Molina Healthcare Q1 Earnings Beat Estimates on Growing Premiums

Molina Healthcare Inc. MOH reported first-quarter 2025 adjusted earnings per share (EPS) of $6.08, which beat the Zacks Consensus Estimate of $5.86. Also, the bottom line grew 6.1% from the year-ago period. (See the Zacks Earnings Calendar to stay ahead of market-making news.)Total revenues amounted to $11.15 billion, which improved 12.2% year over year. The top line also marginally beat the consensus mark.The strong first-quarter results benefited from rising premiums and rate hikes but were partially offset by medical care costs. Molina Healthcare, Inc Price, Consensus and EPS Surprise Molina Healthcare, Inc price-consensus-eps-surprise-chart | Molina Healthcare, Inc QuoteMOH’s Q1 Operational UpdatePremium revenues of $10.63 billion increased 11.8% year over year in the quarter under review and beat the Zacks Consensus Estimate of $10.61 billion. The improvement stemmed from contract wins, buyouts, rate hikes and an expanding nationwide footprint, partly offset by Medicaid redeterminations.As of March 31, 2025, total membership improved 0.4% year over year to around 5.8 million but missed the Zacks Consensus Estimate by 3.3%. The health insurer witnessed year-over-year increases in customers within its Medicare and Marketplace businesses.Investment income remained the same year over year at $108 million but beat the consensus mark of $102.1 million.Total operating expenses of $10.7 billion increased 12.7% year over year and were marginally higher than our model estimate of $10.6 billion due to a rise in medical care costs coupled with higher general and administrative expenses. The adjusted general and administrative expense ratio decreased to 6.8% in the first quarter from 7.1% a year ago. Interest expenses of $43 million rose from $27 million in the prior year.The consolidated medical care ratio (medical costs as a percentage of premium revenues), or MCR, was 89.2% in the quarter under review. The metric rose from 88.5% a year ago and was higher than the consensus mark of 88.5%. Also, the figure was higher than our estimate of 88.4%.Molina Healthcare’s adjusted net income decreased 0.3% year over year to $333 million.MOH’s Financial Update (as of March 31, 2025)Molina Healthcare exited the first quarter with cash and cash equivalents of $4.9 billion, which jumped from the 2024-end level of $4.7 billion. Total assets of $16.4 billion rose from $15.6 billion at 2024-end.Long-term debt of $3.6 billion rose from $2.9 billion at 2024-end.Total stockholders’ equity of $4.3 billion decreased from the $4.5 billion figure at 2024-end.Net cash provided by operating activities amounted to $190 million in the first quarter of 2025 compared with $214 million in the prior year. MOH’s 2025 Guidance Reaffirmed Management still expects premium revenues to be around $42 billion, which indicates an improvement of around 9% from the 2024 reported figure. Adjusted EPS is still forecasted at a minimum of $24.50 this year, which implies a rise of roughly 8% from the 2024 figure. The company’s expanding legacy footprint and continued realization of new store-embedded earnings are likely to support growth.Adjusted net income is now projected to be $1.33 billion, while GAAP net income is expected to be $1.21 billion for 2025. Total membership was earlier estimated to be 5.9 million by 2025-end. Consolidated MCR was likely to stay at 88.7%. It also expected that the effective tax rate would be 25.3% in 2025.MOH’s Zacks Rank & Key PicksMOH currently carries a Zacks Rank #4 (Sell).Some better-ranked stocks in the broader medical space are Aveanna Healthcare Holdings Inc. AVAH, Addus Homecare Corporation ADUS and Option Care Health, Inc. OPCH, each sporting a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.The Zacks Consensus Estimate for Aveanna Healthcare’s current-year earnings of 12 cents per share has witnessed one upward revision in the past month against none in the opposite direction. Aveanna Healthcare beat earnings estimates in each of the trailing four quarters, with the average surprise being 163.3%. The consensus estimate for current-year revenues is pegged at $2.1 billion, implying 4.6% year-over-year growth.The Zacks Consensus Estimate for Addus HomeCare’s current-year earnings is pegged at $6.04 per share. It has remained stable over the past week. Addus HomeCare beat earnings estimates in each of the trailing four quarters, with the average surprise being 5.8%. The consensus estimate for current-year revenues is pegged at $1.4 billion, implying 21.2% year-over-year growth.The Zacks Consensus Estimate for Option Care Health’s current-year earnings of $1.68 per share has witnessed six upward revisions in the past 60 days against no movement in the opposite direction. Option Care Health beat earnings estimates in each of the trailing four quarters, with the average surprise being 15.9%. The consensus estimate for current-year revenues is pegged at $5.4 billion, calling for 8.9% year-over-year growth.Zacks Names #1 Semiconductor StockIt's only 1/9,000th the size of NVIDIA which skyrocketed more than +800% since we recommended it. NVIDIA is still strong, but our new top chip stock has much more room to boom.With strong earnings growth and an expanding customer base, it's positioned to feed the rampant demand for Artificial Intelligence, Machine Learning, and Internet of Things. Global semiconductor manufacturing is projected to explode from $452 billion in 2021 to $803 billion by 2028.See This Stock Now for Free >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Molina Healthcare, Inc (MOH): Free Stock Analysis Report Addus HomeCare Corporation (ADUS): Free Stock Analysis Report Option Care Health, Inc. (OPCH): Free Stock Analysis Report Aveanna Healthcare Holdings Inc. (AVAH): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks