Molina Healthcare (MOH) Wins Medicaid Deal From New Mexico HSD
Molina Healthcare, Inc. MOH unveiled the intent of the New Mexico Human Services Department ("HSD") to award a Medicaid managed care contract to its New Mexico subsidiary, Molina Healthcare of New Mexico. The contract will likely be effective for three years from Jul 1, 2024, and has the potential of getting a further five-year extension. Its shares declined 1.2% on Aug 15, replicating declines in broader markets.
The new contract will provide Molina Healthcare an opportunity to extend health care coverage and serve the diversified needs of New Mexico residents, who are members of the state’s Medicaid managed care program (Turquoise Care). It will also enable MOH to deepen its presence across a state that boasts a significant number of Medicaid enrollees.
Apart from MOH, other managed care organizations (MCOs) recently chosen by the New Mexico HSD to award Turquoise Care Medicaid contracts include BlueCross BlueShield, Presbyterian Health Plan and United Health Plan. Announcement of such contract wins implies the overturn of the prior cancellation of the Turquoise Care Request for Proposals that took place on Jan 30 of this year to give time to the new leadership team of New Mexico HSD to evaluate the procurement process for selecting MCOs.
Inevitably, contract wins boost the customer base and fetch health insurers with higher premiums, which remain the most significant contributors to their top line. The medical membership of Molina Healthcare grew 1.1% year over year as of Jun 30, 2023. Besides, its Medicaid membership witnessed year-over-year increase of 2.8% in the same time frame.
The strength of its Medicaid business has fetched numerous contract wins from time to time. This March, it won a four-year contract, which can be further subject to one-year renewal for two times, from the Indiana Family and Social Services Administration. This was another commendable opportunity for Molina Healthcare to penetrate a geography, which serves around 100,000 Medicaid LTSS members.
In addition to such contract wins, Molina Healthcare also resorts to acquisitions in order to solidify and expand the geographical presence of the Medicaid business. Contract wins and numerous acquisitions make management optimistic to achieve long-term premium revenue growth in the range of 13-15%. And such growth-related efforts have been made possible by the solid financial position of MOH comprising growing cash reserves and robust cash-generating abilities.
Shares of Molina Healthcare have gained 6.6% in the past six months compared with the industry’s 2% growth. MOH currently carries a Zacks Rank #2 (Buy).
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Other Stocks to Consider
Some other top-ranked stocks in the Medical space are Artivion, Inc. AORT, LeMaitre Vascular, Inc. LMAT and Surgery Partners, Inc. SGRY, sporting a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
Artivion’s earnings surpassed the Zacks Consensus Estimate in each of the last four quarters, the average beat being 220.01%. The Zacks Consensus Estimate for AORT’s 2023 earnings is pegged at 14 cents per share, which indicates an increase of nearly three-fold from the prior-year reported figure. The same for revenues suggests growth of 10.4% from the year-ago reported number.
The consensus estimate for AORT’s 2023 earnings has moved 55.6% north in the past 30 days. Shares of Artivion have gained 18.2% in the past six months.
LeMaitre Vascular’s earnings outpaced the Zacks Consensus Estimate in two of the trailing four quarters and missed the mark twice, the average surprise being 2.27%. The Zacks Consensus Estimate for LMAT’s 2023 earnings indicates a rise of 21.5%, while the same for revenues suggests an improvement of 20.9% from the corresponding year-ago reported estimates.
The consensus estimate for LMAT’s 2023 earnings has moved 8.3% north in the past 30 days. Shares of LeMaitre Vascular have gained 11.6% in the past six months.
Surgery Partners’ earnings beat the Zacks Consensus Estimate in three of the trailing four quarters and missed the mark once, the average surprise being 269.64%. The Zacks Consensus Estimate for SGRY’s 2023 earnings is pegged at 71 cents per share, which indicates an increase of more than four-fold from the prior-year reported figure. The same for revenues indicates growth of 9.2% from the year-ago reported figure.
The Zacks Consensus Estimate for SGRY’s 2023 earnings has moved 31.5% north in the past 30 days. Shares of Surgery Partners have declined 5.8% in the past six months.
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