Department Operators Maximus and RingCentral Near 52-Week Lows
Among the Zacks Rank #1 (Strong Buy) stocks, government program operator Maximus MMS and internet software services provider RingCentral RNG are drawing attention as they approach their 52-week lows.
Both companies show signs of being oversold due to ongoing tariff concerns affecting market performance.
Maximus: A Potential Buy-the-Dip Opportunity
Currently trading 28% below its 52-week high of $93 per share, Maximus reached a recent low of $63. The significant selloff is primarily driven by the Trump administration’s proposed cuts to various government programs. However, Maximus’s global diversification—operating health and human services programs in countries like Australia, Canada, and the United Kingdom—should help sustain its operations.
In the past five years, Maximus has achieved an impressive 12% growth in EPS, outperforming the S&P 500’s average of 8%. While the company’s bottom line is projected to contract slightly, earnings estimates for fiscal years 2025 and 2026 have increased by over 2% and 5%, respectively, in the last two months.
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RingCentral: Seizing Opportunities Amid Price Declines
RingCentral, catering to diverse communication and collaboration needs, has seen its stock price drop to nearly $20 per share, down from a 52-week high of $42. This decline presents a compelling opportunity, especially as RingCentral has been generating record free cash flow, which is vital for navigating economic challenges and amplifying its AI initiatives.
The company has launched its AI Receptionist (AIR), which acts as a digital employee, allowing customers to maximize efficiency. Additionally, RingCentral’s native contact center AI product, RingCX, has been pivotal in enhancing customer satisfaction and streamlining operations. This year, total sales are anticipated to rise by 5% and are forecasted to increase another 6% in FY26, reaching $2.68 billion. Moreover, FY25 and FY26 EPS is expected to surge over 12%.
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Assessing Valuations
Maximus stock currently trades at 11X forward earnings, while RingCentral is at 5.3X. Both stocks are significantly undervalued compared to the S&P 500’s average of 19.2X forward earnings. Additionally, MMS and RNG trade below the ideal sales multiple threshold of less than 2X.
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Conclusion
Amid tariff-related market fluctuations, Maximus and RingCentral present appealing buy-the-dip prospects. With their stock prices in oversold territory, this may be an opportune moment for investors to consider building positions in anticipation of a future recovery for MMS and RNG shares.
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Maximus, Inc. (MMS): Free Stock Analysis Report
RingCentral, Inc. (RNG): Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
