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Long Beach, California-based Molina Healthcare, Inc. (MOH) provides managed healthcare services to low-income families and individuals under the Medicaid and Medicare programs and through the state insurance marketplaces. With a market cap of around $17 billion, it operates through Medicaid, Medicare, Marketplace, and other segments and has operations spanning almost 20 U.S. states.
Molina Healthcare has underperformed the broader market over the past year. MOH stock has plummeted 17.8% on a YTD basis and 19.3% over the past 52 weeks, lagging behind the S&P 500 Index’s ($SPX) 26.2% gains in 2024 and 32.1% returns over the past year.
Narrowing the focus, MOH stock has also lagged behind the SPDR S&P Health Care Services ETF’s (XHS) 9.4% gains on a YTD basis and 13.1% returns over the past 52 weeks.
Molina Healthcare’s stock prices soared 17.7% after its better-than-expected Q3 earnings release on Oct. 23. The company showcased impressive operating discipline despite the unprecedented short-term dynamics caused by redeterminations. Driven by new contract wins, acquisitions, and growth in its current footprint, Molina’s premium revenue surged 17.6% year-over-year to $9.7 billion. Moreover, its total revenue soared 21% year-over-year to $10.3 billion, exceeding analysts’ expectations. Additionally, the company has also reported a massive improvement in profitability with its adjusted net income increasing by over 18% year-over-year to $347 million and its adjusted EPS of $6.01 surpassed analysts’ consensus estimates marginally, bolstering investors’ confidence.
For the current fiscal year, ending in December, analysts expect MOH to report a 12.3% year-over-year growth in adjusted EPS to $23.44. Moreover, the company has a robust earnings surprise history. It has surpassed analysts' earnings estimates in the past four quarters.
MOH stock has a consensus “Moderate Buy” rating overall. Among the 14 analysts covering the stock, six advise “Strong Buy,” seven recommend “Hold,” and one suggests a “Moderate Sell” rating.
On Nov. 8, Barclays PLC (BCS) analyst Andrew Mok maintained a “Hold” rating with a price target of $372, indicating a 25.3% upside potential from current price levels.
MOH’s mean price target of $367 represents a 23.6% premium to current price levels. Meanwhile, the Street-high price target of $406 suggests a 36.8% upside potential.
