2 Reasons to Like MOH and 1 to Stay Skeptical

September 11, 2025 at 00:05 AM EDT

MOH Cover Image

Molina Healthcare’s stock price has taken a beating over the past six months, shedding 44.8% of its value and falling to $179.15 per share. This was partly due to its softer quarterly results and may have investors wondering how to approach the situation.

Following the drawdown, is now an opportune time to buy MOH? Find out in our full research report, it’s free.

Why Does Molina Healthcare Spark Debate?

Founded in 1980 as a provider for underserved communities in Southern California, Molina Healthcare (NYSE: MOH) provides managed healthcare services primarily to low-income individuals through Medicaid, Medicare, and Marketplace insurance programs across 21 states.

Two Positive Attributes:

1. Skyrocketing Revenue Shows Strong Momentum

Reviewing a company’s long-term sales performance reveals insights into its quality. Any business can have short-term success, but a top-tier one grows for years. Luckily, Molina Healthcare’s sales grew at an impressive 19.7% compounded annual growth rate over the last five years. Its growth surpassed the average healthcare company and shows its offerings resonate with customers.

2. Economies of Scale Give It Negotiating Leverage with Suppliers

Larger companies benefit from economies of scale, where fixed costs like infrastructure, technology, and administration are spread over a higher volume of goods or services, reducing the cost per unit. Scale can also lead to bargaining power with suppliers, greater brand recognition, and more investment firepower. A virtuous cycle can ensue if a scaled company plays its cards right.

With $43.41 billion in revenue over the past 12 months, Molina Healthcare boasts impressive economies of scale. It may not be as large as heavyweights such as UnitedHealth Group and The Cigna Group from a topline perspective, but its heft is still an important advantage in a healthcare industry that is heavily regulated, complex, and resource-intensive.

One Reason to be Careful:

Weak Customer Growth Points to Soft Demand

Revenue growth can be broken down into the number of customers and the average spend per customer. Both are important because an increasing customer base leads to more upselling opportunities while the revenue per customer shows how successful a company was in executing its upselling strategy.

Molina Healthcare’s total customers came in at 5.75 million in the latest quarter, and over the last two years, their count averaged 4.2% year-on-year growth. This performance slightly lagged the sector and suggests that increasing competition is causing challenges in landing new contracts. Molina Healthcare Total Customers

Final Judgment

Molina Healthcare has huge potential even though it has some open questions. With the recent decline, the stock trades at 7.7× forward P/E (or $179.15 per share). Is now a good time to buy? See for yourself in our full research report, it’s free.

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