financial situations.
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- Guidance Upward Revision: The company updated its fiscal year 2026 revenue guidance to between $5.2 billion and $5.35 billion, reflecting confidence in future growth, while adjusted EPS guidance was raised to a range of $8.05 to $8.35, indicating over 11% year-over-year growth.
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- Revenue Decline: Despite the increase in net income, revenue fell to $1.35 billion from $1.40 billion year-over-year, primarily impacted by the divestiture of the U.S. Services Segment, highlighting market challenges.
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- Guidance Update: MAXIMUS narrowed its revenue guidance for fiscal 2026, expecting full-year revenue to range between $5.2 billion and $5.35 billion, below the consensus of $5.47 billion, indicating a cautious outlook on future market conditions.
- Earnings Outlook Raised: The company raised its adjusted EBITDA margin expectation by 30 basis points to approximately 14%, and now expects adjusted diluted EPS to range between $8.05 and $8.35, reflecting confidence in improving profitability.
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- Policy Background Analysis: Since its implementation in 2007, the PSLF program aims to provide loan forgiveness to borrowers working for certain non-profits or government entities, but delays affecting over 83,000 borrowers during the Trump administration have hindered their debt repayment progress.
- Borrower Reactions: Many borrowers feel discouraged by the long wait times, with some expressing skepticism about the approval of their applications, highlighting the need for improved transparency and efficiency from the Department of Education, which may lead to concerns about their future financial situations.
- Future Outlook: Despite the backlog, experts still recommend that eligible borrowers continue to apply for PSLF buyback, emphasizing the importance of making loan payments during the wait to avoid losing forgiveness eligibility due to plan changes, ensuring borrowers can successfully achieve debt relief.
See More
Maximus Reports Q1 2026 Earnings with Raised Guidance and Strong Pipeline
- Performance Stability: Maximus reported $1.35 billion in revenue for Q1 2026, a 4.1% decline year-over-year; however, CEO Bruce L. Caswell emphasized that the contract portfolio remained unaffected by last fall's shutdown, demonstrating the company's resilience in essential programs.
- Guidance Upward Revision: The company updated its fiscal year 2026 revenue guidance to between $5.2 billion and $5.35 billion, reflecting confidence in future growth, while adjusted EPS guidance was raised to a range of $8.05 to $8.35, indicating over 11% year-over-year growth.
- Technological Innovation: Maximus launched the AI-powered
See More
Maximus Reports Increased Net Income Despite Revenue Decline
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- Earnings Per Share Increase: Adjusted EPS rose to $1.85 from $1.61 last year, surpassing analysts' expectations of $1.82, reflecting enhanced profitability.
- Revenue Decline: Despite the increase in net income, revenue fell to $1.35 billion from $1.40 billion year-over-year, primarily impacted by the divestiture of the U.S. Services Segment, highlighting market challenges.
- Optimistic Outlook: The company raised its FY2026 EPS guidance to a range of $8.05 to $8.35 and expects revenue between $5.2 billion and $5.35 billion, demonstrating management's confidence in future performance.
See More
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- Earnings Beat: MAXIMUS reported a Q1 non-GAAP EPS of $1.85, exceeding expectations by $0.03, indicating stable profitability despite a decline in overall revenue.
- Slight Revenue Decline: The company’s Q1 revenue was $1.35 billion, down 3.6% year-over-year, missing market expectations by $20 million, reflecting increased market competition and the impact of a recent divestiture.
- Guidance Update: MAXIMUS narrowed its revenue guidance for fiscal 2026, expecting full-year revenue to range between $5.2 billion and $5.35 billion, below the consensus of $5.47 billion, indicating a cautious outlook on future market conditions.
- Earnings Outlook Raised: The company raised its adjusted EBITDA margin expectation by 30 basis points to approximately 14%, and now expects adjusted diluted EPS to range between $8.05 and $8.35, reflecting confidence in improving profitability.
See More
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- Financial Performance Overview: Maximus reported first-quarter revenue of $1.35 billion for fiscal year 2026, a 4.1% decrease from the prior year, yet diluted earnings per share rose to $1.70 from $0.69, indicating strong performance in government services.
- Earnings Guidance Raised: The company has adjusted its fiscal year 2026 revenue guidance to between $5.2 billion and $5.35 billion, while also raising its adjusted diluted earnings per share forecast to a range of $8.05 to $8.35, reflecting confidence in future performance and sustained market demand.
- Cash Flow and Dividends: Operating cash flow for the first quarter was a negative $244 million; however, the company declared a quarterly cash dividend of $0.33 per share, demonstrating a commitment to shareholder returns despite challenges in cash flow management.
- Strong Sales Pipeline: As of December 31, 2025, Maximus's sales pipeline totaled $59.1 billion, with new work opportunities representing approximately 59%, indicating a robust outlook for contract acquisition and market expansion in the future.
See More
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- Earnings Announcement Date: MAXIMUS (MMS) is set to release its Q1 2023 earnings on February 5 before market open, with a consensus EPS estimate of $1.82, reflecting a 13% year-over-year growth that indicates sustained profitability.
- Revenue Expectations: The revenue estimate stands at $1.37 billion, representing a 2.1% decline year-over-year, which may suggest competitive pressures in the market, necessitating a strategic focus on recovery for future growth.
- Historical Performance Review: Over the past two years, MAXIMUS has beaten EPS estimates 75% of the time and revenue estimates 88% of the time, showcasing the company's financial stability and effective management practices.
- Forecast Revision Trends: In the last three months, EPS estimates have seen two upward revisions with no downward adjustments, while revenue estimates experienced one downward revision, indicating fluctuating market confidence in the company's future earnings potential, warranting close attention to the upcoming earnings report for its implications.
See More
