Full Year Highlights News Release Investor Contact: Jeffrey Geyer, Jeffrey.Geyer@molinahealthcare.com, 305-317-3012 Media Contact: Caroline Zubieta, Caroline.Zubieta@molinahealthcare.com, 562-951-1588 -MORE- Molina Healthcare Reports Fourth Quarter and Year-End 2025 Financial Results Introduces Full Year 2026 Revenue and Earnings Guidance • Fourth quarter 2025 GAAP loss per diluted share of $3.15 and adjusted loss per diluted share of $2.75 were burdened by approximately $2.00 of unfavorable retroactive rev ...

Core Insights - Molina Healthcare, Inc. operates in the managed healthcare services sector, focusing on low-income families and individuals through government-sponsored programs, serving approximately 5.2 million members across 18 states as of the end of 2021 [1] Price Target and Analyst Expectations - The consensus price target for Molina's stock has varied, with an initial average of $204, adjusted to $195.2 in the last quarter, reflecting concerns or changes in analyst expectations [3] - Over the past year, the average price target was significantly higher at $234.57, indicating a downward revision possibly due to shifts in the company's performance or broader market conditions [3][6] Earnings Outlook - Molina anticipates a 92.5% decline in earnings per share (EPS) for its fourth-quarter earnings report compared to the previous year, primarily due to rising costs despite expected growth in revenues and premiums [3][6] - Analyst Scott Fidel from Stephens maintains a long-term price target of $300 for Molina, indicating confidence in its future performance despite short-term challenges [4][6] Medicare Segment Impact - Molina's Medicare segment, which accounts for 14.5% of its revenue and contributes 14.6% to its operating medical margin profit, is affected by proposed changes in Medicare Advantage rates by the Centers for Medicare & Medicaid Services (CMS) [5] - The proposed flat 0.09% increase in Medicare Advantage rates for 2027 is significantly lower than the expected 5%, contributing to sector volatility [4] Future Earnings Report - Molina Healthcare will release its earnings report for the fourth quarter and full year ending December 31, 2025, after the market closes on February 5, 2026, followed by a conference call and webcast on February 6, 2026 [5]

Core Insights - Molina Healthcare, Inc. (MOH) is scheduled to report its fourth-quarter 2025 results on February 5, 2026, with earnings estimated at 43 cents per share and revenues at $10.8 billion [1][7]. Financial Performance - The fourth-quarter earnings estimate has remained stable over the past 60 days, indicating a year-over-year decrease of 91.5%, while revenues are projected to grow by 2.9% year over year [2]. - For the full year 2025, the revenue estimate stands at $44.89 billion, reflecting a 10.4% increase year over year, but the earnings per share estimate is $13.99, showing a decline of 38.23% year over year [3]. Membership and Premiums - Molina Healthcare expects to gain Medicare membership, while Medicaid membership is projected to decline by 6.4% year over year [7]. - The Zacks Consensus Estimate for premiums indicates a growth of 2.4% year over year in the fourth quarter, with Medicare premiums estimated at $1.4 billion, up 4.9% year over year [10]. Medical Care Ratio (MCR) and Costs - The consensus mark for the medical care ratio (MCR) in the marketplace is pegged at 94.8%, up from 83.3% a year ago, and the total MCR is expected to be around 93%, up from 90.2% [12]. - Rising costs and lower investment income contribute to uncertainty regarding earnings performance, with a projected 9.8% decline in investment income and a 6.1% increase in total operating expenses due to higher medical care costs and general administrative expenses [13]. Industry Context - Major peers such as UnitedHealth Group and Elevance Health have reported their fourth-quarter results, with UnitedHealth showing a 12% year-over-year revenue increase to $113.2 billion despite a 69% decline in adjusted earnings per share due to elevated medical costs [15]. - Elevance Health reported adjusted EPS of $3.33, surpassing estimates by 7.3%, driven by strong premium growth, although overall medical membership declined [16]. - The Cigna Group is projected to have an 18.5% year-over-year increase in earnings for the fourth quarter, with a 6.5% growth in revenues [17].

Core Insights - Molina Healthcare (MOH) is identified as a strong investment opportunity despite prevailing weak market sentiment, with a focus on its business dynamics and potential for growth [1]. Company Analysis - The company has been highlighted for its potential mis-pricing and asymmetric opportunities, particularly in the context of smaller, under-covered companies [1]. Market Sentiment - The current market sentiment is described as weak, which may present unique investment opportunities for discerning investors [1].

Core Insights - Molina Healthcare (MOH) is identified as a strong investment opportunity despite prevailing weak market sentiment, with a focus on its business dynamics and potential for growth [1]. Company Analysis - The company has been highlighted for its potential mis-pricing and asymmetric opportunities, particularly in the context of smaller, under-covered companies [1]. Market Sentiment - The current market sentiment is described as weak, yet the analysis suggests that this environment may provide favorable conditions for investment in Molina Healthcare [1].

Core Viewpoint - The Chinese regulator has imposed a fine of 26.7 million yuan ($3.84 million) on Kuaigou, an e-commerce unit of Kuaishou Technology, for several illegal acts [1] Group 1 - The fine reflects the regulatory scrutiny faced by e-commerce platforms in China [1] - Kuaigou is part of Kuaishou Technology, which is known for its live-streaming services [1] - The amount of the fine indicates the seriousness of the violations identified by the regulator [1]

Investment Philosophy - The investment approach of Van Geelen is inspired by George Soros's concept of reflexivity, emphasizing that narratives drive capital movements and can change reality [2] - Van Geelen's firm, Citrini Research, focuses on identifying stories that will influence capital flows before the market recognizes them [3][4] Performance and Strategy - Van Geelen's portfolio has increased by over 200% since May 2023, with successful trades including cheap Secured Overnight Financing Rate (SOFR) call options that yielded a 46x return [6] - He published a memo on Venezuelan sovereign bonds, predicting regime change, which materialized shortly after [7] Investment Opportunities 1. **Molina Healthcare** - Molina Healthcare operates with the lowest expense ratio in Medicaid, around 7%, and is positioned to benefit from potential margin recovery due to political gridlock [10][11] - The stock has declined by 40% over the past year, but Van Geelen projects significant earnings per share (EPS) growth based on expected margin improvements [12][14] 2. **WPP** - WPP is currently undervalued, trading at 0.2 times sales, as the market anticipates its extinction due to AI advancements [16] - The company has the potential to reduce its workforce significantly while maintaining revenue, indicating a turnaround opportunity [17] 3. **Choice Hotels** - With the upcoming 2026 World Cup in the U.S., Choice Hotels is expected to benefit from increased demand for budget accommodations [18][20] - The investment thesis is based on the certainty of millions of soccer fans needing hotel rooms, making it a straightforward opportunity [19] 4. **Tax-refund Beneficiaries** - Tax refunds for Americans in early 2026 are projected to be 30% to 50% larger than normal due to changes in the tax code, benefiting middle-income households [21][22] - Companies like Somnigroup International, Whirlpool, and Lithia Motors are positioned to capitalize on increased consumer spending from these refunds [23] Market Insights - Van Geelen emphasizes the importance of recognizing current realities rather than attempting to predict future events, highlighting that the World Cup and tax code changes are already established facts [24]

Core Viewpoint - Michael Burry has made a strategic investment shift from UnitedHealth Group to Molina Healthcare, betting on Molina's resilience in the face of regulatory challenges in the healthcare sector [1][3]. Group 1: Investment Strategy - Burry liquidated his stake in UnitedHealth Group in Q3 2025 and heavily invested in Molina Healthcare [1]. - Molina's stock experienced an 8% drop, but it performed better than major competitors like UnitedHealth and Humana, which saw declines of 19% and 21% respectively [2][6]. - Burry's investment in Molina is characterized as a contrarian play, with him labeling it a "generational buy" [3]. Group 2: Financial Performance - Approximately 75% of Molina's revenue is derived from Medicaid, which has allowed the company to maintain profitability despite competitors facing losses in similar contracts [4]. - Molina has demonstrated disciplined operations and conservative accounting practices, contributing to its financial stability [4]. Group 3: Market Position and Future Outlook - Burry's exit from UnitedHealth occurred just before a significant 20% drop in its stock price, indicating timely decision-making [7]. - Molina's stock broke above its 100-day moving average and entered a winning streak, surging over 13% in early January [7]. - Burry has suggested that Molina could be an attractive acquisition target, indicating a strong potential for long-term growth [7].

Core Viewpoint - The stock prices of major U.S. health insurance companies have experienced significant declines in pre-market trading on January 27, with Humana dropping 17%, Elevance Health falling 8%, Centene decreasing by 7.7%, and Molina Healthcare declining by 7.3% [1] Company Summary - Humana's stock price decreased by 17% in pre-market trading [1] - Elevance Health's stock price fell by 8% in pre-market trading [1] - Centene's stock price declined by 7.7% in pre-market trading [1] - Molina Healthcare's stock price dropped by 7.3% in pre-market trading [1] Industry Summary - The health insurance industry is facing a downturn, as evidenced by the significant stock price drops of major companies [1]

Group 1 - The U.S. government proposed an average increase of only 0.09% in Medicare payments to insurance companies for the next year, leading to a significant drop in stock prices for Medicare insurers [1] - The Centers for Medicare & Medicaid Services (CMS) indicated that the proposal would provide an additional payment of over $700 million for Medicare Advantage plans in 2027 [1] - Major insurance companies such as UnitedHealth, CVS, and Humana saw their stock prices decline by nearly 12% in after-hours trading, while Elevance Health and Molina Healthcare experienced a drop of nearly 5% [1]