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Why You Should Hold Molina Healthcare (MOH) in Your Portfolio
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Molina Healthcare, Inc. (MOH - Free Report) is currently aided by a well-performing Government business, thanks to increasing premiums and numerous contract wins. The pursuit of buyouts and a solid financial position are other tailwinds for the stock.
Zacks Rank & Price Rally
Molina Healthcare carries a Zacks Rank #3 (Hold) currently.
The stock has gained 6.7% in a year compared with the industry’s 8.3% growth. The Zacks Medical sector and the S&P 500 composite have declined 9.9% and 13.2%, respectively, in the said time frame.
Image Source: Zacks Investment Research
Favorable Style Score
MOH carries an impressive VGM Score of A. Here V stands for Value, G for Growth and M for Momentum and the score is a weighted combination of all three factors.
Robust Growth Prospects
The Zacks Consensus Estimate for Molina Healthcare’s 2023 earnings is pegged at $19.71 per share, indicating a 10.8% increase from the 2022 estimate. The same for revenues stands at $33.2 billion, implying 5% growth from the 2022 estimate.
The expected long-term earnings growth rate is pegged at 19.6%, better than the industry’s average of 15.3%.
Impressive Earnings Surprise History
MOH boasts an impressive surprise record. Its earnings outpaced estimates in each of the trailing four quarters, the average being 3.24%.
Solid Return on Equity
Molina Healthcare’s efficiency in utilizing shareholders’ funds can be substantiated by its return on equity of 34.6% as of Sep 30, 2022, which remains higher than the industry’s average of 24.1%.
Business Tailwinds
Revenues of Molina Healthcare continue to benefit from a well-performing Government business that fetches higher premiums to the health insurer. The business enables it to devise affordable Medicare and Medicare plans based on which it wins several contracts from time to time. Such contract wins result in a growing customer base for MOH. Additionally, an aging U.S. population is likely to sustain solid demand for its Medicare plans.
One of the recent contract wins of Molina Healthcare remains that of the Medi-Cal contracts received from the California Department of Health Care Services in January 2023. The contracts will commence from the beginning of 2024 and are likely to double its California Medicaid revenues as well as boost the customer base in 2024.
A series of acquisitions made over the years have expanded the business portfolio, diversified revenue streams and solidified the geographical footprint of MOH. It also resorts to tactical cost-cutting measures, that aid margins.
A strong financial standing remains an additional tailwind for Molina Healthcare. The health insurer has strong cash reserves in place that remains sufficient to service debt obligations and bring down interest expenses.
MOH has adequate cash-generating abilities through which it can undertake uninterrupted business investments.
Stocks to Consider
Some better-ranked stocks in the Medical space are Lantheus Holdings, Inc. (LNTH - Free Report) , United Therapeutics Corporation (UTHR - Free Report) and IDEXX Laboratories, Inc. (IDXX - Free Report) . While Lantheus and United Therapeutics sport a Zacks Rank #1 (Strong Buy), IDEXX Laboratories carries a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
Lantheus’ earnings surpassed the Zacks Consensus Estimate in each of the last four quarters, the average beat being 51.09%. The Zacks Consensus Estimate for LNTH’s 2023 earnings suggests an improvement of 10%, while the same for revenues indicates growth of 11.9% from the respective 2022 estimates.
The Zacks Consensus Estimate for LNTH’s 2023 earnings has moved 0.2% north in the past 60 days. Shares of Lantheus have soared 108.6% in a year.
United Therapeutics’ earnings surpassed estimates in two of the last four quarters and missed the mark twice, the average being 7.24%. The Zacks Consensus Estimate for UTHR’s 2023 earnings indicates a 13.2% rise, while the same for revenues suggests an improvement of 12.6% from the respective 2022 estimates.
The consensus mark for UTHR’s 2023 earnings has moved 0.3% north in the past 30 days. Shares of United Therapeutics have gained 27.3% in a year.
IDEXX Laboratories’ earnings outpaced estimates in each of the trailing four quarters, the average being 5.19%. The Zacks Consensus Estimate for IDXX’s 2023 earnings indicates a 19.3% rise, while the same for revenues suggests an improvement of 7% from the respective 2022 estimates.
The consensus mark for IDXX’s 2023 earnings has moved up 0.3% in the past seven days. Shares of IDEXX Laboratories have lost 7.5% in a year.
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Why You Should Hold Molina Healthcare (MOH) in Your Portfolio
Molina Healthcare, Inc. (MOH - Free Report) is currently aided by a well-performing Government business, thanks to increasing premiums and numerous contract wins. The pursuit of buyouts and a solid financial position are other tailwinds for the stock.
Zacks Rank & Price Rally
Molina Healthcare carries a Zacks Rank #3 (Hold) currently.
The stock has gained 6.7% in a year compared with the industry’s 8.3% growth. The Zacks Medical sector and the S&P 500 composite have declined 9.9% and 13.2%, respectively, in the said time frame.
Image Source: Zacks Investment Research
Favorable Style Score
MOH carries an impressive VGM Score of A. Here V stands for Value, G for Growth and M for Momentum and the score is a weighted combination of all three factors.
Robust Growth Prospects
The Zacks Consensus Estimate for Molina Healthcare’s 2023 earnings is pegged at $19.71 per share, indicating a 10.8% increase from the 2022 estimate. The same for revenues stands at $33.2 billion, implying 5% growth from the 2022 estimate.
The expected long-term earnings growth rate is pegged at 19.6%, better than the industry’s average of 15.3%.
Impressive Earnings Surprise History
MOH boasts an impressive surprise record. Its earnings outpaced estimates in each of the trailing four quarters, the average being 3.24%.
Solid Return on Equity
Molina Healthcare’s efficiency in utilizing shareholders’ funds can be substantiated by its return on equity of 34.6% as of Sep 30, 2022, which remains higher than the industry’s average of 24.1%.
Business Tailwinds
Revenues of Molina Healthcare continue to benefit from a well-performing Government business that fetches higher premiums to the health insurer. The business enables it to devise affordable Medicare and Medicare plans based on which it wins several contracts from time to time. Such contract wins result in a growing customer base for MOH. Additionally, an aging U.S. population is likely to sustain solid demand for its Medicare plans.
One of the recent contract wins of Molina Healthcare remains that of the Medi-Cal contracts received from the California Department of Health Care Services in January 2023. The contracts will commence from the beginning of 2024 and are likely to double its California Medicaid revenues as well as boost the customer base in 2024.
A series of acquisitions made over the years have expanded the business portfolio, diversified revenue streams and solidified the geographical footprint of MOH. It also resorts to tactical cost-cutting measures, that aid margins.
A strong financial standing remains an additional tailwind for Molina Healthcare. The health insurer has strong cash reserves in place that remains sufficient to service debt obligations and bring down interest expenses.
MOH has adequate cash-generating abilities through which it can undertake uninterrupted business investments.
Stocks to Consider
Some better-ranked stocks in the Medical space are Lantheus Holdings, Inc. (LNTH - Free Report) , United Therapeutics Corporation (UTHR - Free Report) and IDEXX Laboratories, Inc. (IDXX - Free Report) . While Lantheus and United Therapeutics sport a Zacks Rank #1 (Strong Buy), IDEXX Laboratories carries a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
Lantheus’ earnings surpassed the Zacks Consensus Estimate in each of the last four quarters, the average beat being 51.09%. The Zacks Consensus Estimate for LNTH’s 2023 earnings suggests an improvement of 10%, while the same for revenues indicates growth of 11.9% from the respective 2022 estimates.
The Zacks Consensus Estimate for LNTH’s 2023 earnings has moved 0.2% north in the past 60 days. Shares of Lantheus have soared 108.6% in a year.
United Therapeutics’ earnings surpassed estimates in two of the last four quarters and missed the mark twice, the average being 7.24%. The Zacks Consensus Estimate for UTHR’s 2023 earnings indicates a 13.2% rise, while the same for revenues suggests an improvement of 12.6% from the respective 2022 estimates.
The consensus mark for UTHR’s 2023 earnings has moved 0.3% north in the past 30 days. Shares of United Therapeutics have gained 27.3% in a year.
IDEXX Laboratories’ earnings outpaced estimates in each of the trailing four quarters, the average being 5.19%. The Zacks Consensus Estimate for IDXX’s 2023 earnings indicates a 19.3% rise, while the same for revenues suggests an improvement of 7% from the respective 2022 estimates.
The consensus mark for IDXX’s 2023 earnings has moved up 0.3% in the past seven days. Shares of IDEXX Laboratories have lost 7.5% in a year.