TYSONS, Va. - Maximus (NYSE:MMS), a prominent provider of government services globally, has announced the expansion of its stock repurchase program, now authorizing up to $200 million in buybacks of its common stock. This updated figure includes about $6 million left over from the previous buyback initiative.
The company's decision to acquire shares will be based on market conditions and prices, corporate needs, and other influencing factors. Shares may be purchased either on the open market or through private transactions, as opportunities and circumstances allow.
Bruce Caswell, President and CEO of Maximus, noted the expansion aligns with the company's calculated approach to stock repurchases, which aims to maximize shareholder value. Caswell reaffirmed that the company's capital allocation priorities remain disciplined and focused on shareholder benefits.
Since March 31, 2024, Maximus has repurchased 538,978 shares, which amounts to roughly $44.5 million. This move underlines the company's ongoing commitment to strategically manage its capital.
Maximus is recognized for partnering with governments worldwide to enhance public service delivery amidst technological, health, economic, environmental, and social complexities. The company is known for its expertise in program service delivery, operational excellence, and understanding of beneficiary needs, providing business process management, consulting services, and technology solutions that aim to improve outcomes for public programs and increase government efficiency.
In other recent news, Maximus has reported a noteworthy increase in its Q2 revenue, leading to an upward revision of its fiscal 2024 guidance. The company's revenue rose by 11.7% year-over-year, reaching $1.35 billion, with a significant boost coming from the U.S. Federal Services segment. Adjusted operating income and adjusted EPS forecasts were also raised, reflecting Maximus' strong performance.
The company has secured recent contract wins, including a $70 million BPA with the Department of Energy and a task order on the OPM Customer Support Center BPA. These developments, along with Maximus' focus on IT modernization and operational efficiency, are expected to drive future growth.
However, revenue from services outside the U.S. saw a decrease of 7.2%. Despite this, the company's long-term target debt ratio remains steady, between 2x to 3x.
InvestingPro Insights
As Maximus (NYSE:MMS) continues to navigate the complexities of global public service delivery, its financial strength and strategic initiatives remain crucial for investors. With a market capitalization of $5.16 billion and a robust revenue growth of 7.67% over the last twelve months as of Q2 2024, Maximus showcases a solid financial footing that supports its stock repurchase endeavors.
The company's prudent approach to capital management is further illustrated by its ability to maintain dividend payments for an impressive 20 consecutive years, a testament to its financial resilience and commitment to shareholder returns—an aspect that might interest dividend-focused investors. Additionally, Maximus operates with a moderate level of debt, ensuring a stable financial structure for future operations and investments.
InvestingPro Tips highlight that Maximus is expected to see an increase in net income this year, with 3 analysts having revised their earnings upwards for the upcoming period. This optimism is reflected in the company's low P/E ratio of 22.19 relative to near-term earnings growth, indicating potential undervaluation compared to its earnings prospects.
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