Molina Healthcare Inc.
MOHBusiness Overview
ticker: MOH step: 01 generated: 2026-05-13 source: quick-research
Molina Healthcare, Inc. (MOH) — Business Overview
Business Description
Molina Healthcare is a managed care organization (MCO) focused exclusively on government-sponsored health programs — Medicaid, Medicare, and Marketplace (ACA exchange) — serving approximately 5.6 million members across 19 states as of late 2025. The company contracts with state governments to provide managed care services to Medicaid enrollees (low-income individuals, families, disabled, and dual-eligible populations) in exchange for per-member-per-month (PMPM) capitation payments. FY2025 premium revenue was ~$43.1B (+11% YoY). Molina is the third-largest pure-play Medicaid managed care company in the U.S. after Centene and Anthem.
Revenue Model
Revenue is almost entirely premium-based: state governments pay Molina a fixed monthly capitation rate per enrolled member, and Molina manages the medical costs of that population. Profit is the spread between capitation received and medical costs paid (the Medical Care Ratio or MCR — ideally 85-90%). Revenue grows through three mechanisms: (1) membership growth from new contract wins and expansion in existing states, (2) annual rate increases from state governments tied to actuarial cost trends, and (3) acquisitions of other state MCOs. Revenue is highly predictable; profitability is sensitive to medical cost trends.
Products & Services
- Medicaid (~75-79% of premium revenue): Managed care for low-income adults, children (CHIP), and long-term services and supports (LTSS) for disabled/elderly. Pure capitated model.
- Medicare (~15%): Medicare Advantage plans for low-income seniors, including dual-eligible (Medicare + Medicaid) populations. D-SNP and LTSS products.
- Marketplace (~8-10%): ACA exchange plans in select states for subsidized low-to-moderate income individuals.
- Exiting Medicare Advantage Part D: ~$1B premium product being discontinued for 2027 due to underperformance.
Customer Base & Go-to-Market
State Medicaid agencies are Molina's direct customers — the company wins business through competitive RFP (request for proposal) processes, typically 5-7 year contracts with renewal options. Medicaid members are auto-assigned to plans or self-select. Molina competes in each state against Centene, Elevance (Anthem), UnitedHealth (UnitedHealthcare Community Plan), and regional plans. Contract retention is typically high (70-85%) but new state entries require significant upfront investment.
Competitive Position
Molina is the most pure-play government program MCO among large public companies — nearly 100% government program revenue versus Centene's 80%+ and Elevance's ~50%. This focus provides operational expertise in low-income populations, LTSS, and dual-eligible management that broader MCOs don't prioritize. The company has grown from a California-centric MCO to a national 19-state platform through systematic acquisitions. Recent Florida Medicaid contract win (statewide, ~120,000 members, ~$5B annual premium) was a major competitive win.
Key Facts
- Founded: 1980
- Headquarters: Long Beach, California
- Employees: ~20,000
- Exchange: NYSE
- Sector / Industry: Health Care / Managed Health Care
- Market Cap: ~$8B (down from ~$20B peak; stock down ~65% from 2023 highs)
Financial Snapshot
ticker: MOH step: 04 generated: 2026-05-13 source: quick-research
Molina Healthcare, Inc. (MOH) — Financial Snapshot
Income Statement Summary
| Metric | FY2022 | FY2023 | FY2024 | YoY |
|---|---|---|---|---|
| Revenue | $31.97B | $34.07B | $40.65B | +19.3% |
| MCR (Medical Care Ratio) | ~88% | ~88% | ~90%+ | |
| Operating Margin | ~3.5% | ~3.5% | ~2.5% | |
| Net Income | ~$850M | ~$1.0B | ~$700M | -30% |
| EPS (adjusted diluted) | ~$17.00 | ~$20.88 | ~$18.00 | -14% |
FY2022-FY2023: stable and profitable; MCR managed at ~88%. FY2024: Medicaid cost trends (acuity higher than expected post-COVID, redetermination of ineligible members slower than expected) drove MCR above 90%, compressing margins. FY2025: premium revenue $43.1B (+11%), but negative $535M operating cash flow — a serious deterioration. Q4 2025 reported a loss; FY2026 guidance sharply weaker than consensus.
Cash Flow & Balance Sheet (FY2024/2025)
| Metric | Value |
|---|---|
| Free Cash Flow (FY2023) | ~$1.6B |
| Free Cash Flow (FY2024) | ~$544M (-66% YoY) |
| Operating Cash Flow (FY2025) | -$535M (negative — significant deterioration) |
| Total Debt | ~$3.77B (rising) |
| Cash & Equivalents | ~$4.5B (state-regulated reserves included) |
| MCR Medicaid (FY2025) | 91.8% |
| MCR Medicare (FY2025) | 92.4% |
| MCR Marketplace (FY2025) | 90.6% |
Key Ratios (approximate)
- P/E: ~10x (on depressed 2026 guidance EPS) | EV/EBITDA: ~8x
- Revenue Growth (FY2025): +11% | Premium Revenue: $43.1B
- Net Margin: ~1.5% (at current MCR levels — thin spread business)
- Members: ~5.6M (Sep 2025)
Growth Profile
Molina grew revenue rapidly through 2022-2024 via contract wins (Florida, California expansions) and acquisitions. However, profitability has severely deteriorated: Medicaid MCRs rose above 90% (vs. sustainable ~88%) due to post-COVID utilization normalization, acuity increases in managed LTSS populations, retroactive California Medicaid adjustments, and state rate increases lagging cost trends. The company is in a trough — management's FY2026 guidance implies a recovery to positive cash flow as rates catch up. Medicare Advantage Part D exit (2027) removes ~$1B of an underperforming segment.
Forward Estimates
- FY2026 guidance: Significantly below prior Street estimates — caused 28% stock decline in Feb 2026
- Consensus Hold: 12 analysts; avg. price target ~$167 (modest upside from ~$145-150)
- Q1 2026 actual EPS: beat estimates, stock +9.1%; guidance included in update
- Recovery thesis: MCR normalization in 2027-2028 as state rates catch up to costs
- Risk: Medicaid FMAP federal match rate reductions being discussed in Congress
Deeper Financial Analysis
The fundamental tier adds 9 additional research dimensions for $MOH.