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Why Is Molina (MOH) Up 13.3% Since Last Earnings Report?

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It has been about a month since the last earnings report for Molina (MOH - Free Report) . Shares have added about 13.3% in that time frame, outperforming the S&P 500.

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

Molina Healthcare Q1 Earnings Miss Mark, Slip Y/Y

Molina Healthcare’s first-quarter 2020 adjusted earnings of $3.02 per share missed the Zacks Consensus Estimate by 0.3% due to escalating expenses. Moreover, the bottom line slid 0.7% year over year.

However, total revenues of $4.5 billion surpassed the consensus mark by 2.7%. The top line rose 10.4% year over year on the back of increased membership.

Quarterly Operational Update

The company’s net income totaled $178 million, down 10.1% year over year.

Total operating expenses increased 11.4% year over year to $4.2 billion.
This deterioration was due to higher medical care costs, depreciation and amortization.

Molina Healthcare’s interest expenses dropped 8.7% year over year to $21 million.

Total membership by Government Program at the end of first quarter stands at 3.4 billion, up 0.3% year over year.

Financial Update

As of Mar 31, 2020, Molina Healthcare’s cash and cash equivalents decreased 3.5% to $2.3 billion from the level at 2019 end.

Total assets rose 5% from the level at 2019 end to $7.1 billion.

The company’s shareholder equity declined nearly 16% from the figure at 2019 end to $1.6 billion.

For the first quarter, net cash flow from operating activities stands at $136 million, down 45.4% year over year.

Share Repurchase Update

Molina Healthcare completed its $500-million share repurchase program.

In the first quarter, it bought back shares worth $450 million.

2020 Guidance

Following first-quarter results, the company reaffirmed its full-year outlook.

It now expects earnings in the range of $11.20-$11.70 per share.

For the current year, the company anticipates total revenues to be $18.3 billion.

 

How Have Estimates Been Moving Since Then?

In the past month, investors have witnessed an upward trend in fresh estimates. The consensus estimate has shifted 6.88% due to these changes.

VGM Scores

At this time, Molina has an average Growth Score of C, however its Momentum Score is doing a lot better with an A. Following the exact same course, 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 A. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Estimates have been broadly trending upward for the stock, and the magnitude of these revisions looks promising. Notably, Molina has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.


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