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Molina (MOH) Gains But Lags Market: What You Should Know

Zacks Equity Research
Eagle Bancorp (EGBN) delivered earnings and revenue surprises of -4.43% and -0.73%, respectively, for the quarter ended June 2019. Do the numbers hold clues to what lies ahead for the stock?

In the latest trading session, Molina (MOH) closed at $145.28, marking a +0.14% move from the previous day. This change lagged the S&P 500's 0.21% gain on the day. Elsewhere, the Dow gained 0.64%, while the tech-heavy Nasdaq lost 0.05%.

Heading into today, shares of the provider of Medicaid-related services had gained 12.07% over the past month, outpacing the Medical sector's loss of 0.07% and the S&P 500's gain of 2.57% in that time.

Wall Street will be looking for positivity from MOH as it approaches its next earnings report date. This is expected to be April 29, 2019. On that day, MOH is projected to report earnings of $2.44 per share, which would represent year-over-year growth of 42.69%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $4.07 billion, down 12.42% from the year-ago period.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $9.89 per share and revenue of $16.33 billion. These totals would mark changes of -6.79% and -13.56%, respectively, from last year.

Investors might also notice recent changes to analyst estimates for MOH. These recent revisions tend to reflect the evolving nature of short-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.

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 remained stagnant. MOH currently has a Zacks Rank of #2 (Buy).

Investors should also note MOH's current valuation metrics, including its Forward P/E ratio of 14.67. Its industry sports an average Forward P/E of 15.05, so we one might conclude that MOH is trading at a discount comparatively.

It is also worth noting that MOH currently has a PEG ratio of 1.17. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. Medical - HMOs stocks are, on average, holding a PEG ratio of 1.19 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 54, which puts it in the top 22% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our 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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