Molina Healthcare (MOH) AI Stock Analysis

• Market Cap: $9.86B
• Dividend Yield: N/A
• Average Volume (3M): 1.39M
• Price to Earnings (P/E): 9.0
• Beta (1Y): -0.02
• Revenue Growth: 16.12%
• EPS Growth: 10.99%
• Country: US
• Employees: 18,000
• Sector: Healthcare
• Sector Strength: 45
• Industry: Medical - Healthcare Plans
• EPS (TTM): 5.48
• Shares Outstanding: 54,200,000
• 10 Day Avg. Volume: 1,160,856
• 30 Day Avg. Volume: 1,385,427
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): N/A
• P/FCF Ratio: N/A
• Enterprise Value/Market Cap: 1.98
• Enterprise Value/Revenue: 0.45
• Enterprise Value/Gross Profit: 4.12
• Enterprise Value/Ebitda: 10.55
• 1Y Price Target: $206.91
• Price Target Upside: 8.49% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 15

• Rating: 73 Outperform
• Price Target: $203.00 ▲(6.44% Upside)

Molina Healthcare's overall stock score reflects strong financial performance and attractive valuation, offset by technical challenges and negative sentiment from the latest earnings call. The company's robust revenue growth and profitability are significant strengths, but liquidity concerns and elevated medical costs pose risks. The stock's undervaluation presents an opportunity, though investors should be cautious of the cost pressures and revised earnings guidance.

Positive Factors

Revenue Growth

Consistent revenue growth demonstrates Molina's ability to expand its market reach and maintain strong relationships with government programs, ensuring a steady flow of income.

Long-term Growth Prospects

Molina's focus on strategic growth and recent RFP wins positions it well for future expansion, supporting long-term revenue targets and market presence.

G&A Efficiency

Efficient management of general and administrative expenses enhances profitability and allows for reinvestment into growth initiatives, strengthening Molina's competitive position.

Negative Factors

Medical Cost Pressures

Rising medical costs, including behavioral health and high-cost drugs, strain margins and may necessitate price adjustments or cost-cutting measures, impacting long-term profitability.

Earnings Guidance Revision

The downward revision in earnings guidance reflects ongoing cost pressures and challenges in the marketplace, potentially affecting investor confidence and future earnings growth.

Marketplace Challenges

Increased utilization in the Marketplace segment suggests potential pricing or service model issues, which could affect margins and require strategic adjustments to maintain competitiveness.

Molina Healthcare Business Overview & Revenue Model

Company Description

Molina Healthcare, Inc. provides managed health care services to low-income families and individuals under the Medicaid and Medicare programs and through the state insurance marketplaces. It operates in four segments, Medicaid, Medicare, Marketplace, and Other. As of December 31, 2021, the company served the company served approximately 5.2 million members eligible for Medicaid, Medicare, and other government-sponsored healthcare programs in 18 states. The company was founded in 1980 and is headquartered in Long Beach, California.

How the Company Makes Money

Molina Healthcare generates revenue primarily through its Health Plans segment, which receives funding from state and federal government programs. The company contracts with state Medicaid programs to provide managed care services, receiving capitation payments based on the number of enrolled members. Additionally, Molina participates in Medicare Advantage programs, earning premium payments for providing healthcare services to Medicare beneficiaries. Key revenue streams include premiums from Medicaid and Medicare plans, as well as supplemental revenue from additional services such as pharmacy benefits. The company also engages in partnerships with healthcare providers and community organizations to enhance care delivery, which can lead to improved member enrollment and retention, further contributing to its earnings.

Molina Healthcare Financial Statement Overview

Summary

Molina Healthcare shows robust financial performance with strong revenue growth and profitability metrics. The balance sheet is solid with manageable leverage and strong return on equity. However, liquidity management needs attention, and there is room for improvement in operating cash flow generation.

Income Statement

Molina Healthcare demonstrates strong revenue growth, with a 7% increase from the previous year in the TTM period. The company maintains solid profitability metrics, including a gross profit margin of 5.3% and a net profit margin of 2.6% for the TTM. While EBIT and EBITDA margins remain robust at 3.8% and 4.3% respectively, there is a slight decline in EBIT compared to the previous year, suggesting potential cost management areas to address.

Balance Sheet

The balance sheet reflects a healthy equity position with an equity ratio of 28.4% in the TTM period, indicating a solid financial footing. The debt-to-equity ratio stands at 0.77, suggesting manageable leverage levels. Return on equity is strong at 24.5%, indicating efficient use of equity capital. However, the decrease in cash and equivalents compared to previous periods highlights a potential liquidity area to monitor.

Cash Flow

The cash flow statement reveals a decline in operating cash flow compared to the previous year, impacting the operating cash flow to net income ratio, which stands at 0.47 in the TTM. Free cash flow to net income ratio is healthy at 0.38, though free cash flow has decreased year-over-year. The company needs to focus on enhancing operating cash flow to maintain financial flexibility.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	43.41B	40.65B	34.07B	31.97B	27.77B	19.42B
Gross Profit	4.75B	4.74B	4.33B	3.93B	3.28B	2.68B
EBITDA	1.85B	1.89B	1.74B	1.35B	1.13B	1.15B
Net Income	1.13B	1.18B	1.09B	792.00M	659.00M	673.00M
Balance Sheet
Total Assets	16.21B	15.63B	14.89B	12.31B	12.21B	9.53B
Cash, Cash Equivalents and Short-Term Investments	8.81B	8.99B	9.11B	7.50B	7.64B	6.03B
Total Debt	3.56B	3.12B	2.38B	2.39B	2.39B	2.35B
Total Liabilities	11.61B	11.13B	10.68B	9.35B	9.58B	7.44B
Stockholders Equity	4.60B	4.50B	4.21B	2.96B	2.63B	2.10B
Cash Flow
Free Cash Flow	427.00M	544.00M	1.58B	682.00M	2.04B	1.82B
Operating Cash Flow	537.00M	644.00M	1.66B	773.00M	2.12B	1.89B
Investing Cash Flow	-24.00M	-464.00M	-744.00M	-790.00M	-1.65B	-400.00M
Financing Cash Flow	-339.00M	-347.00M	-58.00M	-441.00M	-183.00M	217.00M

Molina Healthcare Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 190.71
• 50DMA: Positive
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

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 190.71 is above the 20-day moving average (MA) of 179.09, above the 50-day MA of 172.90, and below the 200-day MA of 269.69, indicating a neutral trend. The MACD of 1.30 indicates Negative momentum. The RSI at 60.49 is Neutral, neither overbought nor oversold. The STOCH value of 52.76 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for MOH.

Molina Healthcare Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
CVS	77 Outperform	96.87B	21.34	5.86%	3.48%	6.27%	-36.28%
MOH	73 Outperform	$9.86B	9.00	23.93%	―	16.12%	10.99%
CI	73 Outperform	77.79B	15.84	12.48%	2.03%	20.93%	43.98%
ELV	71 Outperform	73.49B	13.78	12.26%	2.07%	10.21%	-17.79%
CNC	70 Outperform	17.02B	8.57	7.49%	―	12.96%	-23.25%
HUM	70 Outperform	31.51B	19.83	8.64%	1.35%	9.88%	-7.25%
Sector *	51 Neutral	$7.86B	-0.30	-43.30%	2.27%	22.53%	-2.21%