Value
8.8/10data confidence 83%| Component | Sub-score |
|---|---|
| P/E | 9.3 |
| P/S | 10.0 |
| EV/EBITDA | 8.0 |
| Fwd P/E | 9.8 |
| PEG | 7.3 |
- ▸Forward P/E: 6.1x
- ▸PEG: 0.95
- ▸Attractively valued
MMS · Why this verdict
Why Maximus (MMS) is rated SELL
Updated
Model-generated analysis — not investment advice. Not a registered investment advisor. Past performance does not guarantee future results.
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VerdictSELL
Overall score5.2/10
ConfidenceMEDIUM
MacroNEUTRAL
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
At a forward P/E of 6.7 times and a PEG of 1.04, the stock screens as attractively valued relative to both its earnings power and growth rate, with analyst consensus implying approximately 72% upside to the target price — a wide margin of safety relative to current levels. Bull case | The analyst consensus price target should remain above $80 and the forward P/E should expand toward double digits as the top-line recovery becomes visible to the market. | →Stable |
| CounterA persistently low multiple on a government-services business often reflects the market pricing in structural revenue pressure and contract concentration risk rather than a genuine mispricing; the discount may be fully justified by the fundamentals. | ||
More than 55% of revenue derives from U.S. federal government contracts alone, and the ten largest contracts account for approximately 60% of total revenue — a concentration profile that introduces abrupt, difficult-to-replace revenue risk if any major contract is not renewed. Bear case | Federal government revenue concentration should decline below 50% over 12 months as new commercial or state/local contracts diversify the customer base. | →Stable |
| CounterMulti-year government contract structures typically include formal renewal processes that provide more revenue visibility than equivalent commercial arrangements; the concentration may reflect a durable competitive advantage in winning public-sector work. | ||
Revenue has declined approximately 4% year-over-year, placing the growth dimension at the low end of the evaluation range and raising the question of whether the low earnings multiple reflects genuine value or a market assessment of a structurally pressured top line. Growth breakdown | Revenue should return to positive year-over-year growth above 3% for 2 consecutive quarters to validate that the decline is cyclical rather than structural. | →Stable |
| CounterThree of the four most recent quarters beat earnings estimates — including a 40.7% upside in the oldest reported quarter — demonstrating cost discipline that is generating earnings upside even as the top line contracts. | ||
Three of the four most recent quarters delivered earnings beats — including a 40.7% upside in the oldest reported quarter and a 5.3% beat in the most recent — with an average surprise of approximately 11%, demonstrating that management is consistently under-promising and over-delivering even in a contracting revenue environment. Earnings | The beat cadence should continue, with EPS beating consensus in at least 3 of the next 4 quarters, confirming that cost discipline is durable and not a one-time exercise. | →Stable |
| CounterOne quarter in the streak missed estimates, and cost-cutting-driven beats cannot continue indefinitely if the top line contracts further; the average surprise may compress as fewer cost levers remain. | ||
At a forward P/E of 6.7 times and a PEG of 1.04, the stock screens as attractively valued relative to both its earnings power and growth rate, with analyst consensus implying approximately 72% upside to the target price — a wide margin of safety relative to current levels.
→StableBull case
- Expectation
- The analyst consensus price target should remain above $80 and the forward P/E should expand toward double digits as the top-line recovery becomes visible to the market.
CounterA persistently low multiple on a government-services business often reflects the market pricing in structural revenue pressure and contract concentration risk rather than a genuine mispricing; the discount may be fully justified by the fundamentals.
More than 55% of revenue derives from U.S. federal government contracts alone, and the ten largest contracts account for approximately 60% of total revenue — a concentration profile that introduces abrupt, difficult-to-replace revenue risk if any major contract is not renewed.
→StableBear case
- Expectation
- Federal government revenue concentration should decline below 50% over 12 months as new commercial or state/local contracts diversify the customer base.
CounterMulti-year government contract structures typically include formal renewal processes that provide more revenue visibility than equivalent commercial arrangements; the concentration may reflect a durable competitive advantage in winning public-sector work.
Revenue has declined approximately 4% year-over-year, placing the growth dimension at the low end of the evaluation range and raising the question of whether the low earnings multiple reflects genuine value or a market assessment of a structurally pressured top line.
→StableGrowth breakdown
- Expectation
- Revenue should return to positive year-over-year growth above 3% for 2 consecutive quarters to validate that the decline is cyclical rather than structural.
CounterThree of the four most recent quarters beat earnings estimates — including a 40.7% upside in the oldest reported quarter — demonstrating cost discipline that is generating earnings upside even as the top line contracts.
Three of the four most recent quarters delivered earnings beats — including a 40.7% upside in the oldest reported quarter and a 5.3% beat in the most recent — with an average surprise of approximately 11%, demonstrating that management is consistently under-promising and over-delivering even in a contracting revenue environment.
→StableEarnings
- Expectation
- The beat cadence should continue, with EPS beating consensus in at least 3 of the next 4 quarters, confirming that cost discipline is durable and not a one-time exercise.
CounterOne quarter in the streak missed estimates, and cost-cutting-driven beats cannot continue indefinitely if the top line contracts further; the average surprise may compress as fewer cost levers remain.
TrendMatrix Research · core thesis
Engine thesis — one sentence
Maximus screens as attractively valued at a forward P/E of 6.7 times with analyst consensus implying 72% upside and a beat track record across 3 of the last 4 quarters, but more than half of revenue is concentrated in U.S. federal government contracts, revenue has declined roughly 4% year-over-year, and a confirmed 200-day moving average downtrend creates a setup that is compelling on valuation yet constrained by structural risks.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Per-dimension breakdown
Quality
5.1/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 7.4 |
| ROA | 5.8 |
| Gross margin | 1.1 |
| Op margin | 4.5 |
| Net margin | 3.5 |
| Current ratio | 7.6 |
| FCF quality | 5.4 |
| Moat | 4.2 |
| Piotroski F | 6.7 |
- ▸Earnings quality warning: 70% FCF/NI
- ▸No competitive moat
Growth
2.4/10data confidence 67%| Component | Sub-score |
|---|---|
| Rev growth | 1.5 |
| EPS growth | 3.3 |
- ▸Declining revenue: -4%
Momentum
3.6/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 3.5 |
| MACD | 0.0 |
| OBV | 10.0 |
| MA position | 1.0 |
| Volume | 3.4 |
- ▸Volume accumulation (rising OBV)
- ▸Below 200-MA, MA slope -4.7%/30d — confirmed downtrend
Sentiment
6.6/10data confidence 100%| Component | Sub-score |
|---|---|
| Analyst rating | 5.0 |
| Price target | 10.0 |
| erm sentiment | 5.0 |
- ▸Analyst upside: 88%
Insider
5.0/10data confidence 50%| Component | Sub-score |
|---|---|
| materiality | 5.0 |
| holder change | 5.1 |
- ▸No net insider activity — $0 (0.000% of mkt cap)
Peer rank
4.2/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 8.9 |
| quality rank | 6.6 |
| growth rank | 1.0 |
- ▸Attractive P/E vs peers
Technical
5.0/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 6.7 |
| support resistance | 7.1 |
| 52w position | 1.3 |
| gap | 5.0 |
Risk (lower is worse)
4.9/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 4.0 |
| days to cover | 4.8 |
| volatility | 2.9 |
| put call | 5.5 |
| implied vol | 2.3 |
| beta | 9.4 |
| debt equity | 5.2 |
- ▸High IV: 66%
- ▸Concentration risks: 2 HIGH, 1 MED (10-K Item 1A — sized via position_sizing, validated via buy_confidence)
Catalyst
6.4/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 5.0 |
| earnings history | 6.7 |
| earnings timing | 5.0 |
| surprise avg | 8.1 |
| dividend safety | 7.0 |
- ▸Strong earnings: 3B/1M
- ▸Dividend: 237.0%
How the verdict was assembled
Engine trigger
Multiple concerning factors. Consider reducing position.
Engine technical detail
verdict_path:
L4:PATH_F_SELLPassed (7)
- ASYMMETRY:7.8>=1.5
- INSIDER:OK
- 8K:CLEAN
- NEWS_EVENTS:NONE_RECENT
- EARNINGS_PROXIMITY:33d clear
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (2)
- MOMENTUM:3.6<4.5
- DEATH_CROSS:HARD_BLOCK
Warning (0)
none
Reward-to-Risk
7.78
Upside
+60.1%
Downside
7.7%
Sizing output
AVOID
SetupFalling Knife — Death cross, below all MAs, RSI 31, MACD bearish
EdgeNo clear edge — No clear edge identified
SuitabilitySpeculative — Drawdown -44% (>40% off 52w high)
Investment implication
The F-path SELL output reflects an overall score of 5.2 below the 5.6 soft trigger — multiple weakening dimensions accumulated rather than a single hard-floor breach. The strongest dimension ( Value at 8.8) was not enough to lift the adjusted overall above the threshold. Co-occurring failed gates ( MOMENTUM:3.6<4.5, DEATH_CROSS:HARD_BLOCK) reinforce the read. Current asymmetry R:R is 7.78 — supplementary context, not the trigger for this path.
The strongest dimensions are Value at 8.8, Sentiment at 6.6, and Catalyst at 6.4; the weakest are Growth at 2.4, Momentum at 3.6, and Peer rank at 4.2. The V9 engine flagged 2 failed gates, producing an asymmetric reward-to-risk of 7.78 and an engine sizing output of AVOID.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1Federal Contract Concentration Risk
Trip ifFederal government revenue concentration falls below 45% for 2 consecutive quarters as the company diversifies its customer base.
- P2Revenue Contraction Undermines Growth Thesis
Trip ifRevenue growth turns positive and exceeds 3% year-over-year for 2 consecutive quarters, indicating the top-line contraction has reversed.
- P3Compelling Valuation With Wide Upside
Trip ifAnalyst consensus price target is revised below $70 by 3 or more analysts within 12 months, compressing the implied upside below 15% from current levels.
- P4Earnings Beat Cadence Amid Revenue Pressure
Trip ifEPS surprise falls below 0% for 2 consecutive quarters, ending the beat cadence.