Maximus, Inc. reports 22.0% EBITDA growth in 2020 and 19.9% Revenue growth
11/19/2020 • About Maximus, Inc. (
$MMS) • By InTwits
Maximus, Inc. reported FY2020 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Maximus, Inc. is a growth stock: FY2020 revenue growth was 19.9%, 5 year revenue CAGR was 10.5% at FY2020 ROIC 20.5%
- EBITDA Margin is relatively stable: 14.2% in FY2020 vs. 13.9% in FY2019 vs. 14.9% in FY2016
- Maximus, Inc. has low CAPEX intensity: 5 year average CAPEX/Revenue was 1.5%. At the same time it's a lot of higher than industry average of 3.2%.
- CAPEX is quite volatile: $41m in FY2020, $67m in FY2019, $27m in FY2018, $24m in FY2017, $46m in FY2016
- The company has highly profitable business model: ROIC is 20.5%
Below you can find a comprehensive analysis of the key data driving the company's performance and the stock price.
Revenue and profitability
The company's Revenue surged on 19.9%. Revenue growth showed acceleration in FY20Q4 - it increased 22.4% YoY. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin increased on 2.1 pp from -1.0% to 1.0% in FY2020.
Gross Margin decreased on 2.7 pp from 23.2% to 20.5% in FY2020. During FY2016-FY2020 Gross Margin topped in FY2017 at 25.0% and was declining since that time. SG&A as a % of Revenue showed almost no change in FY2020.
Net Income margin decreased on 2.1 pp from 8.3% to 6.2% in FY2020. During FY2016-FY2020 Net Income margin topped in FY2018 at 9.2% and was declining since that time.
Investments (CAPEX, working capital and M&A)
In FY2020 Maximus, Inc. had CAPEX/Revenue of 1.2%. The company's CAPEX/Revenue showed almost no change from FY2017 to FY2020. It's average CAPEX/Revenue for the last three years was 1.5%.
Return on investment
The company operates at high and attractive ROIC (20.5%) while ROE is a bit lower (17.2%). ROIC decreased on 5.5 pp from 26.0% to 20.5% in FY2020. ROE decreased on 3.4 pp from 20.7% to 17.2% in FY2020. ROIC stuck to a declining trend at -3.0 pp per annum in FY2016-FY2020. ROE followed a declining trend at -2.2 pp per annum in FY2016-FY2020.
Leverage (Debt)
Company's Net Debt / EBITDA is 0.3x and Debt / EBITDA is 0.4x. Net Debt / EBITDA surged on 0.5x from -0.2x to 0.3x in FY2020. Debt surged on 2,112% while cash dropped on 32.0%. During the last 5 years Net Debt/EBITDA bottomed in FY2018 at -1.0x and was growing since that time.
Maximus, Inc. has short term refinancing risk: cash is only 78.3% of short term debt.
Valuation and dividends
The company's trades at EV/EBITDA 9.4x and P/E 20.9x.
Management team
Bruce L Caswell is a the company's CEO. Bruce L Caswell has spent 2 years with the company. Richard J Nadeau "Rick" is a the company's CFO. Richard J Nadeau "Rick" has spent 6 years at the company.
Financial and operational results
FY ended 09/30/2020
Maximus, Inc. ($MMS) key annual financial indicators| mln. $ | 2016 | 2017 | 2018 | 2019 | 2020 | 2020/2019 |
|---|
P&L
|
|---|
| Revenue | 2,403 | 2,451 | 2,392 | 2,887 | 3,462 | 19.9% |
| Gross Profit | 562 | 612 | 594 | 671 | 711 | 5.9% |
| SG&A | 268 | 285 | 285 | 321 | 387 | 20.6% |
| EBITDA | 358 | 381 | 358 | 403 | 491 | 22.0% |
| EBIT | 287 | 314 | 295 | | | |
| Tax | 106 | 102 | 78 | | | |
| Net Income | 178 | 209 | 221 | 241 | 215 | -10.9% |
| Stock Based Compensation | 19 | 21 | 20 | | | |
Balance Sheet
|
|---|
| Cash | 66 | 166 | 349 | 106 | 72 | -32.0% |
| Accounts Receivable | 481 | 431 | 389 | | | |
| Short Term Debt | 0 | 0 | 0 | 10 | 92 | 848.7% |
| Long Term Debt | 165 | 1 | 0 | 0 | 122 | |
Cash flow
|
|---|
| Capex | 46 | 24 | 27 | 67 | 41 | -39.1% |
| Dividends | 12 | 12 | 12 | | | |
| Acquisitions | 47 | 3 | 0 | | | |
Ratios
|
|---|
| Revenue growth | 14.5% | 2.0% | -2.4% | 20.7% | 19.9% | |
| EBITDA growth | 13.4% | 6.4% | -6.2% | 12.6% | 22.0% | |
|
|---|
| Gross Margin | 23.4% | 25.0% | 24.8% | 23.2% | 20.5% | -2.7% |
| EBITDA Margin | 14.9% | 15.6% | 15.0% | 13.9% | 14.2% | 0.2% |
| EBIT Margin | 11.9% | 12.8% | 12.4% | | |
| SG&A, % of revenue | 11.2% | 11.6% | 11.9% | 11.1% | 11.2% | 0.1% |
| SBC, % of revenue | 0.8% | 0.9% | 0.8% | | |
| Net Income Margin | 7.4% | 8.5% | 9.2% | 8.3% | 6.2% | -2.1% |
| CAPEX, % of revenue | 1.9% | 1.0% | 1.1% | 2.3% | 1.2% | -1.1% |
|
|---|
| ROIC | 32.3% | 32.8% | 28.3% | 26.0% | 20.5% | -5.5% |
| ROE | 26.2% | 24.8% | 21.8% | 20.7% | 17.2% | -3.4% |
| Net Debt/EBITDA | 0.3x | -0.4x | -1.0x | -0.2x | 0.3x | 0.5x |
People
|
|---|
| Insider ownership | 1.9% | 1.9% | 1.9% | | | |
| Employees | 18,800 | 20,400 | 18,600 | | | |
| Revenue/Employee, th. $ | 128 | 120 | 129 | | | |
Maximus, Inc. ($MMS) key quoterly financial indicators
| mln. $ | FY20Q1 | FY20Q2 | FY20Q3 | FY20Q4 | | YoY change |
|---|
P&L
|
|---|
| Revenue | 818 | 818 | 901 | 924 | | 23.1% | 11.1% | 23.4% | 22.4% |
| EBITDA | 129 | 86 | 138 | 110 | | 41.8% | -16.5% | 31.8% | 5.8% |
| Net Income | 59 | 28 | 64 | 64 | | 5.0% | -55.3% | 2.5% | 5.9% |
Balance Sheet
|
|---|
| Cash | 150 | 126 | 82 | 72 | | 173.2% | 169.8% | 14.7% | -32.0% |
| Short Term Debt | 93 | 88 | 82 | 92 | | 1,707.8% | 2,290.9% | 2,144.5% | 848.7% |
| Long Term Debt | 122 | 259 | 248 | 122 | | 1.1% | 244.6% | 92,585.4% | - |
Ratios
|
|---|
| Gross Margin | 21.4% | 18.7% | 20.6% | 21.3% | | -2.5% | -4.3% | -3.3% | -1.0% |
| EBITDA Margin | 15.7% | 10.5% | 15.3% | 12.0% | | 2.1% | -3.5% | 1.0% | -1.9% |
| Net Income Margin | 7.2% | 3.4% | 7.2% | 6.9% | | -1.2% | -5.0% | -1.5% | -1.1% |
Peers in Data Processing & Outsourced Services
Below you can find Maximus, Inc. benchmarking vs. other companies in Data Processing & Outsourced Services industry. It's shown for the period of 5 years for the key financial metrics. Each table has median value for all the companies in the industry together with individual financial data of the top-5 companies in the industry by particular financial metric.
Top companies by Revenue growth, %
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| Square, Inc. ($SQ) | - | 29.6% | 49.0% | 42.9% | 101.5% |
| Global Payments Inc. ($GPN) | - | 37.2% | -15.3% | 45.9% | 51.1% |
| Fiserv, Inc. ($FISV) | - | 3.5% | 2.2% | 74.9% | 45.8% |
| NIC Inc. ($EGOV) | - | 5.8% | 2.5% | 2.7% | 30.0% |
| StoneCo Ltd ($STNE) | - | 74.3% | 106.0% | 63.1% | 28.9% |
| |
|---|
| Median (39 companies) | 6.7% | 11.8% | 7.5% | 8.9% | -3.3% |
|---|
| Maximus, Inc. ($MMS) | - | 2.0% | -2.4% | 20.7% | 19.9% |
Top companies by Gross margin, %
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| Verra Mobility Corp ($VRRM) | - | 97.4% | 97.5% | 95.7% | 91.5% |
| EVO Payments, Inc. ($EVOP) | - | - | - | 80.2% | 80.8% |
| StoneCo Ltd ($STNE) | 69.7% | 70.8% | 79.5% | 83.4% | 76.8% |
| WEX Inc. ($WEX) | 54.7% | 58.8% | 63.3% | 61.7% | 56.8% |
| Sabre Corporation ($SABR) | 32.2% | 30.1% | 27.8% | 56.6% | 56.6% |
| |
|---|
| Median (31 companies) | 39.5% | 39.5% | 41.0% | 41.7% | 36.7% |
|---|
| Maximus, Inc. ($MMS) | 23.4% | 25.0% | 24.8% | 23.2% | 20.5% |
Top companies by EBITDA margin, %
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| Visa Inc. ($V) | 55.6% | 69.2% | 65.8% | 68.1% | 68.5% |
| Mastercard Incorporated ($MA) | 56.9% | 56.5% | 51.8% | 60.9% | 56.6% |
| FleetCor Technologies, Inc. ($FLT) | 52.0% | 50.8% | 55.9% | 57.6% | 52.2% |
| StoneCo Ltd ($STNE) | 31.4% | 26.0% | 53.0% | 62.4% | 52.1% |
| Black Knight, Inc. ($BKI) | 43.0% | 44.6% | 43.3% | 46.0% | 44.9% |
| |
|---|
| Median (38 companies) | 21.3% | 21.1% | 19.4% | 22.2% | 19.1% |
|---|
| Maximus, Inc. ($MMS) | 14.9% | 15.6% | 15.0% | 13.9% | 14.2% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| PagSeguro Digital Ltd. ($PAGS) | 6.4% | 4.3% | 1.4% | 5.8% | 22.3% |
| StoneCo Ltd ($STNE) | 7.2% | 18.4% | 8.9% | 12.9% | 11.2% |
| Cardtronics plc ($CATM) | 9.9% | 9.6% | 8.0% | 9.3% | 8.3% |
| Verra Mobility Corp ($VRRM) | - | 11.5% | 7.2% | 6.6% | 6.2% |
| Fiserv, Inc. ($FISV) | 5.3% | 5.0% | 6.2% | 7.1% | 6.1% |
| |
|---|
| Median (38 companies) | 3.2% | 2.9% | 3.2% | 3.3% | 3.1% |
|---|
| Maximus, Inc. ($MMS) | 1.9% | 1.0% | 1.1% | 2.3% | 1.2% |
Top companies by ROIC, %
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| Mastercard Incorporated ($MA) | 57.5% | 60.6% | 64.7% | 72.7% | 47.6% |
| International Money Express, Inc. ($IMXI) | -1.3% | -1.4% | 12.1% | 36.0% | 31.4% |
| NIC Inc. ($EGOV) | 63.1% | 52.1% | 39.3% | 26.5% | 30.8% |
| Visa Inc. ($V) | 18.1% | 21.9% | 23.0% | 27.2% | 23.2% |
| Western Union Company (The) ($WU) | 10.7% | 11.9% | 27.8% | 21.5% | 22.1% |
| |
|---|
| Median (39 companies) | 11.1% | 10.6% | 10.2% | 8.2% | 5.5% |
|---|
| Maximus, Inc. ($MMS) | 32.3% | 32.8% | 28.3% | 26.0% | 20.5% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| WEX Inc. ($WEX) | 6.7x | 4.4x | 3.1x | 3.4x | 12.1x |
| Exela Technologies Inc ($XELAU) | 8.1x | - | 9.7x | - | 10.7x |
| Alliance Data Systems Corporation ($ADS) | 10.7x | 10.1x | 9.0x | 11.7x | 9.2x |
| Verra Mobility Corp ($VRRM) | - | 10.7x | 6.9x | 3.5x | 4.7x |
| GreenSky, Inc. ($GSKY) | -1.5x | -1.5x | 0.5x | 1.5x | 4.6x |
| |
|---|
| Median (35 companies) | 1.6x | 2.3x | 2.2x | 2.3x | 2.1x |
|---|
| Maximus, Inc. ($MMS) | 0.3x | -0.4x | -1.0x | -0.2x | 0.3x |
