TYSONS, Va. - Maximus (NYSE: NYSE:MMS), a prominent provider of government services, has secured a five-year task order worth $87 million from the Internal Revenue Service (IRS) to provide comprehensive development and modernization services. This contract is part of the IRS's ongoing efforts to enhance customer service for taxpayers through its Enterprise Development, Operations Services (EDOS) contract.
The task order, awarded through the Blanket Purchase Agreement (BPA) established in May 2023, will see Maximus support the IRS Internal Management Division. This division manages the suite of financial management systems crucial for the agency's compliance and enforcement programs. In Fiscal Year 2023, these programs were instrumental in collecting over $104.1 billion in unpaid assessments, resulting in $68.3 billion after credit transfers.
Maximus will be responsible for General Ledger support and will handle the design and development of all functional and technical enhancements for the IRS's IO&A program. Additionally, the company will provide a broad spectrum of services, including systems development and modernization, IT program and project management, operations and maintenance support, and staffing for continuous operations.
This new task order expands Maximus's three-decade-long partnership with the IRS, which includes supporting the IRS Master File, the system used to store and process tax submissions.
Bruce Caswell, President and CEO of Maximus, highlighted the company's role in implementing large enterprise technologies and digital modernization strategies across the federal government. He expressed pride in the IRS's decision to enlarge Maximus's role in this critical work, emphasizing the company's commitment to improving public services and enhancing government efficiency.
The information reported here is based on a press release statement from Maximus. For further details on Maximus and its collaboration with the IRS, interested parties may visit the company's website.
"In other recent news, Maximus has reported a substantial increase in its Q2 revenue, which rose by 11.7% year-over-year, hitting $1.35 billion. This positive trend has led to an upward revision of its fiscal 2024 guidance.
The company's U.S. Federal Services segment played a significant role in this growth. Maximus also announced the expansion of its stock repurchase program, now authorizing up to $200 million in buybacks of its common stock.
In line with these developments, Maximus 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 wins, coupled with the company's focus on IT modernization and operational efficiency, are anticipated to fuel future growth. Despite a decrease of 7.2% in revenue from services outside the U.S., the company's long-term target debt ratio remains steady, between 2x to 3x.
These are the recent developments that have transpired at Maximus. While the company continues its strategic initiatives, it remains committed to maximizing shareholder value, as evidenced by its expanded stock buyback program and robust Q2 results."
InvestingPro Insights
Maximus (NYSE: MMS), with its recent $87 million task order from the IRS, is poised for growth. InvestingPro Tips suggest that the company's net income is expected to grow this year, and analysts have revised their earnings upwards for the upcoming period. This optimism is underpinned by the company's solid financial performance, as reflected in its latest metrics.
With a market capitalization of $5.32 billion, Maximus trades at a P/E ratio of 22.84, which is considered attractive relative to its near-term earnings growth. The company's PEG ratio, which measures the price of a stock relative to its earnings growth rate, stands at a compelling 0.63 as of the last twelve months leading up to Q2 2024. This indicates that the stock may be undervalued given its growth prospects.
Investors seeking stable returns might find comfort in knowing that Maximus has maintained dividend payments for 20 consecutive years, showcasing its commitment to shareholder returns. The dividend yield as of mid-2024 stands at 1.38%, complemented by a dividend growth of 7.14% during the same period. Moreover, the company's liquid assets exceed its short-term obligations, which provides financial flexibility and reduces liquidity risk.
For readers looking to delve deeper into the financial health and future outlook of Maximus, more InvestingPro Tips are available, which can be accessed through the dedicated page: https://www.investing.com/pro/MMS. There are currently 9 additional tips listed on InvestingPro. To gain full access to these insights, use the coupon code PRONEWS24 to get an extra 10% off a yearly or biyearly Pro and Pro+ subscription.
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