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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. Valued at a market cap of $17.1 billion, the company participates exclusively in government-sponsored healthcare programs.
Companies worth $10 billion or more are typically classified as “large-cap stocks,” and Molina fits the label perfectly, with its market cap exceeding this threshold, underscoring its size, influence, and dominance within the healthcare plans industry. The company operates with a cost-efficient business model, focusing on streamlined healthcare delivery to maintain strong profit margins. With a broad geographic presence across multiple U.S. states, the company continues to expand its reach while leveraging strategic acquisitions and operational efficiency to strengthen its market position.
Despite its notable strength, this healthcare company has dipped 26.2% from its 52-week high of $423.92, reached on Mar. 27, 2024. It has gained 5.9% over the past three months, lagging behind the SPDR S&P Health Care Services ETF’s (XHS) 8.7% uptick over the same time frame.
In the longer term, MOH has fallen 24.6% over the past 52 weeks, considerably underperforming XHS’ 7.3% rise over the same time frame. Moreover, on a YTD basis, shares of MOH are up 7.4%, compared to XHS’ 9.5% return.
To confirm its recent bullish trend, MOH has been trading above its 50-day moving average since late February. However, it has remained below its 200-day moving average since late April, with some fluctuations.
On Feb. 5, MOH released its mixed Q4 results, and its stock plummeted 10.1% the following day. While adjusted earnings rose 15.3% year-over-year to $5.05 per share, it fell 13.1% short of Wall Street expectations. Rising medical care costs, lower investment income, and weaker-than-expected membership growth further weighed on investor sentiment and led to its earnings miss. However, on the brighter side, higher premium revenues and new contract acquisitions resulted in a 16% increase in its revenue to $10.5 billion, which met analyst estimates.
For fiscal 2025, MOH expects adjusted EPS to be at least $24.50, representing an approximately 8% growth compared to the previous year.
MOH has lagged behind its rival, UnitedHealth Group Incorporated’s (UNH) 5.4% gain over the past 52 weeks but has outpaced UNH’s 2.1% rise on a YTD basis.
Despite MOH’s recent underperformance relative to its industry peers, analysts remain moderately optimistic about its prospects. The stock has a consensus rating of “Moderate Buy” from the 14 analysts covering it, and the mean price target of $343.46 suggests a nearly 9.9% premium to its current levels.
