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

Zacks Equity Research
CSX (CSX) reported earnings 30 days ago. What's next for the stock? We take a look at earnings estimates for some clues.

Molina (MOH) closed the most recent trading day at $137.13, moving +1.28% from the previous trading session. The stock lagged the S&P 500's daily gain of 1.32%. Meanwhile, the Dow gained 1.38%, and the Nasdaq, a tech-heavy index, added 1.74%.

Prior to today's trading, shares of the provider of Medicaid-related services had gained 18.22% over the past month. This has outpaced the Medical sector's gain of 2.08% and the S&P 500's gain of 4.16% in that time.

Investors will be hoping for strength from MOH as it approaches its next earnings release, which is expected to be February 11, 2019. On that day, MOH is projected to report earnings of $1.52 per share, which would represent year-over-year growth of 347.06%. Our most recent consensus estimate is calling for quarterly revenue of $4.55 billion, down 8.07% from the year-ago period.

It is also important to note the recent changes to analyst estimates for MOH. Recent revisions tend to reflect the latest near-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

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. Over the past month, the Zacks Consensus EPS estimate has moved 3.57% higher. MOH is currently a Zacks Rank #1 (Strong Buy).

Investors should also note MOH's current valuation metrics, including its Forward P/E ratio of 14.65. This valuation marks a discount compared to its industry's average Forward P/E of 15.29.

It is also worth noting that MOH currently has a PEG ratio of 1.29. 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. MOH's industry had an average PEG ratio of 1.14 as of yesterday's close.

The Medical - HMOs industry is part of the Medical sector. This industry currently has a Zacks Industry Rank of 46, which puts it in the top 18% 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.

You can find more information on all of these metrics, and much more, on Zacks.com.


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