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Molina (MOH) Down 16.5% Since Last Earnings Report: Can It Rebound?

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A month has gone by since the last earnings report for Molina (MOH - Free Report) . Shares have lost about 16.5% in that time frame, underperforming the S&P 500.

But investors have to be wondering, will the recent negative trend continue leading up to its next earnings release, or is Molina due for a breakout? Well, first let's take a quick look at its most recent earnings report in order to get a better handle on the recent drivers for Molina Healthcare, Inc before we dive into how investors and analysts have reacted as of late.

Molina Healthcare Q3 Earnings Miss Estimates on Rising Expenses

Molina Healthcare reported third-quarter 2025 adjusted earnings per share (EPS) of $1.84, which missed the Zacks Consensus Estimate of $3.97. Also, the bottom line fell 69.4% from the year-ago period.

Total revenues amounted to $11.5 billion, which improved 11% year over year. The top line also beat the consensus mark by 5.3%.

The quarterly earnings were affected by higher medical care costs and general and administrative expenses. However, rising premiums and rate hikes partially offset the negatives.

MOH’s Q3 Operational Update

Premium revenues of $10.8 billion increased 11.8% year over year in the quarter under review and beat the Zacks Consensus Estimate of $10.3 billion. The improvement stemmed from buyouts, rate hikes and an expanding nationwide footprint.

As of Sept. 30, 2025, total membership improved 0.5% year over year to around 5.6 million but missed the Zacks Consensus Estimate by 2%. The health insurer witnessed year-over-year increases in customers within its Medicare and Marketplace businesses.

Investment income declined 8.5% year over year to $108 million but beat the consensus mark of $99.9 million.

Total operating expenses of $11.3 billion increased 14.9% year over year and were higher than our model estimate of $10.5 billion due to a rise in medical care costs, coupled with higher general and administrative expenses. The adjusted general and administrative expense ratio decreased to 6.3% in the third quarter from 6.4% a year ago. Interest expenses of $49 million rose from $29 million in the prior year.

The consolidated medical care ratio (medical costs as a percentage of premium revenues), or MCR, was 92.6% in the quarter under review. The metric rose from 89.2% a year ago and was higher than the consensus mark of 90.3%. Also, the figure was higher than our estimate of 89.8%.

Molina Healthcare’s adjusted net income plunged 72% year over year to $97 million.

MOH’s Financial Update (As of Sept. 30, 2025)

Molina Healthcare exited the third quarter with cash and cash equivalents of $4.2 billion, which declined from the 2024-end level of $4.7 billion. Total assets of $15.7 billion rose from $15.6 billion at 2024-end.

Long-term debt of $3.7 billion rose from $2.9 billion at 2024-end.

Total stockholders’ equity of $4.2 billion decreased from the $4.5 billion figure at 2024-end.

Net cash used in operating activities amounted to $237 million in the first nine months of 2025, against the $868 million cash generated in the first nine months of 2024.

MOH’s 2025 Guidance

Management now expects premium revenues to be around $42.5 billion, up from the previously projected figure of $42 billion, which indicates an improvement of around 10% from the 2024 reported figure. Adjusted EPS is now forecasted to be around $14 this year, which implies a reduction from its prior forecast figure of at least $19.

Adjusted net income is now projected to be $742 million, while GAAP net income is expected to be $630 million for 2025. Consolidated MCR is likely to stay at 91.3%. It is also expected that the effective tax rate would be 21.7% in 2025.

How Have Estimates Been Moving Since Then?

In the past month, investors have witnessed a downward trend in estimates review.

The consensus estimate has shifted -87.16% due to these changes.

VGM Scores

At this time, Molina has a average Growth Score of C, however its Momentum Score is doing a bit better with a B. Charting a somewhat similar path, the stock has a score of A on the value side, putting it in the top 20% for value investors.

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

Outlook

Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. It's no surprise Molina has a Zacks Rank #5 (Strong Sell). We expect a below average return from the stock in the next few months.


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