Maximus boosts stock buyback program by $200 million

TYSONS, Va. - Maximus (NYSE:MMS), a $4.3 billion market cap provider of government services with a perfect Piotroski Score of 9 according to InvestingPro, has announced an increase in its stock repurchase program by $200 million. This move follows the completion of the previous $200 million stock buyback authorization that was announced in June 2024.

As of September 30, 2024, the company had an available capacity of $171.4 million under the previous authorization. However, recent share purchases have utilized the remaining capacity. With the stock currently trading near its 52-week low of $70.00 and a P/E ratio of 14.15, the company plans to continue buying back shares opportunistically, contingent upon market conditions and corporate considerations.

Bruce Caswell, President and CEO of Maximus, stated that this decision aligns with the company's strategic approach to stock repurchases and reflects their confidence in the company's future. He emphasized that Maximus remains committed to its disciplined capital allocation strategy to maximize shareholder value.

The repurchase program allows for stock acquisition through various means, including open market transactions, 10b5-1 plans, and privately negotiated deals. However, there is no mandate for the company to purchase a specific number of shares, nor is there a set expiration date for the program. The initiative can be altered, paused, or stopped based on the company's discretion.

This announcement is based on a press release statement and contains forward-looking statements regarding Maximus's stock purchase program and capital allocation priorities. These are subject to change and may not unfold as anticipated due to various factors, including market dynamics and shifts in the company's capital allocation strategies.

Maximus is a strategic partner to government entities, aiming to enhance public service delivery amidst a range of challenges. The company provides business process management, consulting services, and technology solutions designed to improve public outcomes and government program efficiency. With a healthy current ratio of 1.49 and moderate debt levels, analysis from InvestingPro suggests the stock is currently undervalued. Discover comprehensive insights and 10 additional ProTips for Maximus with an InvestingPro subscription, including exclusive access to the detailed Pro Research Report.

In other recent news, Maximus Inc (NYSE:MMS). has seen several significant developments. The company reported a robust fiscal year 2024 performance, with an organic revenue increase of 8.8% and a record adjusted earnings per share (EPS) of $6.11. Free cash flow also saw a substantial rise, reaching over $400 million, almost double the previous year's figure.

However, Maximus's contract with the U.S. Department of Health and Human Services, Centers for Medicare and Medicaid Services (CMS) for Contact Center Operations was cancelled. This contract was intended for services that Maximus is currently contracted to provide, with option periods extending up to 2031.

In a separate development, Maximus has dismissed Ernst & Young LLP as its independent registered public accounting firm and appointed KPMG LLP to take over auditing responsibilities for the fiscal year ending September 30, 2025. The company's financial health remains strong, and the change is contingent on the signing of an engagement letter and KPMG's standard client acceptance procedures.

Maximus is projecting fiscal 2025 revenue to be between $5.275 billion and $5.425 billion, with an adjusted EPS forecasted to be in the range of $5.70 to $6.00 per share. These recent developments are essential for investors to consider as Maximus navigates its future financial trajectory.

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