Core Insights - Molina Healthcare, Inc. is a significant player in the managed healthcare services sector, focusing on low-income families and individuals through Medicaid and Medicare programs, with a market cap of $9.6 billion [1][2] Financial Performance - Molina's stock has experienced a significant decline, dropping 50.1% from its 52-week high of $359.97 on April 4, and 39.2% over the past three months, underperforming the Nasdaq Composite's 15% increase during the same period [3] - Year-to-date, Molina's stock is down 38.3%, and it has decreased 49.4% over the past 52 weeks, contrasting with the Nasdaq's 16.4% rise in 2025 and 27.9% increase over the past year [4] - Following the release of mixed Q2 results on July 23, Molina's stock plummeted 16.8%, despite premium collections rising 15.1% year-over-year, leading to a topline of $11.4 billion, which was up 15.7% year-over-year and 5.4% above expectations [5] - The company's adjusted EPS fell by 6.5% to $5.48, missing consensus estimates due to rising medical costs, prompting a reduction in the full-year outlook [6] Competitive Position - Compared to its peer Centene Corporation, Molina has fared better, with Centene experiencing a 46.9% decline in 2025 and a 57.9% drop over the past 52 weeks [6]

Core Viewpoint - Centene Corporation, a major healthcare provider, has experienced significant stock declines due to unexpected enrollment trends and rising patient costs, leading to a withdrawal of its earnings guidance for 2025 [5][6]. Company Overview - Centene Corporation is based in Saint Louis, Missouri, and operates as a healthcare enterprise, providing services to under-insured and uninsured families, commercial organizations, and military families [1]. - The company has a market capitalization of $15.3 billion and operates through various segments including Medicaid, Medicare, Commercial, and Other [1][2]. Stock Performance - Centene's stock has dropped 59.5% from its 52-week high of $77.29, reached on September 17, 2024, and has declined 43.7% over the past three months [3]. - Year-to-date, the stock has decreased by 48.4% and has fallen 56% over the past 52 weeks, significantly underperforming the Health Care Select Sector SPDR Fund (XLV), which only saw a marginal dip [4]. Earnings Guidance and Market Reaction - On July 2, 2025, Centene's stock plummeted 40.4% in a single trading session after the company withdrew its 2025 earnings guidance, citing unexpected enrollment trends and rising patient costs [5]. - The company reduced its adjusted earnings outlook by $2.75 per share, resulting in a loss of approximately $1.8 billion in projections [5]. Operational Challenges - Centene highlighted rising medical costs in its Medicaid business, particularly in behavioral health and high-cost drug categories, as significant pressure points [6]. - The company is adjusting its 2026 ACA rates to reflect higher morbidity assumptions and plans to implement corrective pricing strategies across most states, raising concerns about the sustainability of ACA economics [6].

Core Insights - Centene Corporation (CNC) relies on its Health Benefit Ratio (HBR) as a key profitability measure, with sensitivity to changes in Medicaid and ACA marketplace plans due to their thinner margins [1][2] Group 1: Financial Performance - Centene's HBR increased by 550 basis points in Q2 2025, driven by higher medical costs, lower Marketplace risk adjustment transfers, and a Medicare Advantage premium deficiency reserve [2][9] - The company's shares have declined by 51.5% year to date, underperforming the industry [7] Group 2: Cost Management Strategies - To address rising medical costs, Centene is enhancing utilization management, expanding value-based care contracts, tightening pharmacy cost controls, and pursuing digital efficiency investments [3][9] - Streamlining operations through divestitures is also part of Centene's strategy to maintain operational discipline [3] Group 3: Regulatory Environment - The newly enacted One Big Beautiful Bill Act introduces structural challenges, including cuts to Medicaid funding, stricter verification requirements, and ACA enrollment limits, which may reduce membership and increase administrative costs [4] Group 4: Future Outlook - Balancing medical cost containment with careful enrollment management is crucial for driving profitability, with Centene's scale and government program expertise providing resilience despite near-term margin pressures [5] - The consensus estimate for CNC's 2025 revenues indicates a year-over-year increase, while EPS estimates suggest a decline [12]

Group 1: Market Overview - Changing market themes and sector rotations have left some formerly dominant companies trailing the broader rally, raising questions about whether these "left behind" stocks represent a buying opportunity [1] - Bespoke Investment Group identified large-cap "left behind" stocks, highlighting that some well-known companies have performed poorly recently [2] Group 2: Company-Specific Insights - UnitedHealth Group, facing cost pressures and regulatory challenges, is currently trading at five-year lows, with a 57.4% decline from its 52-week high of $630.73 to $268.92, but analysts believe its market dominance and revenue potential could lead to a recovery [3][7] - Lululemon Athletica has seen a significant drop due to shifting consumer trends and increased competition, yet it retains strong brand equity and growth prospects, particularly in international and male apparel segments, suggesting a potential entry point for long-term investors [4] - The Trade Desk continues to show strong revenue growth despite challenges in the digital advertising sector, with a 61.6% decline from its 52-week high of $141.53, and analysts argue that the stock may be undervalued, presenting an opportunity for investors willing to overlook recent volatility [5][7] Group 3: Investment Strategy - Analysts suggest that some of the identified "left behind" stocks are likely to recover over the next year, emphasizing the investment strategy of buying low and selling high [6]

Core Insights - Centene Corporation (CNC) has experienced a significant decline in share price, losing 56.8% year to date, underperforming compared to its industry, sector, and the Zacks S&P 500 composite [2][3] - The company reported its first quarterly loss in over a decade in Q2 2025, driven by elevated healthcare utilization and medical cost pressures, with a health benefits ratio (HBR) reaching 93% [3][11] - Centene's operating costs surged by 27.4% year over year in Q2 2025, totaling $49.2 billion, primarily due to rising medical, tax, and administrative expenses [11][13] Company Performance - Centene's stock is currently undervalued, trading at a price-to-earnings multiple of 10.14, lower than the industry average of 11.46 [10] - The company has cut its 2025 earnings per share guidance to $1.75 from over $7.00, reflecting the impact of increased healthcare utilization trends [11][14] - Despite growth in Marketplace membership, revenues were negatively affected by a shortfall in anticipated 2025 risk adjustment transfer payments and high medical utilization rates [15] Market Position - Centene holds a significant market share in government-sponsored healthcare, with operations in Medicaid, Medicare Advantage, ACA Marketplace, and more [18] - The company has expanded its footprint through acquisitions over the past decade, which supports long-term revenue growth [18] - The One Big Beautiful Bill Act (OBBB) is expected to introduce approximately $1 trillion in federal Medicaid cuts over the next decade, impacting Centene's operations [22] Financial Metrics - Centene's return on equity (ROE) for the trailing 12 months was 9.7%, underperforming the industry average of 21.1% [23] - The return on invested capital (ROIC) was 6.7%, also lower than the industry average of 9% [24] - Long-term debt stood at $17.6 billion as of June 30, 2025, exceeding cash and cash equivalents of $14.5 billion [17] Analyst Sentiment - The Zacks Consensus Estimate for 2025 earnings indicates a 70% year-over-year decrease, while the estimate for 2026 suggests a 51% increase [25] - Recent consensus estimates for 2025 and 2026 earnings have decreased by 48.3% and 36.2%, respectively, in the past week [25]

Financial Performance - UnitedHealth's Q2 earnings missed expectations at $408 per share [2] - Revenues were slightly ahead of expectations [2] - 2025 earnings forecast is at least $16 per share [3] - Street expectations for 2025 earnings were at least $18 per share [4] Guidance and Outlook - UnitedHealth suspended guidance in May and brought back Steven Hemsley as CEO [3] - The company is facing higher costs, higher utilization, and headwinds in Medicare Advantage plans [4] - Optum Health's Q2 revenues were down 7%, and projected to be down 4% for the full year [4] Market Impact - UnitedHealth's 52-week high is $630 [1][6] - The stock is down approximately 45% year-to-date [6] - UnitedHealth is the biggest drag on the Dow Jones Industrials [7] Challenges - V28 reshuffling of Medicare billing is hurting Optum Health's doctor unit [5]

Financial Performance - UnitedHealth's latest quarter profit was smaller [1] - A metric favored by Wall Street came in below estimates [1]

Financial Performance - Centene Corporation reported total revenues of $48.742 billion for Q2 2025, an increase of 22% from $39.836 billion in Q2 2024 [1] - Premium and service revenues rose 18% to $42.467 billion compared to $35.973 billion in the same period last year [6] - The company experienced a diluted loss per share of $(0.51) for Q2 2025, compared to earnings of $2.16 per share in Q2 2024 [18][29] - Adjusted diluted loss per share was $(0.16) for Q2 2025, down from $2.42 in Q2 2024 [18] Membership Trends - Total at-risk membership as of June 30, 2025, was 28,004,900, an increase from 25,709,600 in 2024 [3] - Traditional Medicaid membership decreased to 11,227,400 from 11,640,900 year-over-year [3] - Marketplace membership increased significantly to 5,862,800 from 4,401,300 in the previous year [3] Cost and Expense Management - The health benefits ratio (HBR) for Q2 2025 was 93.0%, up from 87.6% in Q2 2024, primarily due to increased medical costs [1][12] - Selling, general and administrative (SG&A) expense ratio was 7.1% for Q2 2025, down from 8.0% in Q2 2024, reflecting better expense management [1][12] Cash Flow and Balance Sheet - Cash flow from operations for Q2 2025 was $1.785 billion, driven by improved pharmacy rebate remittance timing [1][12] - As of June 30, 2025, the company had cash, investments, and restricted deposits totaling $37.5 billion, with total debt at $17.6 billion [8][27] Community Engagement and Recognition - Centene has been actively involved in community support, including relief efforts for tornado-affected areas [4] - The company was recognized as one of Newsweek's America's Greatest Workplaces for the third consecutive year [4]

UnitedHealth Group confirmed civil and criminal Justice Department probes and said it was responding to requests from the agency following media reports of probes into its Medicare business https://t.co/3a769kPLzU ...

CNBC contributor Jonathan Kanter joins 'Squawk on the Street' to discuss reactions to the Department of Justice investigation into UnitedHealth's Medicare billing practices. ...