雅虎香港財經 Will High Medical Care Ratios Hurt Molina's (MOH) Q1 Earnings?
Molina Healthcare, Inc. MOH is slated to report first-quarter 2024 results on Apr 24, after market close.
Q1 Estimates
The Zacks Consensus Estimate for Molina’s first-quarter earnings per share is pegged at $5.46, which indicates a deterioration of 6% from the prior-year quarter’s reported figure.
The consensus mark for revenues stands at $9.5 billion, suggesting 16.8% growth from the year-ago quarter’s reported number.
Earnings Surprise History
Molina boasts a solid earnings surprise history. Its bottom line beat estimates in each of the trailing four quarters, the average surprise being 7.6%. This is depicted in the chart below:
Molina Healthcare, Inc Price and EPS Surprise
Molina Healthcare, Inc price-eps-surprise | Molina Healthcare, Inc Quote
Factors to Note
The growing customer base in the Medicaid and Medicare businesses of Molina Healthcare is expected to have contributed to premium growth, the most significant contributor to the top line of a health insurer, in the first quarter.
We expect Medicaid premiums to grow 13.1% year over year to $7.2 billion in the to-be-reported quarter. Our estimate for the Medicare premiums is $1.3 billion, up 26.6% year over year.
Numerous contract wins from federal and state authorities, renewal of agreements as well as buyouts are likely to have contributed to membership growth in MOH’s Medicaid and Medicare businesses. An aging U.S. population is likely to have sustained the solid demand for its Medicare plans in the first quarter. However, the disenrollment of members from Medicaid during the redetermination process is expected to have limited the membership figures of the Medicaid business.
Membership growth within the Medicaid business is expected to increase 4.2% year over year, while the same for MOH’s Medicare business is projected to witness 23.4% year-over-year growth.
Marketplace membership, after falling 19.3% year over year in 2023, is expected to grow in each quarter of 2024. We expect the metric to grow 21.4% year over year in the first quarter of 2024. The redetermination process will fuel membership growth in this business. Given the company’s 75% book remains Silver, improved margins might have helped the bottom line in the first quarter. The company aims to focus on its Silver product, which will help it sustain mid-single digit margins.
A favorable interest rate environment is likely to have driven higher investment income, which in turn, is likely to have aided revenue growth in the first quarter. Our estimate for investment income is $96.2 million, which indicates a 35.5% rise year over year.
The medical care ratio (MCR) is expected to have remained high in the to-be-reported quarter due to elevated medical expenses. An uptick in MCR signals lower leftover premiums consequent to the payment of insurance claims. Medicaid MCR is expected to be impacted by the addition of new stores, which operate at a higher MCR in the first year. Rising supplemental benefits might have pushed Medicare MCR higher in the first quarter of 2024. We expect the overall MCR to be 88.6% in the first quarter, which indicates a deterioration of 150 bps year over year.
Besides, a high medical expense level is likely to have hurt the bottom line of Molina Healthcare in the to-be-reported quarter. Our estimate for medical care costs indicates a 16.2% year-over-year increase.
What Our Quantitative Model Predicts
Our proven model does not conclusively predict an earnings beat for Molina this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. However, that’s not the case here, as you see below.
Earnings ESP: Molina Healthcare has an Earnings ESP of 0.00%. You can uncover the best stocks before they’re reported with our Earnings ESP Filter.
Zacks Rank: MOH currently carries a Zacks Rank of 3.
Stocks to Consider
While an earnings beat looks uncertain for Molina Healthcare, here are some companies from the broader Medical space that you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat this time around:
Inspire Medical Systems, Inc. INSP has an Earnings ESP of +18.04% and is a Zacks #1 Ranked player. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Inspire Medical’s bottom line for the to-be-reported quarter has improved 3.1% over the past month. INSP beat earnings estimates in each of the past four quarters, the average surprise being 353.6%.
Edwards Lifesciences Corporation EW has an Earnings ESP of +1.68% and a Zacks Rank #3.
The Zacks Consensus Estimate for Edwards Lifesciences’ bottom line for the to-be-reported quarter indicates 3.2% year-over-year growth. EW beat earnings estimates in two of the past four quarters and met on the other occasions, with an average surprise of 0.8%.
Universal Health Services, Inc. UHS has an Earnings ESP of +8.56% and is a Zacks #2 Ranked player.
The Zacks Consensus Estimate for Universal Health’s earnings per share for the to-be-reported quarter indicates a 34.2% year-over-year jump. UHS beat earnings estimates in each of the past four quarters, the average surprise being 5.9%.
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Universal Health Services, Inc. (UHS) : Free Stock Analysis Report
Edwards Lifesciences Corporation (EW) : Free Stock Analysis Report
Molina Healthcare, Inc (MOH) : Free Stock Analysis Report
Inspire Medical Systems, Inc. (INSP) : Free Stock Analysis Report
