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Magellan Health (MGLN) Gains As Market Dips: What You Should Know

Zacks Equity Research

Magellan Health (MGLN) closed the most recent trading day at $67.40, moving +0.45% from the previous trading session. This change outpaced the S&P 500's 0.53% loss on the day. Meanwhile, the Dow lost 0.47%, and the Nasdaq, a tech-heavy index, lost 1%.

Prior to today's trading, shares of the healthcare management business had lost 4.9% over the past month. This has lagged the Medical sector's loss of 2.34% and the S&P 500's gain of 2.68% in that time.

Wall Street will be looking for positivity from MGLN as it approaches its next earnings report date. This is expected to be July 30, 2019. In that report, analysts expect MGLN to post earnings of $0.83 per share. This would mark a year-over-year decline of 9.78%. Meanwhile, our latest consensus estimate is calling for revenue of $1.74 billion, down 3.69% from the prior-year quarter.

MGLN's full-year Zacks Consensus Estimates are calling for earnings of $4.01 per share and revenue of $7.08 billion. These results would represent year-over-year changes of +63.01% and -3.24%, respectively.

It is also important to note the recent changes to analyst estimates for MGLN. These recent revisions tend to reflect the evolving nature of short-term business trends. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an actionable rating system.

Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. Over the past month, the Zacks Consensus EPS estimate has moved 2.28% higher. MGLN is holding a Zacks Rank of #3 (Hold) right now.

Looking at its valuation, MGLN is holding a Forward P/E ratio of 16.75. Its industry sports an average Forward P/E of 15.67, so we one might conclude that MGLN is trading at a premium comparatively.

Investors should also note that MGLN has a PEG ratio of 0.7 right now. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. The Medical - HMOs industry currently had an average PEG ratio of 1.12 as of yesterday's close.

The Medical - HMOs industry is part of the Medical sector. This industry currently has a Zacks Industry Rank of 19, which puts it in the top 8% of all 250+ industries.

The Zacks Industry Rank includes is listed in order from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Make sure to utilize Zacks. Com to follow all of these stock-moving metrics, and more, in the coming trading sessions.

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