Models

Visible Alpha broker models via S&P Xpressfeed · 1 brokers · 261 line items · freshest revision 2025-08-11.

Federal Profit Rolls Over

This feed is one broker's complete model, not a consensus: every line carries a single contributor, so there is no dispersion to read. What it says is specific. Revenue compounds 3% to 4% a year through FY-2027, but group profit peaks in FY-2026 — U.S. Federal Services operating income falls 13.5% in FY-2027 on a 13.8% step-up in that segment's own SG&A, while Health Services becomes the only segment adding profit dollars.

Federal Services stops paying: operating income down 13.5% on revenue up 3.2%

Source: derived from vendor data.

The segment split is where the whole modelled story sits. U.S. Federal Services is the largest business and keeps growing — but its profit contribution is modelled to peak in FY-2026 and then drop 13.5%, even as its revenue still rises 3.2%. Health Services moves the other way: operating income up 20.5% in FY-2027 on 5.3% revenue growth. Human Services is small and shrinking on both lines.

Source: derived from vendor data.

The quarterly view dates the turn precisely. Federal operating income holds a tight band through FY-2026 and then falls in every modelled FY-2027 quarter; Health Services jumps a step in 1QFY-2027 and holds the higher level. The two lines converge sharply over the eight quarters, which is the single most consequential thing in this model.

The step-up is SG&A inside Federal Services, and it is not matched anywhere else

Source: derived from vendor data.

Federal SG&A grinds down through FY-2026 and then jumps in 1QFY-2027, settling well above the prior run-rate: for the full year it rises 13.8% on revenue up 3.2%. Health Services SG&A does the opposite, falling 4.8%, which is why that segment converts its 5.3% revenue growth into 20.5% profit growth. Whatever the broker is modelling — bid and transition costs, a contract mix shift, reinvestment — it is booked in one segment and not spread across the group.

Revenue keeps compounding; the mix of where it comes from barely moves

Source: derived from vendor data.

Group revenue grows 3.4% in FY-2027. Federal remains much the largest layer and adds the most dollars; Health grows fastest; Human Services shrinks in both years. The reported and organic growth rates only part company in FY-2027, and in opposite directions by segment — Federal's organic rate runs above its reported rate, Health's below.

Source: derived from vendor data.

Reported and organic growth are identical for every segment in FY-2026, so the model carries no acquisition or disposal effect that year. In FY-2027 they separate: Federal's organic rate of 4.6% sits above a reported 3.2%, implying something running off the top line, while Health's reported 5.3% runs ahead of 4.0% organic.

FY-2026 is the profit peak on every group measure

Source: derived from vendor data.

Operating income falls 4.5% and EBITDA 2.4% in FY-2027 against revenue up 3.4% — the compression is entirely a margin story, not a volume one. Operating EPS follows: 7.45 in FY-2025, 7.70 in FY-2026, then 7.13, a 7.4% decline. Group margins say the same thing in one line each.

Source: derived from vendor data.

Gross margin erodes in a straight line across all three years, so the FY-2026 operating peak is made below the gross line, by SG&A discipline that then reverses. Free cash flow margin is the widest swing of the five, from 8.6% to 6.8%.

Cash conversion is the sharper decline: free cash flow down 18.2%

Source: derived from vendor data.

Free cash flow falls 18.2% in FY-2027, more than twice the fall in operating EPS, and operating cash flow falls 15.4% — the working-capital release that flattered FY-2025 and FY-2026 reverses to a modest drag, so cash conversion deteriorates faster than reported profit. Free cash flow per share goes 7.92, then 8.35, then 6.80. On a modelled forward path this is the line that would move a cash-return case, and it is the weakest one here.

The balance sheet is the offset — and it is not a straight line

Source: derived from vendor data.

Gross debt amortises steadily. Net debt does not: it drops through FY-2026, then jumps back in 1QFY-2027 on a negative free-cash quarter before resuming its fall. Net debt / EBITDA still ends at 0.37x against 1.23x in FY-2025, so leverage falls by roughly two-thirds even as earnings decline. That is the one part of the model that improves through FY-2027, and it is what keeps a shrinking profit line from reading as a shrinking business. The total debt line has no value for 1QFY-2027 in this feed; the chart connects across the gap.

What this feed cannot tell you

Three limits matter for how much weight to put on the above. The model is a full one — segments, cash flow and balance sheet, annual and quarterly — but it is one analyst's, and the freshest revision in the feed predates the feed date by close to a year, so the periods the feed labels as historical are themselves forecasts that have not been marked to actuals. Several lines have had individual stale quarters dropped, which is why revenue carries no 1QFY-2027 value. And the model's own year-over-year fields do not tie to its own FY-2027 levels; every change quoted on this page is computed from the levels shown, not from those fields.

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