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Molina Healthcare (MOH)
NYSE:MOH

Molina Healthcare (MOH) AI Stock Analysis

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Molina Healthcare

(NYSE:MOH)

Rating:76Outperform
Price Target:
$350.00
▲(19.61%Upside)
Molina Healthcare's strong financial performance and strategic growth initiatives are the most significant factors driving the score. Technical analysis indicates mixed signals, while valuation suggests the stock is fairly valued. Despite challenges in certain segments, the company's strategic planning supports a positive outlook.
Positive Factors
Earnings
MOH reported Q1 results that beat on adjusted EPS by 2% and reiterated its FY25 adjusted EPS guide.
Medicaid Performance
Medicaid rates are coming in better than expected, with MOH raising its guide for rate increases.
Revenue Growth
Revenues were 2% above consensus, driven by better Medicaid and Exchange revenues.
Negative Factors
Earnings Guidance
2025 EPS guidance is set well below consensus expectations, and includes costs for new contract implementations.
Marketplace MLR
Marketplace MLR was significantly worse than consensus, primarily due to prior year adjustments and acquisitions.
Medicare Advantage
Medicare Advantage revenues lagged, coming in 4.5% below consensus despite better membership numbers.

Molina Healthcare (MOH) vs. SPDR S&P 500 ETF (SPY)

Molina Healthcare Business Overview & Revenue Model

Company DescriptionMolina Healthcare, Inc. is a managed care organization focused on providing health care services to individuals and families receiving government-sponsored health insurance. Headquartered in Long Beach, California, Molina Healthcare operates in multiple states across the U.S., offering a range of services including Medicaid, Medicare, and Marketplace insurance plans. The company aims to deliver quality health care to low-income individuals and those with complex health needs through a network of hospitals, physicians, and other healthcare providers.
How the Company Makes MoneyMolina Healthcare generates revenue primarily through premium payments received for the health insurance plans it provides under government programs such as Medicaid and Medicare. The company contracts with state governments to manage care for Medicaid beneficiaries, receiving a fixed amount per member per month, which is known as a capitation payment. For Medicare, Molina offers plans under the Medicare Advantage program, receiving payments from the federal government. Additionally, Molina participates in the Health Insurance Marketplace, offering plans to individuals and families who do not qualify for Medicaid or Medicare. Key revenue streams include the capitation payments for Medicaid and Medicare members, as well as premium payments from Marketplace members. Molina's profitability is influenced by its ability to manage medical costs effectively and maintain a robust provider network.

Molina Healthcare Key Performance Indicators (KPIs)

Any
Any
Total Members
Total Members
Tracks the total number of individuals enrolled in Molina Healthcare plans, indicating market reach and potential revenue base.
Chart InsightsMolina Healthcare's total membership has shown a strong recovery in 2024, driven by strategic contract wins and acquisitions, despite a dip in late 2023. The recent earnings call highlights a robust growth trajectory with new contracts in key states and a projected 9% premium revenue increase for 2025. However, the loss of the Virginia contract and higher medical costs pose challenges. The company's focus on expanding its Marketplace segment, expected to grow by 60%, underscores its strategy to diversify and strengthen its membership base.
Data provided by:Main Street Data

Molina Healthcare Earnings Call Summary

Earnings Call Date:Apr 23, 2025
(Q1-2025)
|
% Change Since: -11.86%|
Next Earnings Date:Jul 23, 2025
Earnings Call Sentiment Neutral
Molina Healthcare exhibited strong financial performance with substantial Medicaid rate updates and successful RFP wins. However, challenges in the Marketplace segment and the loss of the Virginia contract posed some concerns. The company's strategic growth initiatives and management of G&A costs are positive indicators for future performance.
Q1-2025 Updates
Positive Updates
Strong Financial Performance
Molina Healthcare reported adjusted earnings per share of $6.08 on $10.6 billion of premium revenue for the first quarter of 2025, supported by strong operating metrics across all lines of business.
Medicaid Rate Updates
Molina received $150 million in Medicaid rate updates, increasing the full-year rate update from 4.5% to 5%.
Successful RFP Wins
Molina successfully defended its Medicaid position in Nevada and won a dual eligible contract in Illinois, projecting $800 million in incremental annual premium revenue.
Increased Embedded Earnings
Embedded earnings increased from approximately $7.75 to $8.65 per share, representing about one-third of current EPS.
Strong G&A Management
The G&A ratio improved, with expectations set at 6.9% for the full year, showing operational efficiency.
Negative Updates
Higher Marketplace MCR
Marketplace first-quarter MCR was 81.7%, higher than expected due to prior year items related to risk adjustment and member reconciliation.
Loss of Virginia Contract
The mid-year loss of the Virginia Medicaid contract is expected to impact earnings by $0.40 per share.
Exchange Member Reconciliation Issues
Member reconciliation issues resulted in the removal of members not authorized to be in the plan, impacting revenue and MCR.
Company Guidance
During Molina Healthcare's first quarter 2025 earnings call, the company reaffirmed its full-year guidance, projecting approximately $42 billion in premium revenue and at least $24.50 in earnings per share, representing an 8% year-over-year growth. The first quarter results included adjusted earnings per share of $6.08 on $10.6 billion of premium revenue. The consolidated medical care ratio (MCR) was reported at 89.2%, reflecting strong medical cost management. Specific MCRs for Medicaid, Medicare, and Marketplace segments were 90.3%, 88.3%, and 81.7% respectively. The company also highlighted its strategic growth initiatives, including successful RFP wins and acquisitions, which are expected to contribute significantly to future revenue targets of $46 billion in 2026 and at least $52 billion by 2027. Molina's embedded earnings increased from $7.75 to $8.65 per share, supporting its long-term EPS growth target of 13% to 15%. Furthermore, the company noted that full-year Medicaid rates are projected to be slightly higher, with a cautious outlook on medical cost trends.

Molina Healthcare Financial Statement Overview

Summary
Molina Healthcare exhibits strong financial performance with consistent revenue and profit growth, effective leverage management, and robust cash flow generation. The company is well-positioned within the healthcare plans industry, though attention to cash flow volatility will be crucial for sustaining its growth trajectory.
Income Statement
85
Very Positive
Molina Healthcare has shown strong revenue growth with a TTM (Trailing-Twelve-Months) increase from the previous year. The company maintains a solid gross profit margin and net profit margin indicating effective cost management and profitability. EBIT and EBITDA margins are stable, illustrating operational efficiency.
Balance Sheet
78
Positive
The balance sheet reflects a healthy equity ratio, showing that a substantial portion of the company's assets are financed by shareholders' equity. The debt-to-equity ratio is moderate, suggesting a balanced financial leverage. Return on equity is strong, highlighting effective use of equity to generate profits.
Cash Flow
82
Very Positive
The cash flow statement indicates a robust operating cash flow to net income ratio, reflecting good cash generation from operations. Free cash flow is consistently positive, supporting the company's ability to reinvest and grow. However, fluctuations in free cash flow growth rate suggest potential volatility in cash management.
Breakdown
TTMDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income StatementTotal Revenue
41.84B40.65B34.07B31.97B27.77B19.42B
Gross Profit
4.78B4.74B4.33B3.93B3.28B2.68B
EBIT
1.71B1.71B1.57B1.17B1.02B1.08B
EBITDA
1.90B1.89B1.74B1.35B1.13B1.15B
Net Income Common Stockholders
1.18B1.18B1.09B792.00M659.00M673.00M
Balance SheetCash, Cash Equivalents and Short-Term Investments
9.29B8.99B9.11B7.50B7.64B6.03B
Total Assets
16.39B15.63B14.89B12.31B12.21B9.53B
Total Debt
3.77B3.12B2.38B2.39B2.39B2.35B
Net Debt
-1.09B-1.54B-2.46B-1.61B-2.05B-1.80B
Total Liabilities
12.08B11.13B10.68B9.35B9.58B7.44B
Stockholders Equity
4.31B4.50B4.21B2.96B2.63B2.10B
Cash FlowFree Cash Flow
525.00M544.00M1.58B682.00M2.04B1.82B
Operating Cash Flow
620.00M644.00M1.66B773.00M2.12B1.89B
Investing Cash Flow
-99.00M-464.00M-744.00M-790.00M-1.65B-400.00M
Financing Cash Flow
-138.00M-347.00M-58.00M-441.00M-183.00M225.00M

Molina Healthcare Technical Analysis

Technical Analysis Sentiment
Negative
Last Price292.61
Price Trends
50DMA
321.11
Negative
100DMA
311.18
Negative
200DMA
315.09
Negative
Market Momentum
MACD
-7.22
Positive
RSI
36.76
Neutral
STOCH
11.56
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For MOH, the sentiment is Negative. The current price of 292.61 is below the 20-day moving average (MA) of 310.92, below the 50-day MA of 321.11, and below the 200-day MA of 315.09, indicating a bearish trend. The MACD of -7.22 indicates Positive momentum. The RSI at 36.76 is Neutral, neither overbought nor oversold. The STOCH value of 11.56 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative 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 2 New Risks
1.
Restrictive covenants in our debt instruments may restrict our ability to pursue our business strategies. Q4, 2024
2.
Changes in tax laws or regulations that are applied adversely to us or our customers may materially adversely affect our business, prospects, financial condition and operating results. Q4, 2024

Molina Healthcare Peers Comparison

Overall Rating
UnderperformOutperform
Sector (53)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
THTHC
80
Outperform
$15.96B11.2338.12%-1.79%-41.85%
CNCNC
77
Outperform
$27.55B8.1812.59%8.85%33.30%
MOMOH
76
Outperform
$15.91B14.1326.72%16.71%12.23%
UHUHS
70
Outperform
$12.16B10.6018.35%0.42%9.73%51.87%
DVDVA
64
Neutral
$10.27B13.54260.92%5.11%14.28%
53
Neutral
$5.25B3.24-45.38%2.81%16.79%-0.06%
41
Neutral
$3.12B-30.57%-147.80%
* Healthcare Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
MOH
Molina Healthcare
293.56
-19.84
-6.33%
CNC
Centene
54.84
-15.60
-22.15%
DVA
DaVita
137.74
-6.10
-4.24%
THC
Tenet Healthcare
171.84
37.16
27.59%
UHS
Universal Health
189.09
0.51
0.27%
MLTX
MoonLake Immunotherapeutics
48.83
6.39
15.06%

Molina Healthcare Corporate Events

Executive/Board ChangesShareholder Meetings
Molina Healthcare’s Annual Meeting Highlights Key Decisions
Neutral
May 1, 2025

On April 30, 2025, Molina Healthcare held its Annual Meeting where 85.6% of the company’s outstanding shares were represented. During the meeting, stockholders voted on several proposals, including the election of nine directors, approval of executive compensation, ratification of Ernst & Young LLP as the independent auditor, approval of the 2025 Equity Incentive Plan, and a stockholder proposal regarding special meetings. Key outcomes included the election of directors and the approval of the equity plan, while the executive compensation proposal faced significant opposition.

Business Operations and Strategy
Molina Healthcare Wins Illinois D-SNP Contract
Positive
Mar 18, 2025

On March 18, 2025, Molina Healthcare announced that its subsidiary, Molina Healthcare of Illinois, was awarded a contract by the Illinois Department of Healthcare and Family Services to provide a Fully Integrated Dual Eligible Special Needs Plan (D-SNP). This new contract, set to replace the State’s Medicare-Medicaid Alignment Initiative demonstration program serving approximately 73,000 beneficiaries, is expected to commence on January 1, 2026, with an initial term of four years and potential extensions up to ten years.

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.