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Is a Beat in the Cards for Molina's (MOH) Earnings in Q1?

Zacks Equity Research

Molina Healthcare, Inc MOH is scheduled to report first-quarter 2019results on Apr 29 after market close. In the last reported quarter, the company delivered a positive surprise of 155.26%.

Q1 Earnings Expectations

Molina Healthcare is expected to perform well in the first quarter of 2019 on the back of higher membership and restructuring initiatives taken by the company. The company’s Medicaid business is also expected to carry on the momentum in the to-be-reported quarter.

The Zacks Consensus Estimate for first-quarter earnings is pegged at $2.41 per share, indicating41% growth from the year-ago reported figure.

However, the company’s revenues might suffer due to contract losses in Florida and New Mexico, which in turn, will induce lower premium revenues. It might also endure a weak performance by its Marketplace business. The Zacks Consensus Estimate of $4.1 billionfor the company’s revenues suggests a decline of 12.4% from the prior-year reported number.

The consensus mark for premium revenues is expected to be around $3.9 billion, implying10% decrease from the year-earlier reported level.

Despite soft revenues, the company is likely to benefit from membership gains at certain areas, such as Illinois and Mississippi.

However, in first-quarter 2019, the company is likely to incur higher General and Administrative expenses.

Moreover, long-term debt of the company is anticipated to mount due to its growth-related investments.

Why a Likely Positive Surprise?

The proven Zacks model conclusively shows that Molina Healthcare is likely to beat on earnings this to-be-reported quarter. This is because the stock needs to have the right combination of a positive Earnings ESP and a favorable Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen.

Earnings ESP: Molina Healthcare has an Earnings ESP of +3.49% as the Most Accurate Estimate of $2.49 is pegged higher than the Zacks Consensus Estimate of $2.41. You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.

Molina Healthcare, Inc Price and EPS Surprise

Molina Healthcare, Inc Price and EPS Surprise | Molina Healthcare, Inc Quote

Zacks Rank: Molina Healthcare sports a Zacks Rank of 1, which increases the predictive power of ESP. Further, a positive ESP in the combination raises the chances of an earnings beat significantly higher for the stock this reporting cycle.You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Conversely, the Sell-rated stocks (#4 or 5) should never be considered going into an earnings announcement, especially when the company is seeing negative estimate revisions.

Upcoming Releases From Medical Sector

Some other stocks worth considering from the medical sector with the perfect mix of elements to also surpass estimates this earnings season are as follows:

Aduro Biotech, Inc. ADRO is slated to release first-quarter earnings figures on May 1. This stock has an Earnings ESPof +82.00% and a Zacks Rank #2.

bluebird bio, Inc. BLUE has an Earnings ESP of +12.12% and a Zacks Rank of 2. The company is set to report first-quarter earnings on May 1.

Humana Inc. HUM has an Earnings ESP of +0.84% and a Zacks Rank #3. The company is set to report first-quarter earnings on May 1.

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