Michael Burry Doubles Down on Molina Healthcare Stock. What Is the Bull Case for MOH Here?

Core Viewpoint - Famed investor Michael Burry has expressed a bullish stance on Molina Healthcare (MOH), contrasting it with his bearish view on Palantir (PLTR) [1] Company Overview - Molina Healthcare, founded in 1980, provides managed health care services primarily for low-income individuals and families, seniors, and those eligible for government-funded programs like Medicaid and Medicare, serving approximately 5.6 million members [2] - The company's market capitalization currently stands at $7.9 billion, having experienced a significant pullback of nearly 50% in 2025 [2] Financial Performance - Molina's Q3 earnings saw a dramatic decline of 69.4% year-over-year, reporting earnings of $1.84, which fell short of the consensus estimate of $3.90, attributed to challenges in the Medicare and Marketplace segments [3] - The company reported revenues of $11.48 billion in Q3, marking an 11% increase from the previous year, with core premium revenues rising by 11.8% to $10.84 billion [4] - Over the past decade, Molina has achieved compound annual growth rates (CAGRs) of 12.90% in revenue and 19.69% in earnings, with analysts projecting forward revenue growth of 11.37%, surpassing the sector median of 7.61% [4] Operational Metrics - The medical care ratio (MCR) increased to 92.6% from 89.2% in the quarter, indicating a higher percentage of premium revenue spent on medical claims and healthcare services, which is generally viewed as a negative trend [5] - Molina's cash position remains robust, closing the quarter with a cash balance of $4.2 billion and no short-term debt; however, there was a net cash outflow of $237 million from operating activities in the first nine months of 2025, contrasting with an inflow of $868 million in the same period the previous year [6]