MOH

Healthcare

Molina Healthcare

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Market Data

Financials

XBRL · SEC EDGAR

2010–2025(16yr)

Revenue

Net Income

Free CF

Metric	FY 2010	FY 2011	FY 2012	FY 2013	FY 2014	FY 2015	FY 2016	FY 2017	FY 2018	FY 2019	FY 2020	FY 2021	FY 2022	FY 2023	FY 2024	FY 2025Latest	YoY
Revenue	$4.1B	$4.8B	$6.0B	$6.6B	$9.7B	$14.2B	$17.8B	$19.9B	$18.9B	$16.8B	$19.4B	$27.8B	$32.0B	$34.1B	$40.6B	$45.4B	+11.7%
Gross Profit	—	—	—	$843.0M	$1.0B	$1.5B	$1.7B	$1.8B	$2.5B	$2.3B	$2.5B	$4.1B	$4.8B	$5.4B	$6.2B	$5.9B	-4.6%
Gross Margin	—	—	—	12.8%	10.3%	10.6%	9.4%	9.1%	13.3%	13.7%	12.8%	14.6%	15.0%	15.9%	15.3%	13.1%	-2.2pp
Operating Income	$105.0M	$80.2M	$35.5M	$136.6M	$192.9M	$387.0M	$306.0M	-$555.0M	$1.1B	$1.0B	$1.1B	$1.0B	$1.2B	$1.6B	$1.7B	$781.0M	-54.2%
Operating Margin	2.6%	1.7%	0.6%	2.1%	2.0%	2.7%	1.7%	-2.8%	6.0%	6.2%	5.6%	3.7%	3.7%	4.6%	4.2%	1.7%	-2.5pp
Net Income	$55.0M	$20.8M	$9.8M	$52.9M	$62.2M	$143.0M	$52.0M	-$512.0M	$707.0M	$737.0M	$673.0M	$659.0M	$792.0M	$1.1B	$1.2B	$472.0M	-60.0%
Net Margin	1.3%	0.4%	0.2%	0.8%	0.6%	1.0%	0.3%	-2.6%	3.7%	4.4%	3.5%	2.4%	2.5%	3.2%	2.9%	1.0%	-1.9pp
Free Cash Flow	—	—	—	—	$945.3M	$993.0M	$497.0M	$718.0M	-$344.0M	$370.0M	$1.8B	$2.0B	$682.0M	$1.6B	$544.0M	-$636.0M	-216.9%
FCF Margin	—	—	—	—	9.8%	7.0%	2.8%	3.6%	-1.8%	2.2%	9.3%	7.4%	2.1%	4.6%	1.3%	-1.4%	-2.7pp
EPS (Diluted)	$1.32	$0.45	$0.21	$1.13	$1.29	$2.58	$0.92	$-9.07	$10.61	$11.47	$11.23	$11.25	$13.55	$18.77	$20.42	$8.92	-56.3%

Total Debt$3.8B

Cash & Equiv.$4.2B

Net Cash$482.0M

3 min read

1. THE BIG PICTURE

Molina Healthcare is a high-volume, low-margin specialist that lives or dies by its ability to manage care for government-sponsored populations more efficiently than the states can themselves. It is currently trapped in a cyclical squeeze where the "pure-play" focus that usually provides specialized efficiency has instead created a bottleneck, as fixed-rate contracts fail to keep pace with a rapid escalation in medical cost trends.

2. WHERE THE RISKS HIT HARDEST

Molina’s "pure-play" focus on government programs (10-K Item 1) is directly threatened by "Inadequate Medicaid Rates" (Risks). Because premium revenues are fixed by contract, Molina Healthcare’s specialized low-cost structure is insufficient to protect profits when state-set rates lag behind actual cost trends. This vulnerability is magnified by "Contract Concentration" (Risks); Molina Healthcare’s reliance on just four states for 54% of its Medicaid premium revenue means that a single adverse regulatory shift or a botched RFP in a major market like California or New York would fundamentally break the business model.

3. WHAT THE NUMBERS SAY TOGETHER

While Molina ranks second among peers in revenue growth at 11.7% (Peer Benchmarking), its recent $160 million quarterly net loss (8-K) proves that scale is currently decoupled from profitability. The 2.2% net margin (XBRL) provides almost no cushion for the "adverse medical cost acuity shift" management expects from upcoming legislative changes (10-K Item 1). Short interest at 9.7% of the float (Supplemental Signals) suggests that a significant portion of the market is betting against Molina Healthcare’s ability to manage this "trough year." This skepticism persists despite Molina leading its peer group with a 20.6% buyback yield, a massive capital return program that appears to be the only mechanism sustaining earnings growth while operating margins remain compressed at 3.2%.

4. IS IT WORTH IT AT THIS PRICE?

At 13.8x Forward P/EP/EPrice-to-Earnings ratio — share price divided by annual earnings per share; how much investors pay per dollar of profit. Higher P/E = higher growth expectations, Molina is trading at fair value, exactly in line with the peer median (Peer Benchmarking). According to the (CAPM analysis), the market is pricing in 0.0% long-term growth. This stagnant outlook is supported by management’s own guidance of a 0.5% GAAPGAAPGenerally Accepted Accounting Principles — the standard U.S. accounting rules all public companies must follow pre-tax margin for 2026 and the planned exit from the Medicare Advantage Part D product (8-K).

The current valuation is only justifiable if Molina Healthcare’s 20.6% buyback yield can continue to manufacture EPSEPSEarnings Per Share — the company's net profit divided by its share count; the most common per-share profitability metric growth in the absence of organic profit expansion. However, the sensitivity of the business is such that if the medical care ratio rises just one point above the 91.7% baseline, net income per share would collapse from $8.92 to $2.72 (Risks). Investors are paying a median multiple for a business that is currently one percentage point away from a 69% earnings decline.

5. WHAT WOULD CHANGE THIS VIEW?

Cautious if the 2026 Medical Care Ratio (MCR) exceeds the guided 92.6%, which would indicate that the "trough" in Medicaid margins is deeper or longer than management’s current projections.
Constructive if the strategic exit from the traditional Medicare Advantage Part D product in 2027 results in a measurable expansion of the 0.5% pre-tax margin guidance.

6. BOTTOM LINE

Structural Advantage: A specialized administrative infrastructure designed for low-cost management of high-acuity, government-sponsored populations and a consistent track record of winning state RFPs.

Bottom Line: Molina is a precarious bet on financial engineering via buybacks to bridge the gap until Medicaid premium rates eventually catch up to medical inflation.

Source: Synthesis · LLM Analysis

4 min read

1. Top 5 Material Risks

Inadequate Medicaid Rates: Premium revenues are fixed by contract, and Molina Healthcare is obligated to provide services regardless of rising medical costs. If state-set rates do not keep pace with medical care cost trends or utilization, medical margins are compressed or eliminated.
Medical Care Ratio Sensitivity: Profitability depends on the ability to manage medical care costs. A one-percentage-point increase in the 2025 medical care ratio (from 91.7% to 92.7%) would have reduced net income per diluted share from $8.92 to approximately $2.72.
Contract Concentration: Molina Healthcare derives 75% of its consolidated premium revenue from Medicaid. Its top four health plans (California, New York, Texas, and Washington) generated $17.3 billion in aggregate Medicaid premium revenue in 2025, representing 54% of total Medicaid premium revenue.
Marketplace Volatility: The Marketplace business is highly sensitive to price and subject to annual programmatic changes. The expiration of advanced premium tax credits (APTCs) at the end of 2025 and the potential non-renewal of subsidies starting in 2026 create uncertainty regarding enrollment and financial performance.
Regulatory and Contractual Uncertainty: Many contracts contain complex provisions regarding medical cost expenditure floors, profit ceilings, and quality withholds. Disagreements with government agencies over the interpretation of these provisions can lead to retroactive rate adjustments or recoupments.

2. Company-Specific Risks

Acquisition Integration: Growth strategy relies on inorganic acquisitions, which are complex and costly to integrate. Failure to realize anticipated synergies or the emergence of undisclosed liabilities could negatively impact financial results.
Provider Insolvency: Many primary care physicians are paid on a capitated basis. If these providers become insolvent, Molina Healthcare may be held liable for unpaid referral claims, creating immediate financial risk and potential service disruption.
Administrative Cost Leverage: Many administrative costs are fixed. If contracts representing a significant portion of revenue are lost, Molina Healthcare may be unable to reduce centralized service expenses proportionally, leading to a decline in percentage margins.
Geographic Concentration: Corporate headquarters and certain claims processing functions are located in Long Beach, California, exposing Molina Healthcare to potential operational disruption from major earthquakes or wildfires.

3. Regulatory/Legal Risks

Fraud and Abuse Laws: Molina Healthcare is subject to the federal False Claims Act and anti-kickback statutes. Qui tam actions, which allow private relators to receive 15% to 30% of government recoveries, have increased, leading to higher defense costs and potential debarment from government programs.
Data Privacy and Security: Molina Healthcare processes sensitive Personal Information and protected health information (PHI). Failure to comply with HIPAA, the CCPA, or the GLBA—or a security breach involving third-party vendors—could result in significant fines, regulatory investigations, and class-action litigation.
Medicare Star Ratings: CMS evaluates Medicare plans using a Star Rating System. Plans with less than a 3.0 rating for three consecutive years face contract non-renewal, which would negatively impact revenue and the ability to offer competitive benefits.
AI Regulation: New state laws, such as California’s regulations on automated decision-making, and evolving federal policies regarding AI create uncertainty. Compliance with these shifting standards may require significant resource expenditure.

4. Financial Impact Map

Inadequate Medicaid Rates → Premium Revenue → Fixed monthly payments may be insufficient to cover rising medical care costs.

Medical Care Ratio Sensitivity → Net Income per Diluted Share → A 1% increase in the medical care ratio would have resulted in a $6.20 decrease in net income per diluted share for 2025.

Contract Concentration → Premium Revenue → Loss of contracts in top states (CA, NY, TX, WA) would materially reduce total revenue.

Goodwill and Intangible Asset Impairment → Goodwill and Intangible Assets, net → As of December 31, 2025, Molina Healthcare held $1,958 million in goodwill and $237 million in net intangible assets; failure to meet performance targets could trigger non-cash impairment charges.

Dividend Restrictions → Cash Flows → Health plan subsidiaries are subject to state regulations that limit dividend payments to the parent company, which could restrict the ability to meet debt service obligations.

Source: 10-K Item 1A · LLM Analysis

Recent Filings

Form	Filed	Period
10-K	Feb 2026	Dec 2025
8-K	Feb 2026	—
10-Q	Oct 2025	Sep 2025
14A	Mar 2025	—