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Molina (MOH) Dips More Than Broader Markets: What You Should Know

Zacks Equity Research

Molina (MOH) closed at $135.50 in the latest trading session, marking a -0.66% move from the prior day. This move lagged the S&P 500's daily loss of 0.53%. Elsewhere, the Dow lost 0.47%, while the tech-heavy Nasdaq lost 1%.

Coming into today, shares of the provider of Medicaid-related services had lost 1.01% in the past month. In that same time, the Medical sector lost 2.34%, while the S&P 500 gained 2.68%.

Investors will be hoping for strength from MOH as it approaches its next earnings release, which is expected to be July 30, 2019. On that day, MOH is projected to report earnings of $2.56 per share, which would represent year-over-year growth of 13.78%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $4.07 billion, down 16.57% from the year-ago period.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $10.96 per share and revenue of $16.38 billion. These totals would mark changes of +3.3% and -13.26%, respectively, from last year.

Investors should also note any recent changes to analyst estimates for MOH. Recent revisions tend to reflect the latest near-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.

The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. The Zacks Consensus EPS estimate has moved 0.21% higher within the past month. MOH is currently a Zacks Rank #1 (Strong Buy).

Valuation is also important, so investors should note that MOH has a Forward P/E ratio of 12.45 right now. This represents a discount compared to its industry's average Forward P/E of 15.67.

Investors should also note that MOH has a PEG ratio of 0.94 right now. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. Medical - HMOs stocks are, on average, holding a PEG ratio of 1.12 based on yesterday's closing prices.

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 gauges the strength of our individual industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Be sure to follow all of these stock-moving metrics, and many more, on Zacks.com.

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