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Molina Healthcare, Inc. (MOH), headquartered in Long Beach, California, provides managed healthcare services to low-income families and individuals under the Medicaid and Medicare programs and through the state insurance marketplaces. Valued at $16.9 billion by market cap, the company offers health plans in California, Washington, Utah, and Michigan, as well as primary care clinics located in Northern and Southern California.
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 the healthcare plans industry. The key strength of MOH lies in its significant growth in membership, especially in the Medicaid sector, driven by new contract wins and expansions in key states.
Despite its notable strength, MOH slipped 30.4% from its 52-week high of $423.92, achieved on Mar. 27. Over the past three months, MOH stock has declined 14.8%, underperforming the Health Care Select Sector SPDR Fund’s (XLV)9.6% losses during the same time frame.
In the longer term, shares of MOH fell 4.5% over the past six months, outperforming XLV’s six-month losses of 5.3%. However, MOH shares declined 17.6% over the past 52 weeks, underperforming XLV’s 3.2% returns over the last year.
To confirm the bearish trend, MOH has been trading below its 50-day moving average since early October, with slight fluctuations. The stock is trading below its 200-day moving average since late April, with slight fluctuations.
On Oct. 23, MOH reported its Q3 results and its shares closed up more than 17% in the following trading session. Its adjusted EPS of $6.01 beat Wall Street expectations of $5.96. The company’s revenue was $10.3 billion, beating Wall Street forecasts of $10 billion. MOH expects full-year adjusted EPS to be $23.50.
MOH’s rival, Centene Corporation (CNC) shares lagged behind the stock, with 10.6% losses over the past six months. However, CNC has taken the lead over the stock, with 17.1% dip over the past 52 weeks.
Wall Street analysts are moderately bullish on MOH’s prospects. The stock has a consensus “Moderate Buy” rating from the 14 analysts covering it, and the mean price target of $362.43 suggests a potential upside of 22.8% from current price levels.
