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Molina (MOH) Outpaces Stock Market Gains: What You Should Know

Zacks Equity Research
CyberArk (CYBR) closed the most recent trading day at $139.46, moving -0.18% from the previous trading session.

Molina (MOH) closed the most recent trading day at $155.28, moving +1.27% from the previous trading session. The stock outpaced the S&P 500's daily gain of 0.61%. Meanwhile, the Dow gained 0.71%, and the Nasdaq, a tech-heavy index, added 0.53%.

Heading into today, shares of the provider of Medicaid-related services had gained 18.45% over the past month, outpacing the Medical sector's loss of 1.29% and the S&P 500's loss of 3.77% in that time.

Investors will be hoping for strength from MOH as it approaches its next earnings release. In that report, analysts expect MOH to post earnings of $2.55 per share. This would mark year-over-year growth of 13.33%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $4.07 billion, down 16.57% from the year-ago period.

MOH's full-year Zacks Consensus Estimates are calling for earnings of $10.94 per share and revenue of $16.39 billion. These results would represent year-over-year changes of +3.11% and -13.23%, respectively.

It is also important to note the recent changes to analyst estimates for MOH. These recent revisions tend to reflect the evolving nature of short-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an actionable rating system.

The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate has moved 0.14% higher. MOH currently has a Zacks Rank of #1 (Strong Buy).

Digging into valuation, MOH currently has a Forward P/E ratio of 14.01. Its industry sports an average Forward P/E of 14.35, so we one might conclude that MOH is trading at a discount comparatively.

Meanwhile, MOH's PEG ratio is currently 1.06. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. The Medical - HMOs industry currently had an average PEG ratio of 1.04 as of yesterday's close.

The Medical - HMOs industry is part of the Medical sector. This group has a Zacks Industry Rank of 5, putting it in the top 2% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

You can find more information on all of these metrics, and much more, on Zacks.com.


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