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Molina (MOH) Down 1.4% Since Last Earnings Report: Can It Rebound?

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A month has gone by since the last earnings report for Molina (MOH). Shares have lost about 1.4% in that time frame, underperforming the S&P 500.

Will the recent negative trend continue leading up to its next earnings release, or is Molina due for a breakout? 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 catalysts.

Molina Healthcare's Q1 Earnings Top Estimates, Rise Y/Y

Molina Healthcare's first-quarter 2021 adjusted earnings of $4.44 per share beat the Zacks Consensus Estimate by 17.5%. Moreover, the bottom line improved 47% year over year on the back of higher revenues.

Total revenues of $6.5 billion also beat the consensus mark by 5.2%. Moreover, the top line rose 43.4% year over year on increased membership in Medicaid and Marketplace. It also includes the positive impact of buyouts that closed in the second half of last year.

Quarterly Operational Update

The company’s net income totaled $228 million, up 28.1% year over year.

Total operating expenses increased 44.7% year over year to $6.2 billion. This rise was due to higher medical care costs, general and administrative expenses, premium tax expenses, etc. Molina Healthcare’s interest expenses climbed 42.9% year over year to $30 million.

Total membership at the end of the first quarter stands at 4.6 million members, up 35% year over year.

Financial Update

As of Mar 31, 2021, Molina Healthcare’s cash and cash equivalents increased 6.7% to $4.4 billion from the level at 2020 end. Total assets rose 4.4% from the level at 2020 end to $9.9 billion.

The company’s shareholder equity improved 3.2% from the figure at 2020 end to $2.2 billion.

As of Mar 31, 2021, net cash flow provided by operating activities stands at $568 million, up 297.2% year over year.

2021 Guidance

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

It now expects earnings per share to be no less than $13, up from the prior-projected range of $12.50-$13 per share. However, it raised its 2020 total revenue outlook to more than $25 billion, higher than the prior guidance of above $24 billion. The company now estimates 2021 premium revenues to be in excess of$24 billion.

How Have Estimates Been Moving Since Then?

It turns out, estimates revision flatlined during the past month.

VGM Scores

At this time, Molina has a great Growth Score of A, though it is lagging a bit on the Momentum Score front with a B. Charting a somewhat similar path, 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

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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