Assessing Molina Healthcare After Share Price Falls Over 40% in 2025

If you’ve been debating whether to hold onto Molina Healthcare stock or take action, you’re not alone. This year has been nothing short of a rollercoaster for shareholders. The company’s share price has slid by 15.2% over the past week, down 14.4% in just the last month, and is now sitting a dramatic 43.1% lower year-to-date. If you widen your lens even further, Molina’s 1-year loss clocks in at almost 50%. Those are big moves, enough to make anyone double-check their conviction or jump into research mode.

But what’s behind it all? Much of this turbulence traces back to shifting regulatory conditions and an increasingly competitive environment in managed care. Molina, known for its focus on government-sponsored healthcare programs, has faced heightened scrutiny around Medicaid contract awards in several states. On top of that, increased costs and payment uncertainties have put pressure on the entire sector, and Molina hasn’t been spared.

So, where does that leave us on valuation? Our systematic review gives Molina a value score of 5, meaning it’s considered undervalued in five out of six key checks. That’s a standout result and hints at significant upside if the business can navigate through near-term uncertainty.

In this next section, I’ll break down just how that value score was determined, and walk through each of the main methods we use to assess whether a stock is trading below its true potential. Plus, stick with me, because at the end I’ll reveal the approach that could give us an even clearer answer on Molina’s real worth.

Why Molina Healthcare is lagging behind its peers

Approach 1: Molina Healthcare Discounted Cash Flow (DCF) Analysis

The Discounted Cash Flow (DCF) model is a foundational tool for valuing companies by projecting their future cash flows and discounting them back to the present using an appropriate rate. This approach aims to estimate what a company is truly worth today, based on its ability to generate cash in the future.

For Molina Healthcare, the most recent reported Free Cash Flow stands at negative $573 Million. Looking ahead, analysts expect substantial improvement, with forecasts reaching $1.87 Billion by 2029. While precise analyst estimates typically cap at five years, longer-term projections are extrapolated to paint a fuller picture of potential performance. Over the next ten years, these forecasts suggest an ongoing rise in annual Free Cash Flow, supported by a transition from recent lows to significant future gains.

All calculations are in USD. According to this DCF model, Molina’s intrinsic value is estimated at $992.77 per share. That figure implies the stock trades at an 83.5% discount relative to its fair value, indicating major potential upside for investors willing to navigate the current volatility.

Result: UNDERVALUED

Head to the Valuation section of our Company Report for more details on how we arrive at this Fair Value for Molina Healthcare.

Our Discounted Cash Flow (DCF) analysis suggests Molina Healthcare is undervalued by 83.5%. Track this in your watchlist or portfolio, or discover more undervalued stocks.

Approach 2: Molina Healthcare Price vs Earnings

The Price-to-Earnings (PE) ratio is a widely used valuation tool for companies that are generating profits. It allows investors to see how much they are paying for each dollar of current earnings. For profitable businesses like Molina Healthcare, the PE ratio helps put the current share price in context with the company’s ability to generate profits, making it a reliable indicator of general valuation.

It is important to remember that a “normal” or “fair” PE ratio is not one-size-fits-all. Companies with higher expected growth or lower business risks typically command a higher PE ratio, while those with more uncertainty or slower growth tend to trade at a lower multiple. This is why simply comparing PE ratios across companies or industries can sometimes be misleading.

Right now, Molina’s PE ratio sits at 9.5x, which is far below the Healthcare industry average of 21.6x and the peer group average of 29.7x. It is also noticeably lower than what you might expect for a business of this scale and sector. To better anchor our expectations, we look to Simply Wall St’s proprietary “Fair Ratio.” This measure factors in Molina’s growth prospects, profit margins, market size, risks, and industry characteristics. Because the Fair Ratio weighs all these fundamentals together, it offers a more objective perspective than a basic industry or peer comparison. For Molina, the Fair Ratio is 26.2x, which suggests Molina Healthcare’s shares are trading well below what might be considered a reasonable valuation given its profile.

Result: UNDERVALUED

PE ratios tell one story, but what if the real opportunity lies elsewhere? Discover companies where insiders are betting big on explosive growth.

Upgrade Your Decision Making: Choose your Molina Healthcare Narrative

Earlier, we mentioned that there is an even better way to understand valuation, so let’s introduce you to Narratives. Rather than just crunching numbers, a Narrative combines your outlook on a company's future with your specific forecasts for factors such as revenue, earnings growth, profit margins, and expected fair value. Narratives connect what’s happening in the business and industry directly to a financial forecast, allowing you to see how your assumptions influence your sense of what a company is truly worth.

Available directly on Simply Wall St’s platform via the Community page, Narratives let you create, compare, and update your forecast as new developments arise. This makes it easier than ever to decide how you view a stock; just compare your Fair Value to the current market price. When company news, earnings, or regulation changes occur, Narratives adjust dynamically, keeping your perspective sharp and current.

For example, with Molina Healthcare, one Narrative might project steady contract wins and disciplined cost controls, pointing to a Fair Value above $300 per share. Another Narrative could focus on Medicaid funding headwinds and margin risks, resulting in a more cautious Fair Value near $150. Narratives help you capture both optimism and risk in a single, clear decision framework.

Do you think there's more to the story for Molina Healthcare? Create your own Narrative to let the Community know!

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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