| Valuation method | Value, $ | Upside, % |
|---|---|---|
| Artificial intelligence (AI) | 64.56 | -28 |
| Intrinsic value (DCF) | 0.00 | -100 |
| Graham-Dodd Method | 8.21 | -91 |
| Graham Formula | 80.31 | -10 |
Maximus, Inc. (NYSE: MMS) is a leading provider of business process services (BPS) to government health and human services programs, operating in the U.S. and internationally. The company specializes in program administration, appeals and assessments, and consulting services for critical government initiatives such as Medicaid, the Affordable Care Act, and Medicare. Maximus serves state, local, and federal agencies through its three segments: U.S. Services, U.S. Federal Services, and Outside the U.S. The company’s expertise in citizen engagement, digital self-service solutions, and eligibility support positions it as a key player in the government services sector. With a strong focus on modernization, data analytics, and IT infrastructure, Maximus helps governments streamline operations and improve service delivery. Headquartered in Tysons, Virginia, Maximus has built a reputation for reliability and efficiency in handling large-scale public sector contracts, making it a trusted partner for government agencies worldwide.
Maximus presents a stable investment opportunity with a focus on government-backed contracts, providing revenue predictability. The company’s diversified service offerings across health and human services programs mitigate sector-specific risks. However, reliance on government spending and regulatory changes could impact profitability. With a market cap of $4.08B, a beta of 0.607 (indicating lower volatility than the market), and a dividend yield of ~1.2%, Maximus appeals to income-focused investors. The company’s strong operating cash flow ($515M) supports its ability to service debt ($1.28B) and maintain shareholder returns. Risks include contract renegotiations and potential budget cuts in government programs.
Maximus holds a competitive advantage in the government BPS sector due to its deep expertise in health and human services program administration. Its long-standing relationships with federal and state agencies provide a stable revenue base, while its digital transformation capabilities enhance efficiency and scalability. The company’s U.S. Federal Services segment benefits from high barriers to entry due to stringent compliance requirements, limiting competition. However, Maximus faces competition from larger IT services firms and niche BPS providers. Its ability to integrate technology (e.g., AI-driven analytics and multichannel citizen engagement) differentiates it from traditional BPS players. The company’s international segment is smaller but growing, leveraging its U.S. experience to expand in markets like the UK and Australia. While Maximus has strong margins (net income of $307M in FY2024), it must continuously innovate to retain contracts amid increasing competition from tech-savvy rivals.