8 Most Undervalued Industrial Stocks to Buy According to Analysts

5) Maximus, Inc. (NYSE:MMS)

Forward P/E as of October 8: 15.22x

Number of Hedge Fund Holders: 22

Average Upside Potential: 25.69%

Maximus, Inc. (NYSE:MMS) operates as a provider of government services in the US and internationally.

The recent contract wins for Maximus, Inc. (NYSE:MMS) include task orders and contracts with the IRS, TSA, FEMA, and the state of Pennsylvania totalling more than $596 million. The revenue for FY 2025 is expected to be similar to FY 2024, with a strong focus on maintaining an adjusted OI margin of at least 10%. Maximus, Inc. (NYSE:MMS) continues to invest in technology modernization and customer services in a bid to support long-term growth.

The company enjoys a healthy pipeline of opportunities and anticipates organic growth via base growth and new work awards. Maximus, Inc. (NYSE:MMS) remains optimistic about its ability to navigate policy changes and administration shifts post-election. It has raised its FY 2024 guidance, with revenues anticipated to be between $5.25 billion – $5.35 billion. Maximus, Inc. (NYSE:MMS)’s ability to secure and manage government contracts should continue to help its growth prospects in the near term.

Talking about the contract wins, the company secured a $70 million Blanket Purchase Agreement (BPA) with the Department of Energy and a task order on the Office of Personnel Management Customer Support Center BPA. Such strategic developments, together with its focus on IT modernization and operational efficiency, should drive future growth.

The shares of Maximus, Inc. (NYSE:MMS) have an average price target of $110.00, as per Wall Street. ClearBridge Investments, an investment management company, released its first quarter 2024 investor letter. Here is what the fund said:

“We exited a position in Maximus, Inc. (NYSE:MMS), in the industrials sector, which operates as a provider of government services in the U.S. and internationally. Given our concerns over difficult earnings comparisons expected in fiscal 2024 after the resumption of Medicaid determinations, disruption from a potential change in presidential administration, and new uncertainties over potential AI disruption to its services over the next 10 years, we made the decision to sell the position.”