It has been about a month since the last earnings report for Molina (MOH). Shares have added about 9.2% in that time frame, outperforming the S&P 500.
But investors have to be wondering, will the recent positive trend continue leading up to its next earnings release, or is Molina due for a pullback? Well, first let's take a quick look at its most recent earnings report in order to get a better handle on the recent drivers for Molina Healthcare, Inc before we dive into how investors and analysts have reacted as of late.
Molina Healthcare Q2 Earnings Miss on Rising Medical Care Costs
Molina Healthcare reported second-quarter 2025 adjusted earnings per share (EPS) of $5.48, which marginally missed the Zacks Consensus Estimate of $5.50. Also, the bottom line fell 6.5% from the year-ago period.
Total revenues amounted to $11.4 billion, which improved 15.7% year over year. The top line also beat the consensus mark by 5.4%.
The quarterly revenues were aided by rising premiums and rate hikes, but were partially offset by higher medical care costs and general and administrative expenses.
MOH’s Q2 Operational Update
Premium revenues of $10.9 billion increased 15% year over year in the quarter under review and beat the Zacks Consensus Estimate of $10.4 billion. The improvement stemmed from contract wins, buyouts, rate hikes and an expanding nationwide footprint, partly offset by Medicaid redeterminations.
As of June 30, 2025, total membership improved 3% year over year to around 5.7 million but missed the Zacks Consensus Estimate by 0.8%. The health insurer witnessed year-over-year increases in customers within its Medicare and Marketplace businesses.
Investment income declined 7.8% year over year to $106 million but beat the consensus mark of $101 million.
Total operating expenses of $11.1 billion increased 17% year over year and were higher than our model estimate of $10.2 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 6.1% in the second quarter from 6.9% a year ago. Interest expenses of $48 million rose from $28 million in the prior year.
The consolidated medical care ratio (medical costs as a percentage of premium revenues), or MCR, was 90.4% in the quarter under review. The metric rose from 88.6% a year ago and was higher than the consensus mark of 88.9%. Also, the figure was higher than our estimate of 89%.
Molina Healthcare’s adjusted net income decreased 13.8% year over year to $294 million.
MOH’s Financial Update (As of June 30, 2025)
Molina Healthcare exited the second quarter with cash and cash equivalents of $4.5 billion, which declined from the 2024-end level of $4.7 billion. Total assets of $16.2 billion rose from $15.6 billion at 2024-end.
Long-term debt of $3.4 billion rose from $2.9 billion at 2024-end.
Total stockholders’ equity of $4.6 billion increased from the $4.5 billion figure at 2024-end.
Net cash used in operating activities amounted to $112 million in the first half of 2025 compared with $5 million in the prior year.
MOH’s 2025 Guidance
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 now forecasted to be at least $19 this year, which implies a reduction from its prior forecast figure of at least $24.50. 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 $1.028 billion, while GAAP net income is expected to be $912 million for 2025. Total membership was earlier estimated to be 5.9 million by 2025-end. Consolidated MCR is likely to stay at 90.2%. It is also expected that the effective tax rate would be 25.3% in 2025.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in estimates review.
The consensus estimate has shifted -35.62% due to these changes.
VGM Scores
At this time, Molina has a poor Growth Score of F, a score with the same score on the momentum front. However, the stock was allocated a grade of B on the value side, putting it in the second quintile for value investors.
Overall, the stock has an aggregate VGM Score of D. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. It's no surprise Molina has a Zacks Rank #5 (Strong Sell). We expect a below average return from the stock in the next few months.
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Molina Healthcare, Inc (MOH): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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