Revenue Beat: Molina Healthcare, Inc. Beat Analyst Estimates By 5.3%

Shareholders might have noticed that Molina Healthcare, Inc. (NYSE:MOH) filed its first-quarter result this time last week. The early response was not positive, with shares down 2.4% to US$352 in the past week. Results overall were respectable, with statutory earnings of US$5.17 per share roughly in line with what the analysts had forecast. Revenues of US$9.9b came in 5.3% ahead of analyst predictions. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.

Check out our latest analysis for Molina Healthcare

Taking into account the latest results, the current consensus from Molina Healthcare's twelve analysts is for revenues of US$39.5b in 2024. This would reflect a solid 14% increase on its revenue over the past 12 months. Statutory earnings per share are predicted to grow 20% to US$21.91. Before this earnings report, the analysts had been forecasting revenues of US$39.5b and earnings per share (EPS) of US$22.37 in 2024. The analysts seem to have become a little more negative on the business after the latest results, given the small dip in their earnings per share numbers for next year.

It might be a surprise to learn that the consensus price target was broadly unchanged at US$416, with the analysts clearly implying that the forecast decline in earnings is not expected to have much of an impact on valuation. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. Currently, the most bullish analyst values Molina Healthcare at US$453 per share, while the most bearish prices it at US$357. Still, with such a tight range of estimates, it suggeststhe analysts have a pretty good idea of what they think the company is worth.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Molina Healthcare's past performance and to peers in the same industry. We can infer from the latest estimates that forecasts expect a continuation of Molina Healthcare'shistorical trends, as the 19% annualised revenue growth to the end of 2024 is roughly in line with the 17% annual growth over the past five years. Compare this with the broader industry, which analyst estimates (in aggregate) suggest will see revenues grow 6.7% annually. So although Molina Healthcare is expected to maintain its revenue growth rate, it's definitely expected to grow faster than the wider industry.

The Bottom Line

The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Molina Healthcare. Fortunately, they also reconfirmed their revenue numbers, suggesting that it's tracking in line with expectations. Additionally, our data suggests that revenue is expected to grow faster than the wider industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.

Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. We have estimates - from multiple Molina Healthcare analysts - going out to 2026, and you can see them free on our platform here.

We don't want to rain on the parade too much, but we did also find 1 warning sign for Molina Healthcare that you need to be mindful of.

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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.