MAXIMUS Earnings Preview

MAXIMUS (NYSE: MMS  ) will try to beat its earnings estimates for the third consecutive quarter. The company will unveil its latest earnings Thursday. Maximus provides operations program management and consulting services to the government and government agencies in the United States and to foreign governments.

What analysts say:

• Buy, sell, or hold?: Analysts are very bullish on this stock, unanimously backing it as a buy. Analysts like MAXIMUS better than competitor FTI Consulting overall. Three out of 10 analysts rate FTI Consulting a buy compared with two of two for MAXIMUS. MAXIMUS' rating hasn't changed over the past three months.
• Revenue Forecasts: On average, analysts predict $233.1 million in revenue this quarter. That would represent a rise of 10.7% from the year-ago quarter.
• Wall Street Earnings Expectations: The average analyst estimate is earnings of $0.52 per share. Estimates range from $0.50 to $0.54.

What our community says:
CAPS All-Stars are solidly behind the stock with 96.3% granting it an "outperform" rating. The community at large concurs with the All-Stars with 91% giving it a rating of "outperform." Fools are bullish on MAXIMUS, though the message boards have been quiet lately with only 19 posts in the past 30 days. Despite the majority sentiment in favor of MAXIMUS, the stock has a middling CAPS rating of three out of five stars.

Management:
MAXIMUS' profit has risen year over year by an average of 51.2%. Revenue has now gone up for three straight quarters. The company raised its gross margin by 2.8 percentage points in the last quarter. Revenue rose 11.4% while cost of sales rose 7.2% to $164.1 million from a year earlier.

Now let's look at how efficient management is at running the business. Traditionally, margins represent the efficiency with which companies capture portions of sales dollars. The following table shows gross, operating, and net margins over the past four quarters.

Quarter	Q2	Q1	Q4	Q3
Gross Margin	27.8%	26.1%	28.2%	27.2%
Operating Margin	13.0%	12.7%	13.7%	12.2%
Net Margin	8.0%	8.2%	10.1%	8.2%

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