Maximus, Inc. (MMS) experienced a surge in its stock price on Wednesday following the announcement that the U.S. Department of Health and Human Services’ Centers for Medicare & Medicaid Services (CMS) has withdrawn its plan for early re-procurement of the Contact Center Operations (CCO) contract for the 1-800-MEDICARE and Federal Marketplace.
This decision is a significant win for Maximus, as the early re-procurement would have forced the company to re-compete for the very contract it currently holds. Instead, Maximus will continue its vital work supporting the administration and accessibility of Medicare and the Federal Marketplace, extending its contract with available option periods until 2031. This represents a considerable period of guaranteed revenue and operational stability for the company.
Bruce Caswell, President and CEO of Maximus, expressed his satisfaction with the outcome, stating, “We are pleased with this outcome and appreciate the opportunity to continue supporting HHS and CMS in their vital missions and look forward to delivering innovative, high-quality, and reliable solutions that benefit the American public.” He further highlighted the consistent performance of Maximus employees in managing this crucial program, providing essential support to over 75 million eligible Americans.
The positive news surrounding the contract extension also significantly impacts Maximus’ financial projections. For Fiscal Year 25 (FY25), the company anticipates revenue between $5.275 billion and $5.425 billion, exceeding previous estimates of $5.297 billion. Adjusted diluted earnings per share (excluding amortization of intangible assets and divestiture-related charges) are expected to fall between $5.70 and $6.00, outperforming earlier predictions of $5.07. This signifies robust financial health and growth potential for Maximus.
The market reacted favorably to this positive development. At the close of Wednesday’s trading, MMS shares saw an increase of 0.5%, reaching $73.34. This reflects investor confidence in Maximus’ continued success and its crucial role in the healthcare sector. The extension of this vital contract secures Maximus’ position as a key player in supporting millions of Americans’ access to healthcare, ensuring the company’s continued growth and success in the years to come. The positive financial outlook, coupled with the stable contract, positions Maximus for a promising future. This announcement not only boosts investor confidence but also reinforces Maximus’ commitment to providing high-quality services to the American public.
