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Magellan Health (MGLN) Up 0.7% Since Last Earnings Report: Can It Continue?

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It has been about a month since the last earnings report for Magellan Health (MGLN - Free Report) . Shares have added about 0.7% in that time frame, underperforming the S&P 500.

Will the recent positive trend continue leading up to its next earnings release, or is Magellan Health due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.

Magellan's (MGLN - Free Report) Q4 Earnings Miss Estimates, Decline Y/Y

Magellan Health’s reported loss per share of 38 cents, wider than the Zacks Consensus Estimate of a loss of 30 cents. However, in the year-ago quarter, the company reported earnings of $1.24 per share.

Revenues of $1.18 billion surpassed the Zacks Consensus Estimate by 7.5% but declined 34.3% year over year.

Segmental profit plunged to $11.2 million from $55.9 million in the year-ago quarter due to lower contribution from Healthcare and Pharmacy Management units.

Healthcare segment’s profit of $17.5 million was down 53.6% year over year, mainly due to lower revenues and higher direct service cost.

Pharmacy Management segment’s profit of $19.9 million fell 44.8% year over year, mainly due to higher cost of goods sold and direct service cost.

Total costs and expenses escalated 9.2% year over year to $1.2 billion due to higher cost of goods sold, direct service costs and other operating expenses plus special charges.

Capital Position

Cash flow provided by operations from continuing operations for the year ended Dec 31, 2020 was $179.5 million compared with $183.6 million in the corresponding period of 2019.

As of Dec 31, 2020, the company’s unrestricted cash and investments totaled $1,148.8 million compared with $81.1 million in the comparable period of 2019. This increase was largely due to the receipt of proceeds from the MCC Business sale to Molina.

As of Dec 31, 2020, its cash and cash equivalents totaled $1.14 billion compared with $115.8 million in the corresponding period of 2019.

As of Dec 31, 2020, the company’s total assets increased 8.7% from the 2019-end figure to $3.4 billion.

Total stockholders’ equity of $1.87 billion as of Dec 31, 2020 increased 33.8% from the prior-year comparable period.

 

How Have Estimates Been Moving Since Then?

Analysts were quiet during the last two month period as none of them issued any earnings estimate revisions. The consensus estimate has shifted 23.02% due to these changes.

VGM Scores

Currently, Magellan Health has a poor Growth Score of F, however its Momentum Score is doing a lot better with a B. Charting a somewhat similar path, the stock was allocated a grade of A on the value side, putting it in the top quintile for this investment strategy.

Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Magellan Health has a Zacks Rank #4 (Sell). We expect a below average return from the stock in the next few months.


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