Core Insights - Molina Healthcare, Inc. reported fourth-quarter 2024 adjusted EPS of $5.05, missing the Zacks Consensus Estimate of $5.81, but reflecting a 15.3% year-over-year growth [1] - Total revenues for the quarter reached $10.5 billion, a 16% increase year-over-year, although it slightly missed the consensus mark [1][2] Financial Performance - Full-year 2024 total revenues were $40.65 billion, up from $34.07 billion the previous year, surpassing the estimate of $40.58 billion [3] - Adjusted EPS for 2024 grew to $22.65 from $20.88, but fell short of the consensus estimate of $23.44 [3] - Adjusted net income for 2024 was $1.31 billion, an increase from $1.21 billion year-over-year [3] Operational Highlights - Premium revenues in Q4 2024 were $9.98 billion, a 19.4% increase year-over-year, exceeding the Zacks Consensus Estimate of $9.85 billion [4] - Total membership as of December 31, 2024, rose 10.8% year-over-year to approximately 5.5 million, although it missed the consensus estimate by 3.1% [5] - Investment income decreased by 2.6% year-over-year to $111 million, but was above the consensus mark of $108.2 million [5] Expense and Ratios - Total operating expenses for Q4 2024 were $10.1 billion, a 15.9% increase year-over-year, exceeding model estimates due to rising medical care costs and higher administrative expenses [6] - The consolidated medical care ratio (MCR) was 90.2% for the quarter, up from 89.1% a year ago, and higher than the consensus mark of 88.72% [7] Balance Sheet and Cash Flow - As of December 31, 2024, cash and cash equivalents were $4.66 billion, down from $4.85 billion at the end of 2023 [8] - Total assets increased to $15.63 billion from $14.89 billion at the end of 2023, while long-term debt rose to $2.92 billion from $2.18 billion [8] - Net cash provided by operating activities was $644 million in 2024, a significant decline from $1.66 billion in 2023 [9] 2025 Guidance - Management projects premium revenues to reach around $42 billion in 2025, indicating a 9% improvement from 2024 [11] - Adjusted EPS is expected to be at least $24.50, reflecting an 8% increase from 2024 [11] - Total membership is estimated to grow to 5.9 million by the end of 2025, with a projected consolidated MCR of 88.7% [12]

Financial Data and Key Metrics Changes - The company reported adjusted earnings per share of $5.05 on $10 billion of premium revenue for Q4 2024, with full-year adjusted earnings per share of $22.65, representing an 8.5% year-over-year growth [10][12][34] - Full-year premium revenue reached $38.6 billion, reflecting a 19% year-over-year growth, while the pretax margin was 4.3%, within the long-term target range [13][14] - The consolidated Net Cost Ratio (NCR) for Q4 was 90.2%, higher than expected due to medical cost pressures, with a full-year NCR of 89.1% [11][63] Business Line Data and Key Metrics Changes - In Medicaid, the full-year MCR was 90.3%, or 89.8% when adjusted for prior year items, with a Q4 MCR also at 90.2% due to higher utilization [14][63] - Medicare's full-year MCR was 89.1%, with Q4 MCR at 93.8%, reflecting higher medical costs [19][67] - Marketplace performed well with a full-year MCR of 75.4%, significantly below the long-term target range, allowing for reinvestment into pricing for growth [20][69] Market Data and Key Metrics Changes - The company expects to end 2025 with approximately 5 million Medicaid members, 250,000 Medicare members, and 580,000 Marketplace members, reflecting significant growth [75][78] - The 2025 premium revenue guidance is approximately $42 billion, representing about 9% growth from 2024 [79] Company Strategy and Development Direction - The company is focused on growth initiatives, including recent acquisitions and new contract wins, projecting a path to $46 billion in premium revenue by 2026 and at least $52 billion by 2027 [28][31] - The company aims to maintain a solid earnings profile with embedded earnings projected to reach $7.75 for 2026 and beyond, supporting future EPS growth [31][88] Management's Comments on Operating Environment and Future Outlook - Management acknowledged that Q4 results fell short of expectations but emphasized the ability to manage through industry-wide headwinds [53][56] - The company remains confident in achieving long-term targets and believes that any changes to the Medicaid program will be marginal [47][51] Other Important Information - The company closed its acquisition of Connecticut from EmblemHealth, expected to generate $1.2 billion in revenue, primarily in Marketplace [22] - The company repurchased 1.7 million shares at a total cost of $500 million and closed a bond offering of $750 million [72] Q&A Session Summary Question: Can you provide more color on the components within the Medicaid MLR for 2025? - Management indicated that the MLR guidance for 2025 is flat with 2024, projecting a 4.5% rate increase and a 4.5% trend off the 2024 baseline [92][93] Question: What were the specific drivers for the Marketplace MLR in Q4? - Management attributed the Q4 Marketplace MCR of 83.3% to normal seasonality, noting that the full-year MCR of 75.4% was satisfactory [122] Question: Can you clarify the cost trends and what drives the assumptions for 2025? - Management explained that the 2024 cost trend was 6.5%, while the 2025 projection is 4.5%, reflecting a more stable utilization trend without the acuity shift seen in 2024 [135][136]

Core Insights - Molina (MOH) reported $10.5 billion in revenue for Q4 2024, a 16% year-over-year increase, with an EPS of $5.05 compared to $4.38 a year ago, indicating a revenue surprise of -0.04% and an EPS surprise of -13.08% against consensus estimates [1] Financial Performance Metrics - Molina's total Membership Care Ratio (MCR) was 90.2%, exceeding the estimated 88.7% [4] - Medicare MCR was reported at 93.8%, higher than the estimated 90.2% [4] - Marketplace MCR stood at 83.3%, above the estimated 78.2% [4] - Total ending membership was 5.54 million, below the average estimate of 5.71 million [4] - Medicaid membership was 4.89 million, compared to the estimated 5.03 million [4] Revenue Breakdown - Premium tax revenue was $383 million, significantly lower than the estimated $617.30 million, reflecting a -30.6% year-over-year change [4] - Premium revenue reached $9.98 billion, slightly above the estimated $9.85 billion, marking a +19.4% year-over-year increase [4] - Investment income was reported at $111 million, slightly above the estimated $108.16 million, representing a -2.6% year-over-year change [4] - Other revenue was $22 million, exceeding the estimated $20.28 million, with a +10% year-over-year increase [4] - Medicare premium revenue was $1.29 billion, below the estimated $1.35 billion, with a +22.2% year-over-year change [4] - Medicaid premium revenue was $8.04 billion, surpassing the estimated $7.88 billion, reflecting an +18.6% year-over-year increase [4] - Marketplace premium revenue was $650 million, below the estimated $691.79 million, with a +24.3% year-over-year change [4] Stock Performance - Molina's shares returned +6.4% over the past month, outperforming the Zacks S&P 500 composite's +1.7% change [3] - The stock currently holds a Zacks Rank 4 (Sell), indicating potential underperformance in the near term [3]

Core Viewpoint - Molina's quarterly earnings of $5.05 per share fell short of the Zacks Consensus Estimate of $5.81 per share, marking an earnings surprise of -13.08% [1] - The company reported revenues of $10.5 billion for the quarter, slightly missing the consensus estimate by 0.04%, but showing an increase from $9.05 billion year-over-year [2] Financial Performance - Earnings per share (EPS) for the same quarter last year was $4.38, indicating a year-over-year increase [1] - Over the last four quarters, Molina has surpassed consensus EPS estimates three times [2] - The current consensus EPS estimate for the upcoming quarter is $6.60, with expected revenues of $10.71 billion, and for the current fiscal year, the EPS estimate is $26.06 on revenues of $43.78 billion [7] Market Performance - Molina shares have increased approximately 8.4% since the beginning of the year, outperforming the S&P 500's gain of 2.7% [3] - The company's stock currently holds a Zacks Rank 4 (Sell), indicating expectations of underperformance in the near future [6] Industry Outlook - The Medical - HMOs industry, to which Molina belongs, is currently ranked in the bottom 8% of over 250 Zacks industries, suggesting potential challenges ahead [8] - Empirical research indicates a strong correlation between near-term stock movements and trends in earnings estimate revisions, which could impact Molina's stock performance [5]

Financial Performance - For the full year 2024, Molina Healthcare reported premium revenue of approximately $38.6 billion, an increase of 19% year over year[3]. - GAAP net income for the full year 2024 was $20.42 per diluted share, reflecting a 9% increase year over year[6]. - Adjusted net income for the full year 2024 was $22.65 per diluted share, representing an 8% increase year over year[6]. - The company expects full year 2025 premium revenue to be approximately $42 billion, indicating a 9% growth from 2024[11]. - Full year 2025 adjusted earnings per diluted share are projected to be at least $24.50, reflecting an 8% growth over 2024[12]. - Net income for the year ended December 31, 2024, was $1,179 million, up from $1,091 million in 2023, reflecting a year-over-year increase of 8.0%[26]. - For the year ended December 31, 2024, the company reported a GAAP net income of $1,251 million, translating to $22.50 per diluted share[39]. - Adjusted net income for the same period was $1,362 million, or $24.50 per diluted share, after accounting for adjustments totaling $111 million[39]. - Adjusted net income for the year was $1,308 million, up from $1,213 million in 2023, reflecting an increase of 7.8%[36]. Membership and Market Presence - As of December 31, 2024, Molina Healthcare served approximately 5.5 million members[3]. - Ending membership in Medicaid increased to 4,890,000 in 2024, up from 4,542,000 in 2023, marking a growth of 7.7%[28]. - The company reported a total of 5,535,000 members across all segments by the end of 2024, compared to 4,995,000 in 2023, an increase of 10.9%[28]. - The company is focused on expanding its market presence through newly awarded state Medicaid contracts and acquisitions[41]. Financial Ratios and Cash Flow - The consolidated Medical Care Ratio (MCR) for the full year 2024 was 89.1%, indicating effective management of medical costs[10]. - The medical care ratio (MCR) for Medicaid improved to 90.3% in 2024 from 88.7% in 2023, indicating better cost management[28]. - Operating cash flow for the year ended December 31, 2024, was $644 million, a decrease from $1,662 million in 2023[10]. - Cash and cash equivalents at the end of the period were $4,741 million, down from $4,908 million in 2023, a decrease of 3.4%[26]. Assets and Liabilities - Total assets increased to $15,630 million in 2024 from $14,892 million in 2023, representing a growth of 4.9%[24]. - Total current liabilities decreased to $7,896 million in 2024 from $8,168 million in 2023, a reduction of 3.3%[24]. - The company’s long-term debt rose to $2,923 million in 2024 from $2,180 million in 2023, an increase of 34.0%[24]. Future Outlook - The company anticipates approximately 13% growth in earnings due to recent Medicaid and Medicare Duals contract wins scheduled to commence in 2026[4]. - The company anticipates incremental diluted earnings per share from new Medicaid contracts and acquisitions to be included in the 2026-2028 period, with a focus on states like California, Iowa, and Texas[41]. - Non-recurring costs associated with recently announced acquisitions are estimated at approximately $20 million[41]. - The company’s guidance for 2025 includes a statutory tax rate effect of approximately 24.1% on income tax adjustments[39]. Shareholder Actions - The company purchased approximately 1.7 million shares for $500 million in the fourth quarter of 2024[9]. - The diluted weighted average shares outstanding for the calculations were approximately 55.6 million[40]. Adjustments and Non-Recurring Items - The adjustments for amortization of intangible assets amounted to $96 million, contributing $1.73 per diluted share[39]. - The year ended December 31, 2023, included non-recurring litigation and a credit loss due to the insolvency of an issuer in the Texas risk pool[37]. - The company’s performance metrics include non-GAAP measures such as "new store embedded earnings," which reflect expected earnings from new contracts not included in the 2025 guidance[41].

Core Viewpoint - Molina Healthcare, Inc. is expected to report its fourth-quarter 2024 results on February 5, 2025, with earnings estimated at $5.81 per share and revenues of $10.5 billion, indicating a year-over-year earnings increase of 32.7% and revenue growth of 16.1% [1][2]. Earnings Estimates - The earnings estimate for Molina Healthcare has remained stable over the past month, with a consensus indicating a significant year-over-year increase [2]. - The company has a history of exceeding earnings estimates, having beaten the consensus in each of the last four quarters with an average surprise of 2.4% [3]. Earnings Prediction Model - Despite a positive Earnings ESP of +1.91%, Molina Healthcare holds a Zacks Rank of 4 (Sell), which diminishes the likelihood of an earnings beat this quarter [4]. Factors Influencing Q4 Results - Growth in the Medicaid and Medicare customer base is expected to drive premium growth, with a consensus estimate indicating a 17.8% year-over-year increase in premiums for the fourth quarter [6]. - Medicaid premiums are projected to grow nearly 15% year-over-year, while Medicare premiums are expected to reach $1.35 billion, reflecting a 28% increase [6]. Membership Growth - Contract wins and renewals from federal and state authorities are likely to contribute to membership growth in Molina's Medicaid and Medicare segments [7]. - Medicaid membership is expected to increase by 10.8% year-over-year, while Medicare membership is projected to grow by 44.4% [9]. Medical Care Ratio (MCR) - The consensus estimate for the medical care ratio in the Marketplace is pegged at 78.16%, down from 79.80% a year ago, indicating improved margins [10]. - The total MCR is estimated at 88.7%, a slight decrease from 89.1% year-over-year, suggesting potential for growing margins [10]. Cost and Income Challenges - Rising costs and a projected 5.1% decline in investment income may pose challenges for Molina Healthcare, with total operating expenses expected to increase by over 11% from the previous year [11].

Core Viewpoint - Molina (MOH) is expected to report quarterly earnings of $5.81 per share, a 32.7% increase year-over-year, with revenues projected at $10.5 billion, reflecting a 16.1% increase compared to the previous year [1]. Earnings Estimates - There have been no revisions in the consensus EPS estimate for the quarter over the last 30 days, indicating stability in analysts' forecasts [1]. - Revisions to earnings estimates are crucial indicators for predicting investor actions regarding the stock [2]. Revenue Projections - Analysts estimate 'Revenue- Premium tax revenue' to be $617.30 million, marking an 11.8% increase from the prior-year quarter [3]. - 'Revenue- Premium revenue' is projected at $9.85 billion, indicating a 17.8% year-over-year increase [4]. - 'Revenue- Investment income' is expected to reach $108.16 million, reflecting a decrease of 5.1% from the year-ago quarter [4]. - 'Revenue- Other revenue' is estimated at $20.28 million, showing a 1.4% increase from the previous year [4]. Membership and MCR Metrics - 'MCR - Total' is expected to be 88.7%, down from 89.1% in the same quarter last year [5]. - 'MCR - Medicare' is projected at 90.2%, compared to 93.3% a year ago [5]. - 'MCR - Marketplace' is estimated at 78.2%, down from 79.8% year-over-year [5]. - 'Ending Membership by Program - Total' is forecasted to reach 5.71 million, up from 5 million in the same quarter last year [6]. - 'Ending Membership by Program - Medicaid' is expected to be 5.03 million, compared to 4.54 million a year ago [6]. - 'Ending Membership by Program - Medicare' is projected at 248.3 thousand, up from 172 thousand in the previous year [7]. - 'Ending Membership by Program - Marketplaces' is estimated at 429.26 thousand, compared to 281 thousand a year ago [7]. - The consensus estimate for 'MCR - Medicaid' stands at 89.2%, unchanged from the previous year [7]. Stock Performance - Molina shares have increased by 9.1% over the past month, outperforming the Zacks S&P 500 composite, which moved up by 1% [8]. - With a Zacks Rank 4 (Sell), Molina is expected to underperform the overall market in the near future [8].

Molina (MOH) is expected to deliver a year-over-year increase in earnings on higher revenues when it reports results for the quarter ended December 2024. This widely-known consensus outlook gives a good sense of the company's earnings picture, but how the actual results compare to these estimates is a powerful factor that could impact its near-term stock price.The stock might move higher if these key numbers top expectations in the upcoming earnings report, which is expected to be released on February 5. On ...

The first time Molina Healthcare (NYSE: MOH ) entered my radar was a few months ago, when the legendary investor Michael Burry increased his position by over 22%. He opened his position in the company in Q2 2024 and after theInvesting has been a passion of mine since childhood, and I began putting that passion into practice when I started investing in stocks at the age of 18 in 2018. Over the years, I have achieved impressive results by taking a contrarian approach, focusing on unloved and undervalued asset ...

If you are looking for a stock that has a solid history of beating earnings estimates and is in a good position to maintain the trend in its next quarterly report, you should consider Molina (MOH) . This company, which is in the Zacks Medical - HMOs industry, shows potential for another earnings beat.When looking at the last two reports, this provider of Medicaid-related services has recorded a strong streak of surpassing earnings estimates. The company has topped estimates by 1.55%, on average, in the last ...