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Here's Why Investors Should Retain Molina Healthcare (MOH) Now
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Molina Healthcare, Inc. (MOH - Free Report) is currently aided by growing premiums, contract wins, pursuit of buyouts and a solid financial position. A strong 2023 business outlook also reinforces investors’ confidence in the stock.
Zacks Rank & Price Performance
Molina Healthcare currently carries a Zacks Rank #3 (Hold).
The stock has gained 13.5% in the past year compared with the industry’s 1.3% growth. The Zacks Medical sector has declined 7.2% but the S&P 500 composite have risen 15.8% in the same time frame.
Image Source: Zacks Investment Research
Favorable Style Score
MOH is well-poised for progress, as evidenced by its 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 $20.82 per share, indicating an improvement of 16.2% from the year-earlier reading. The consensus mark for 2024 earnings is pegged at $23.76 per share, suggesting 14.1% growth from the 2023 estimate.
Impressive Earnings Surprise History
MOH’s bottom line outpaced earnings estimates in each of the trailing four quarters, the average surprise being 7.46%.
Solid Return on Equity
The return on equity for Molina Healthcare is currently 34.9%, which is higher than the industry’s average of 23.4%. The figure substantiates the company’s efficiency in utilizing shareholders’ funds.
A Strong 2023 EPS Outlook
Management anticipates adjusted earnings per share to be a minimum of $20.75 for this year, which suggests 16% growth from the 2022 figure.
Key Business Tailwinds
Molina Healthcare’s premium revenues continue to be driven by a growing customer base, attributable to strength exhibited by its Medicaid and Medicare businesses. Premium revenues improved 5.2% year over year in the first nine months of 2023. Management estimates it to remain within 13-15% in the long term.
Affordable health plans infused with widespread benefits have often endowed contract wins on the health insurer, which serve as a means to bolster membership growth. This year, it received a Medicaid managed care contract from the New Mexico Human Services Department. Molina Healthcare was also awarded Medi-Cal contracts from the California Department of Health Care Services in 2023. The contracts are likely to be effective from the very beginning of 2024 and grow MOH’s Medi-Cal membership from around 600,000 members (at Sep 2022 end) to roughly 1.2 million members in 2024.
An aging U.S. population belonging to the medically vulnerable group is likely to keep the demand of Molina Healthcare’s Medicare plans high in the days ahead.
A series of acquisitions undertaken over the years have upgraded the capabilities, diversified revenue streams and strengthened the geographical footprint of Molina Healthcare. It acquired My Choice Wisconsin at the beginning of September 2023. Molina Healthcare announced plans to buy Brand New Day and Central Health Plan of California this June.
The health insurer undertakes cost-curbing initiatives in order to provide some respite to margins. A strong financial position provides an impetus to MOH for pursuing business investments. Expanding cash reserves and commendable cash-generating abilities are a testament to a solid financial stand. Cash and cash equivalents at the third-quarter end climbed 38.9% from the 2022-end figure, while it generated operating cash flows of $2.4 billion in the first nine months of 2023.
Amphastar Pharmaceuticals earnings surpassed estimates in each of the last four quarters, the average surprise being 52.06%. The Zacks Consensus Estimate for AMPH’s 2023 earnings indicates a surge of 62.4% from the prior-year tally. The consensus mark for revenues suggests an improvement of 28.4% from the year-ago actual. The consensus mark for AMPH’s 2023 earnings has moved 17.6% north in the past 30 days.
The bottom line of DexCom beat estimates in each of the trailing four quarters, the average beat being 36.43%. The Zacks Consensus Estimate for DXCM’s 2023 earnings indicates a surge of 64.4% from the year-ago figure. The consensus mark for revenues suggests an improvement of 23.5% from the prior-year tally. The consensus mark for DXCM’s 2023 earnings has moved 16.3% north in the past 30 days.
Medpace’s earnings outpaced estimates in each of the trailing four quarters, the average surprise being 14.62%. The Zacks Consensus Estimate for MEDP’s 2023 earnings indicates an improvement of 18.8% from the year-ago actual. The consensus mark for revenues suggests 29.4% growth from the year-ago actual. The consensus mark for MEDP’s 2023 earnings has moved 1.6% north in the past 30 days.
Shares of Amphastar Pharmaceuticals, DexCom and Medpace have gained 91.4%, 2.4% and 32.5%, respectively, in the past year.
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Here's Why Investors Should Retain Molina Healthcare (MOH) Now
Molina Healthcare, Inc. (MOH - Free Report) is currently aided by growing premiums, contract wins, pursuit of buyouts and a solid financial position. A strong 2023 business outlook also reinforces investors’ confidence in the stock.
Zacks Rank & Price Performance
Molina Healthcare currently carries a Zacks Rank #3 (Hold).
The stock has gained 13.5% in the past year compared with the industry’s 1.3% growth. The Zacks Medical sector has declined 7.2% but the S&P 500 composite have risen 15.8% in the same time frame.
Image Source: Zacks Investment Research
Favorable Style Score
MOH is well-poised for progress, as evidenced by its 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 $20.82 per share, indicating an improvement of 16.2% from the year-earlier reading. The consensus mark for 2024 earnings is pegged at $23.76 per share, suggesting 14.1% growth from the 2023 estimate.
Impressive Earnings Surprise History
MOH’s bottom line outpaced earnings estimates in each of the trailing four quarters, the average surprise being 7.46%.
Solid Return on Equity
The return on equity for Molina Healthcare is currently 34.9%, which is higher than the industry’s average of 23.4%. The figure substantiates the company’s efficiency in utilizing shareholders’ funds.
A Strong 2023 EPS Outlook
Management anticipates adjusted earnings per share to be a minimum of $20.75 for this year, which suggests 16% growth from the 2022 figure.
Key Business Tailwinds
Molina Healthcare’s premium revenues continue to be driven by a growing customer base, attributable to strength exhibited by its Medicaid and Medicare businesses. Premium revenues improved 5.2% year over year in the first nine months of 2023. Management estimates it to remain within 13-15% in the long term.
Affordable health plans infused with widespread benefits have often endowed contract wins on the health insurer, which serve as a means to bolster membership growth. This year, it received a Medicaid managed care contract from the New Mexico Human Services Department. Molina Healthcare was also awarded Medi-Cal contracts from the California Department of Health Care Services in 2023. The contracts are likely to be effective from the very beginning of 2024 and grow MOH’s Medi-Cal membership from around 600,000 members (at Sep 2022 end) to roughly 1.2 million members in 2024.
An aging U.S. population belonging to the medically vulnerable group is likely to keep the demand of Molina Healthcare’s Medicare plans high in the days ahead.
A series of acquisitions undertaken over the years have upgraded the capabilities, diversified revenue streams and strengthened the geographical footprint of Molina Healthcare. It acquired My Choice Wisconsin at the beginning of September 2023. Molina Healthcare announced plans to buy Brand New Day and Central Health Plan of California this June.
The health insurer undertakes cost-curbing initiatives in order to provide some respite to margins. A strong financial position provides an impetus to MOH for pursuing business investments. Expanding cash reserves and commendable cash-generating abilities are a testament to a solid financial stand. Cash and cash equivalents at the third-quarter end climbed 38.9% from the 2022-end figure, while it generated operating cash flows of $2.4 billion in the first nine months of 2023.
Stocks to Consider
Some better-ranked stocks in the Medical space are Amphastar Pharmaceuticals, Inc. (AMPH - Free Report) , DexCom, Inc. (DXCM - Free Report) and Medpace Holdings, Inc. (MEDP - Free Report) . Amphastar Pharmaceuticals currently sports a Zacks Rank #1 (Strong Buy), and DexCom and Medpace carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Amphastar Pharmaceuticals earnings surpassed estimates in each of the last four quarters, the average surprise being 52.06%. The Zacks Consensus Estimate for AMPH’s 2023 earnings indicates a surge of 62.4% from the prior-year tally. The consensus mark for revenues suggests an improvement of 28.4% from the year-ago actual. The consensus mark for AMPH’s 2023 earnings has moved 17.6% north in the past 30 days.
The bottom line of DexCom beat estimates in each of the trailing four quarters, the average beat being 36.43%. The Zacks Consensus Estimate for DXCM’s 2023 earnings indicates a surge of 64.4% from the year-ago figure. The consensus mark for revenues suggests an improvement of 23.5% from the prior-year tally. The consensus mark for DXCM’s 2023 earnings has moved 16.3% north in the past 30 days.
Medpace’s earnings outpaced estimates in each of the trailing four quarters, the average surprise being 14.62%. The Zacks Consensus Estimate for MEDP’s 2023 earnings indicates an improvement of 18.8% from the year-ago actual. The consensus mark for revenues suggests 29.4% growth from the year-ago actual. The consensus mark for MEDP’s 2023 earnings has moved 1.6% north in the past 30 days.
Shares of Amphastar Pharmaceuticals, DexCom and Medpace have gained 91.4%, 2.4% and 32.5%, respectively, in the past year.