We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Recently, the company’s second-quarter 2020 adjusted earnings of $4.79 per share beat the Zacks Consensus Estimate by 1.9%. Moreover, the bottom line soared 54% year over year on the back of higher revenues. Total revenues of $4.6 billion also rose 10.1% year over year on increased membership.
Following better-than-expected earnings, the company raised its revenue guidance to $18.8 billion from its earlier projection of $18.3 billion owing to higher Medicaid enrollment through the first half of the year as well as revenues from YourCare membership. The company anticipates earnings in the range of $11.20-$11.70 per share.
It also expects premium revenue growth of approximately 20% for 2021. A solid outlook should instill investors’ confidence in the stock.
On the back of its strategic initiatives and growing membership, the company saw strength in its revenue base. The same increased 10.3% year over year in the first six months of 2020. We are hopeful that the company’s top line will continue to be aided by these tailwinds.
Molina Healthcare’s solid balance sheet position impresses. Its times interest earned stands at 13.7X, higher than the industry average of 12.4X. Moreover, as of Jun 30, 2020, the company had cash and cash equivalents worth $3.3 billion, higher than its long-term debt of $1.8 billion. It also enhanced its revolver to $1 billion from its previous level of $500 million.
Is the Bull Run Likely to Continue?
We expect the company to continue performing well as it steadily pursues its strategic efforts.
The company’s membership will also rise going forward. Its YourCare membership is expected to grow by 47,000 in the third quarter. We expect the same to surge on contract wins. Its Kentucky RFP win will get contracts starting Jan 1, 2021.
We also expect the company’s restructuring initiative to curb costs going forward. The measures include streamlining of its organizational structure to improve efficiency as well as the speed and quality of decision-making.
The acquisition of Magellan Health will enable it to serve more than 3.6 million members under government-sponsored healthcare programs across 18 states. This buyout is projected to provide $2.8 billion of revenues in 2021.
The company's 2020 earnings estimate stands at $11.84, indicating an upside of 2.3% year over year.
Looking for Stocks with Skyrocketing Upside?
Zacks has just released a Special Report on the booming investment opportunities of legal marijuana.
Ignited by new referendums and legislation, this industry is expected to blast from an already robust $6.7 billion to $20.2 billion in 2021. Early investors stand to make a killing, but you have to be ready to act and know just where to look.
Image: Bigstock
Molina Healthcare (MOH) Surges 44.1% YTD: More Room to Run?
Molina Healthcare, Inc (MOH - Free Report) has been buoying investors’ optimism on the back of its financial solvency and rising membership.
Shares of this currently Zacks Rank #3 (Hold) company have surged 44.1% year to date, outperforming its industry’s growth of 1.6%.
The price performance looks stellar when compared to other companies’ stock movements in the same space, such as Centene Corporation (CNC - Free Report) , Humana Inc. (HUM - Free Report) and UnitedHealth Group Incorporated (UNH - Free Report) , which have gained 3.2%, 15% and 9.9%, respectively. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Recently, the company’s second-quarter 2020 adjusted earnings of $4.79 per share beat the Zacks Consensus Estimate by 1.9%. Moreover, the bottom line soared 54% year over year on the back of higher revenues. Total revenues of $4.6 billion also rose 10.1% year over year on increased membership.
Following better-than-expected earnings, the company raised its revenue guidance to $18.8 billion from its earlier projection of $18.3 billion owing to higher Medicaid enrollment through the first half of the year as well as revenues from YourCare membership. The company anticipates earnings in the range of $11.20-$11.70 per share.
It also expects premium revenue growth of approximately 20% for 2021. A solid outlook should instill investors’ confidence in the stock.
On the back of its strategic initiatives and growing membership, the company saw strength in its revenue base. The same increased 10.3% year over year in the first six months of 2020. We are hopeful that the company’s top line will continue to be aided by these tailwinds.
Molina Healthcare’s solid balance sheet position impresses. Its times interest earned stands at 13.7X, higher than the industry average of 12.4X. Moreover, as of Jun 30, 2020, the company had cash and cash equivalents worth $3.3 billion, higher than its long-term debt of $1.8 billion. It also enhanced its revolver to $1 billion from its previous level of $500 million.
Is the Bull Run Likely to Continue?
We expect the company to continue performing well as it steadily pursues its strategic efforts.
The company’s membership will also rise going forward. Its YourCare membership is expected to grow by 47,000 in the third quarter. We expect the same to surge on contract wins. Its Kentucky RFP win will get contracts starting Jan 1, 2021.
We also expect the company’s restructuring initiative to curb costs going forward. The measures include streamlining of its organizational structure to improve efficiency as well as the speed and quality of decision-making.
The acquisition of Magellan Health will enable it to serve more than 3.6 million members under government-sponsored healthcare programs across 18 states. This buyout is projected to provide $2.8 billion of revenues in 2021.
The company's 2020 earnings estimate stands at $11.84, indicating an upside of 2.3% year over year.
Looking for Stocks with Skyrocketing Upside?
Zacks has just released a Special Report on the booming investment opportunities of legal marijuana.
Ignited by new referendums and legislation, this industry is expected to blast from an already robust $6.7 billion to $20.2 billion in 2021. Early investors stand to make a killing, but you have to be ready to act and know just where to look.
See the pot trades we're targeting>>