Attractive Price to Sales Ratio
Low EV to Sales Ratio
Strong Return on Equity
Good Operating Profit Margin
Strong Current and Quick Ratios
High Interest Coverage
📈 Strong Premium Revenue Growth
✅ Operating Discipline
🏆 Successful Acquisitions
🌟 Solid 2025 Guidance
📊 Growth from New Contracts
High Price to Cash Flow Ratio
Above Average Price to Book Ratio
Low Net Profit Margin
Low Gross Profit Margin
Moderate Debt Levels
Cash Ratio Below 1
⚠️ Higher Medical Costs
🔄 Transition Year for Medicare
Overall, Molina Healthcare demonstrates strong business quality with strong revenue growth and effective operational management, despite facing some challenges with medical cost pressures. The future prospects appear positive with solid guidance and growth opportunities from new contracts, though there are transition challenges in the Medicare segment.
Analysis Date: February 6, 2025
Last Updated: March 12, 2025
Trailing Twelve Months (TTM) values provide a view of the company's performance over the last year.
Benjamin Graham's value investing approach focuses on finding stocks with a significant margin of safety between their intrinsic value and market price.
Intrinsic Value
Estimated fair value based on Graham's formula
$256.75
Current Market Price: $330.40
IV/P Ratio: 0.78x (>1.0 indicates undervalued)
Margin of Safety
Gap between intrinsic value and market price
-28.999999999999996%
Graham recommended a minimum of 20-30% margin of safety
Higher values indicate a greater potential discount to fair value
Graham Criteria Checklist
Benjamin Graham's value investing checklist for MOH
Positive earnings (5+ years)
Dividend history (5+ years)
P/E ratio ≤ 20 (16.88)
P/B ratio ≤ 1.5 (4.43)
Current ratio ≥ 2.0 (1.62x)
Long-term debt < Net current assets (0.64x)
Margin of safety (-28.999999999999996%)
MOH does not meet all Graham criteria
Trailing Twelve Months (TTM) values provide a view of the company's performance over the last year.
The Return on Equity (ROE) of 25.35% indicates excellent profitability and effective management of equity capital.
The Operating Profit Margin of 4.20% suggests operational efficiency in managing expenses relative to revenue.
The Net Profit Margin of 2.90% is relatively low, indicating that a smaller portion of revenue is converted into profit, which could raise concerns about overall profitability.
A Gross Profit Margin of 11.61% suggests challenges in controlling costs associated with goods sold, which could impact overall profitability.
Profitability metrics measure a company's ability to generate earnings relative to its revenue, operating costs, and other relevant metrics. Higher values generally indicate better performance.
Return on Equity (ROE)
Measures how efficiently a company uses its equity to generate profits
25.35%
Higher values indicate better returns for shareholders
TTM (as of 2025-04-16)
Return on Assets (ROA)
Measures how efficiently a company uses its assets to generate profits
1.61%
Higher values indicate better asset utilization
TTM (as of 2025-04-16)
Gross Profit Margin
Percentage of revenue retained after accounting for cost of goods sold
11.61%
Higher values indicate better efficiency in production
TTM (as of 2025-04-16)
Net Profit Margin
Percentage of revenue retained after accounting for all expenses
2.90%
Higher values indicate better overall profitability
TTM (as of 2025-04-16)
Both the Current Ratio (1.618) and Quick Ratio (1.618) indicate strong liquidity position, meaning the company can cover its short-term liabilities comfortably.
An Interest Coverage ratio of 14.47 indicates that the company is well-positioned to meet its interest obligations, reflecting strong financial health.
A Debt to Equity ratio of 0.694 indicates moderate leverage, which could pose risks if the company faces financial challenges.
The Cash Ratio of 0.590 indicates that the company has less cash available to cover current liabilities, which could be a concern for liquidity.
Financial health metrics assess a company's ability to meet its financial obligations and its overall financial stability.
Debt to Equity Ratio
Total debt divided by total equity
0.69x
Lower values indicate less financial leverage and risk
Less than 1.0 is conservative, 1.0-2.0 is moderate, >2.0 indicates high risk
Q4 2024
Current Ratio
Current assets divided by current liabilities
1.62x
Higher values indicate better short-term liquidity
Less than 1.0 is concerning, 1.0-2.0 is adequate, greater than 2.0 is good
Q4 2024
Molina Healthcare reported a full year premium revenue of $38.6 billion for 2024, representing a 19% year-over-year growth, demonstrating the company's robust market position and ability to capture new contracts.
The company maintained operating discipline despite industry-wide headwinds, achieving a pretax margin of 4.3% for the full year, which is well within their long-term target range.
The recent acquisition of Connecticut from EmblemHealth is expected to generate $1.2 billion in revenue, showcasing Molina's strategic moves to expand its footprint and revenue base.
The consolidated Net Cost Ratio (NCR) for the fourth quarter was 90.2%, higher than expected due to medical cost pressures in Medicaid and Medicare segments, indicating challenges in cost management.
Molina projects a premium revenue of approximately $42 billion and adjusted earnings per share of at least $24.50 for 2025, indicating a strong outlook for the upcoming year.
The company expects incremental revenue of over $3 billion from new contract wins, enhancing future revenue streams and establishing a strong growth trajectory.
Molina expects 2025 to be a transition year for its Medicare segment, which may experience higher utilization pressures and lower margins due to competitive pricing.