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Maximus, Inc. (MMS) Intrinsic Value

DCF-based fair value calculation with Bear, Base, and Bull scenarios

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Maximus, Inc. (MMS)

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Intrinsic Value (DCF)

Current$98.42
→
Intrinsic$117.05
+19%
$73.46$117.05$199.89
Market implies 9% growth for 5 years
MMS shows 19% potential upside using 12% growth — reasonable if fundamentals hold.
At $98, the market prices in 9% annual cash flow growth — a moderate expectation aligned with historical trends (12%).
Range: Bear $73 → Bull $200. Current price implies expectations below the base case, but well above the bear case.
Discount ↓Growth →8%10%12%14%
8%$144$159$174$191
10%$96$106$117$128
12%$70$77$85$94
14%$53$59$65$72

Bull Case

  • Bull case ($200) offers 103% upside at 15% growth, 9% discount
  • 16% margin of safety vs. base case estimate
  • Market-implied growth (9%) ≤ historical CAGR (12%)

Bear Case

  • Bear case ($73) implies 25% downside at 10% growth, 12% discount
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5-Year Free Cash Flow Projection

Year 1$411.65M
Year 2$462.79M
Year 3$520.28M
Year 4$584.92M
Year 5$657.59M
Terminal$9.68B

📐 Model Inputs

Growth Rate12.4%5Y CAGR (cascade: 5Y→3Y→TTM)
Discount Rate10.0%WACC estimate
Terminal Growth3.0%Perpetuity rate
Base Free Cash Flow$366.16MTTM actual
Bear g×0.8, r+2%
Base Historical CAGR
Bull g×1.2, r−1.5%
ℹ️

DCF estimates based on historical growth rates extrapolated forward. See FAQ below for full methodology.

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Frequently Asked Questions

Is MMS stock undervalued or overvalued?
🟢 UNDERVALUED

MMS trades at $98.42 vs. our DCF-derived intrinsic value of $117.05, implying +31% upside. At a 10.0% WACC and 12.4% projected FCF growth, the market appears to be underpricing the present value of MMS's future cash flows. The bear case ($75.40) still suggests upside, providing margin of safety.

What is MMS's intrinsic value?

Using a 5-year DCF model: Base FCF of $366M, projected at 12.4% 5Y CAGR (best of revenue, EPS, or FCF growth), discounted at 10.0% WACC, with 3.0% terminal growth. Terminal value calculated via Gordon Growth Model: TV = FCF₅ × (1+g) / (WACC−g). After deducting $1.18B net debt and dividing by 0.06B shares: Bear $75.40 | Base $117.05 | Bull $174.96. Current price $98.42 implies +31% to base case.

How is MMS's fair value calculated?

DCF Methodology:

① Project FCF years 1-5 using 12.4% growth derived from 5-year historical CAGR (best of revenue, EPS, or FCF growth, with 8% floor and 25% cap).

② Calculate terminal value at year 5 using perpetuity growth model with g=3.0%.

③ Discount all cash flows to PV using WACC=10.0%.

④ Sum PV of explicit period + PV of terminal value = Enterprise Value ($7.96B).

⑤ Subtract net debt, divide by shares outstanding.

Sensitivity analysis available above—adjust WACC ±2% or growth ±3% to stress-test the valuation. Implied EV/FCF multiple: 21.7x.