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With a market cap of around $20.6 billion, California-based Molina Healthcare, Inc. (MOH) delivers managed healthcare services through Medicaid, Medicare, and state insurance marketplaces. The company is a multi-state managed care organization focused exclusively on government-sponsored healthcare programs like Medicaid and the State Children's Health Insurance Program (SCHIP), dedicated to serving low-income individuals and families.
Companies worth $10 billion or more are generally described as “large-cap stocks,” and MOH perfectly fits that description, with its market cap exceeding this mark, underscoring its size, influence, and dominance within its industry.
While the healthcare company has slipped by almost 17.1% from its 52-week high of $423.92 achieved on Mar. 27, over the past three months, the stock has staged an impressive performance, rallying almost 14.2%, overshadowing the Dow Jones Industrials Average’s ($DOWI) 7.5% gain during the same time frame.
However, in the longer term, MOH stock is up roughly 5.4% over the past year, significantly lagging behind the DOWI 22.1% gain. Plus, in 2024, the stock slipped 2.7%, compared to DOWI’s 11.6% return on a YTD basis.
Yet, the stock has been trading above its 50-day moving average since mid-July, indicating a bullish price trend.
Despite the company’s weak price action over the past year, Molina Healthcare's recent outperformance is fueled by stellar financial success in the first half of fiscal 2024, riding the wave of an aging U.S. population that is increasingly seeking its comprehensive Medicare plans. Plus, the company dropped its Q2 earnings results on Jul. 24, which blew past Wall Street’s top and bottom-line estimates, triggering a notable 12.3% surge in the subsequent session.
During the quarter, the company achieved a remarkable premium revenue of around $9.4 billion, reflecting a solid 17% year-over-year growth. This impressive rise is fueled by new contract wins, strategic acquisitions, and expansion within its existing markets despite the challenges posed by Medicaid redeterminations.
Yet, In the competitive arena of healthcare, Centene Corporation (CNC) has taken the lead over MOH, delivering 11.1% returns over the past year and a 1.9% gain on a YTD basis.
Wall Street is cautiously bullish about MOH’s prospects. The stock has earned a consensus “Moderate Buy” rating on Wall Street from the 13 in coverage, and the mean price target of $372.36 suggests a potential upside of only 6% from current price levels.
On the date of publication, Anushka Mukherjee did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
