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Molina Healthcare Inc (MOH)
:MOH
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Molina Healthcare
(NYSE:MOH)72Outperform
Positive Factors
Marketplace Premium Growth
MOH expects to grow Marketplace premiums at 60%, with half expected to be organic growth.
Medicaid Performance
Medicaid MLR did decline sequentially by 30bps, implying that MOH is seeing some improvement.
Negative Factors
Cash Flow Decline
Full-year 2024 cash flow from operations was $644mm, down -61.25% y/y.
Earnings Performance
Reported adjusted EPS of $5.05 missed consensus estimates of $5.84-5.88, with MLR well above consensus estimates.
Future Earnings Guidance
2025 EPS guidance is set well below consensus expectations, and includes costs for new contract implementations.
Molina Healthcare (MOH) vs. S&P 500 (SPY)
Market Cap
$16.81B
Dividend YieldN/A
Average Volume (3M)853.83K
Price to Earnings (P/E)15.0
Beta (1Y)0.29
Revenue Growth19.24%
EPS Growth8.57%
CountryUS
Employees18,000
SectorHealthcare
Sector Strength74
IndustryMedical Service Plans
Share Statistics
EPS (TTM)20.43
Shares Outstanding55,500,000
10 Day Avg. Volume1,094,240
30 Day Avg. Volume853,827
Financial Highlights & Ratios
PEG Ratio1.75
Price to Book (P/B)N/A
Price to Sales (P/S)0.41
Price to Cash Flow (P/CF)-18.80
P/FCF Ratio0.00
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$336.00Price Target Upside9.63% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering11
Molina Healthcare Business Overview & Revenue Model
Company DescriptionMolina Healthcare, Inc. is a managed care company that focuses on providing health plans and related services to individuals and families eligible for government-sponsored programs such as Medicaid and Medicare. With a strong presence across the United States, Molina Healthcare offers a range of healthcare services tailored to meet the needs of low-income families and individuals, ensuring they have access to quality healthcare options.
How the Company Makes MoneyMolina Healthcare generates revenue primarily through government contracts and agreements to provide health insurance plans for Medicaid and Medicare beneficiaries. The company receives capitation payments from state and federal governments, which are fixed amounts per member per month, to manage the healthcare needs of enrolled individuals. Additional revenue streams include premiums from commercial health plans and fees for providing behavioral health services. Molina's earnings are significantly influenced by its ability to efficiently manage healthcare costs while delivering quality services, as well as its participation in various state Medicaid programs and the federal Medicare program.
Molina Healthcare Financial Statement Overview
Summary
Molina Healthcare exhibits strong revenue growth and profitability improvements, supported by efficient cost management. The balance sheet is solid, albeit with a reliance on debt that warrants monitoring. Cash flow performance presents some concerns, particularly in terms of free cash flow generation and conversion of income into cash.Income Statement
Molina Healthcare has demonstrated a robust revenue growth trajectory with a revenue increase of approximately 19.3% from 2023 to 2024. The gross profit margin remains stable as the gross profit equals total revenue, indicating efficient cost management. The net profit margin improved slightly, reflecting enhanced profitability. Both EBIT and EBITDA margins are healthy, showing strong operational efficiency.85
Very Positive
Balance Sheet
The company maintains a moderate debt-to-equity ratio of approximately 0.69, showcasing prudent financial leverage. The return on equity stands at a commendable 26.2% for 2024, highlighting effective equity utilization. However, the equity ratio of 28.8% suggests reliance on debt financing, which could pose risks if not managed carefully.78
Positive
Cash Flow
Free cash flow decreased significantly by 65.5% from 2023 to 2024, which could impact future financial flexibility. The operating cash flow to net income ratio is relatively low at 0.55, indicating potential challenges in converting income to cash flow. Despite this, the company maintains a positive free cash flow to net income ratio of 0.46, reflecting some level of cash generation capability.72
Positive
| Breakdown | |||||
| TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|
| Income Statement | Total Revenue | ||||
| 30.27B | 40.65B | 34.07B | 31.97B | 27.77B | 19.42B | Gross Profit |
| 3.59B | 40.65B | 4.33B | 3.93B | 3.28B | 2.68B | EBIT |
| 1.15B | 1.71B | 1.57B | 1.17B | 1.02B | 1.08B | EBITDA |
| 1.27B | 1.89B | 1.74B | 1.35B | 1.13B | 1.15B | Net Income Common Stockholders |
| 752.00M | 1.18B | 1.09B | 792.00M | 659.00M | 673.00M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | ||||
| 8.99B | 8.99B | 9.11B | 7.50B | 7.64B | 6.03B | Total Assets |
| 15.63B | 15.63B | 14.89B | 12.31B | 12.21B | 9.53B | Total Debt |
| 3.12B | 3.12B | 2.38B | 2.39B | 2.39B | 2.35B | Net Debt |
| -1.54B | -1.54B | -2.46B | -1.61B | -2.05B | -1.80B | Total Liabilities |
| 11.13B | 11.13B | 10.68B | 9.35B | 9.58B | 7.44B | Stockholders Equity |
| 4.50B | 4.50B | 4.21B | 2.96B | 2.63B | 2.10B |
| Cash Flow | Free Cash Flow | ||||
| 1.69B | 544.00M | 1.58B | 682.00M | 2.04B | 1.82B | Operating Cash Flow |
| 1.79B | 644.00M | 1.66B | 773.00M | 2.12B | 1.89B | Investing Cash Flow |
| -1.84B | -464.00M | -744.00M | -790.00M | -1.65B | -400.00M | Financing Cash Flow |
| -251.00M | -347.00M | -58.00M | -441.00M | -183.00M | 225.00M |
Molina Healthcare Technical Analysis
Positive
306.49
Price Trends
294.28
Positive
301.75
Positive
313.96
Negative
Market Momentum
1.19
Negative
56.48
Neutral
84.03
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For MOH, the sentiment is Positive. The current price of 306.49 is above the 20-day moving average (MA) of 289.13, above the 50-day MA of 294.28, and below the 200-day MA of 313.96, indicating a neutral trend. The MACD of 1.19 indicates Negative momentum. The RSI at 56.48 is Neutral, neither overbought nor oversold. The STOCH value of 84.03 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for MOH.
Molina Healthcare Risk Analysis
Molina Healthcare disclosed 41 risk factors in its most recent earnings report. Molina Healthcare reported the most risks in the “Legal & Regulatory” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Molina Healthcare Peers Comparison
Overall Rating
UnderperformOutperform
Sector (49)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
75 Outperform | $28.71B | 9.26 | 12.51% | ― | 5.89% | 27.09% | |
72 Outperform | $16.81B | 15.00 | 26.22% | ― | 19.24% | 8.57% | |
69 Neutral | $85.25B | 25.69 | 0.84% | 1.80% | 25.19% | ― | |
67 Neutral | $31.70B | 26.31 | 7.37% | 1.35% | 10.70% | -49.85% | |
65 Neutral | $434.13B | 30.61 | 14.66% | 1.75% | 8.35% | -35.14% | |
49 Neutral | $7.05B | 0.34 | -55.09% | 2.46% | 25.27% | -3.43% |
* Healthcare Sector Average
Performance Comparison
MOH
Molina Healthcare
306.49
-79.09
-20.51%
CNC
Centene
57.87
-19.53
-25.23%
CI
Cigna
308.86
-19.86
-6.04%
HUM
Humana
262.78
-71.36
-21.36%
UNH
UnitedHealth
474.61
8.75
1.88%
Molina Healthcare Earnings Call Summary
Earnings Call Date: Feb 5, 2025 | % Change Since: -3.32% | Next Earnings Date: Apr 23, 2025
Earnings Call Sentiment Neutral
Molina Healthcare demonstrated strong revenue growth and successful contract acquisitions, positioning themselves positively for future growth. However, the fourth quarter performance fell short of expectations due to higher medical costs, and the loss of the Virginia contract presents challenges. Despite these setbacks, the outlook for 2025 remains optimistic.Highlights
Full Year Premium Revenue Growth
For the full year 2024, Molina reported premium revenue of $38.6 billion, representing 19% year-over-year growth.
Marketplace Segment Outperformance
The Marketplace segment's MCR was 75.4% for the full year, significantly outperforming the long-term target range, allowing reinvestment into 2025 pricing.
Successful Contract Wins and Acquisitions
Molina secured significant new contracts in Georgia, Ohio, Michigan, Massachusetts, and Idaho, adding over $3 billion in incremental revenue. They also closed an acquisition in Connecticut, expecting $1.2 billion in revenue.
Projected 2025 Growth
Molina projects 2025 premium revenue of approximately $42 billion and adjusted earnings per share of at least $24.50, which represents approximately 8% year-over-year growth.
Lowlights
Fourth Quarter Performance Below Expectations
Fourth quarter results for 2024 did not meet expectations, with an adjusted earnings per share of $5.05 and a higher-than-expected consolidated NCR of 90.2% due to medical cost pressures.
Increased Medical Cost Trend
Higher-than-expected medical costs in Medicaid and Medicare segments led to a full year NCR of 89.1%, reflecting industry-wide medical cost pressures.
Loss of Virginia Contract
Molina lost the Virginia Medicaid contract, which is under protest, potentially impacting future revenue.
Company Guidance
In the Molina Healthcare Fourth Quarter 2024 Earnings Conference Call, several metrics and future guidance were discussed. For 2025, Molina projected premium revenue of approximately $42 billion, reflecting 9% growth from 2024, and adjusted earnings per share of at least $24.50, an 8% year-over-year increase. The company also highlighted a consolidated NCR of 88.7% and a pre-tax margin of 4.1%. For Medicaid, an MCR of 89.9% was projected, while Medicare was expected to have an MCR of 89%, reflecting continued utilization pressures. Marketplace segment was anticipated to grow by 60%, achieving an MCR of 79%, supported by mid-single-digit pre-tax margins. The company emphasized significant growth initiatives, including $3 billion incremental revenue from new contracts and acquisitions, and reaffirmed its long-term targets with a clear path to achieve $46 billion in premium revenue by 2026.Molina Healthcare Corporate Events
M&A TransactionsBusiness Operations and Strategy
Molina Healthcare Expands Reach with ConnectiCare Acquisition
Positive
Feb 3, 2025
On February 1, 2025, Molina Healthcare successfully completed its acquisition of ConnectiCare Holding Company, Inc., expanding its reach to approximately 140,000 members across Marketplace, Medicare, and certain commercial products. This strategic acquisition is expected to enhance Molina Healthcare’s market positioning and operational capabilities within the managed healthcare industry.
Business Operations and Strategy
Molina Healthcare Expands with New State Contracts
Positive
Dec 16, 2024
Molina Healthcare has been awarded a contract by the Michigan Department of Health and Human Services to provide a Highly Integrated Dual Eligible Special Needs Plan across Michigan’s lower peninsula, expanding its current service reach. Additionally, Molina is set to receive contracts from the Idaho Department of Health and Welfare to manage the state’s Medicare Medicaid Coordinated Plan and Idaho Medicaid Plus Plan, reinforcing its role in serving dual eligible populations in Idaho.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.