It's common for many investors, especially those who are inexperienced, to buy shares in companies with a good story even if these companies are loss-making. Sometimes these stories can cloud the minds of investors, leading them to invest with their emotions rather than on the merit of good company fundamentals. While a well funded company may sustain losses for years, it will need to generate a profit eventually, or else investors will move on and the company will wither away. So if this idea of high risk and high reward doesn't suit, you might be more interested in profitable, growing companies, like Maximus (NYSE:MMS). While this doesn't necessarily speak to whether it's undervalued, the profitability of the business is enough to warrant some appreciation - especially if its growing. This technology could replace computers: discover the 20 stocks are working to make quantum computing a reality. Maximus' Improving Profits Even with very modest growth rates, a company will usually do well if it improves earnings per share (EPS) year after year. So it's no surprise that some investors are more inclined to invest in profitable businesses. To the delight of shareholders, Maximus' EPS soared from US$3.04 to US$5.02, over the last year. That's a impressive gain of 65%. Top-line growth is a great indicator that growth is sustainable, and combined with a high earnings before interest and taxation (EBIT) margin, it's a great way for a company to maintain a competitive advantage in the market. Maximus maintained stable EBIT margins over the last year, all while growing revenue 8.0% to US$5.4b. That's encouraging news for the company! You can take a look at the company's revenue and earnings growth trend, in the chart below. To see the actual numbers, click on the chart.NYSE:MMS Earnings and Revenue History May 8th 2025 See our latest analysis for Maximus Fortunately, we've got access to analyst forecasts of Maximus' future profits. You can do your own forecasts without looking, or you can take a peek at what the professionals are predicting. Are Maximus Insiders Aligned With All Shareholders? It should give investors a sense of security owning shares in a company if insiders also own shares, creating a close alignment their interests. So it is good to see that Maximus insiders have a significant amount of capital invested in the stock. Indeed, they hold US$46m worth of its stock. That shows significant buy-in, and may indicate conviction in the business strategy. Despite being just 1.2% of the company, the value of that investment is enough to show insiders have plenty riding on the venture. Story Continues Is Maximus Worth Keeping An Eye On? If you believe that share price follows earnings per share you should definitely be delving further into Maximus' strong EPS growth. This EPS growth rate is something the company should be proud of, and so it's no surprise that insiders are holding on to a considerable chunk of shares. Fast growth and confident insiders should be enough to warrant further research, so it would seem that it's a good stock to follow. We don't want to rain on the parade too much, but we did also find 2 warning signs for Maximus that you need to be mindful of. While opting for stocks without growing earnings and absent insider buying can yield results, for investors valuing these key metrics, here is a carefully selected list of companies in the US with promising growth potential and insider confidence. Please note the insider transactions discussed in this article refer to reportable transactions in the relevant jurisdiction. Have feedback on this article? Concerned about the content?Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com. This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. View Comments
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