Molina Healthcare (MOH): Should You Purchase, Sell, or Retain After Q4 Results?

Molina Healthcare’s Recent Stock Performance

In the last half-year, shares of Molina Healthcare have declined by 16.6%, currently priced at $145.75. This drop stands in stark contrast to the S&P 500, which gained 6.5% during the same period. The decline is partly attributed to weaker-than-expected quarterly earnings, leaving investors to consider their next steps.

With this recent downturn, could this be a favorable moment to invest in MOH?

What Makes Molina Healthcare a Topic of Discussion?

Established in 1980 to serve underserved populations in Southern California, Molina Healthcare (NYSE:MOH) now delivers managed healthcare services to low-income individuals through Medicaid, Medicare, and Marketplace plans in 21 states.

Key Strengths of Molina Healthcare

1. Impressive Revenue Growth

Assessing a company’s long-term sales trajectory provides valuable insight into its business quality. While any company can have a few strong quarters, sustained growth over several years is more telling. Molina Healthcare has achieved an outstanding 18.7% compound annual growth rate in revenue over the past five years, outperforming the average healthcare company and demonstrating strong demand for its services.

2. Scale Provides Competitive Advantages

Larger organizations often benefit from economies of scale, allowing them to spread fixed costs—such as infrastructure, technology, and administration—across a greater volume of services, thereby lowering per-unit costs. This scale can also enhance negotiating power with suppliers, boost brand recognition, and provide more resources for investment. When leveraged effectively, these advantages can create a positive feedback loop for growth.

With $45.43 billion in revenue over the past year, Molina Healthcare enjoys significant scale. While it may not match industry giants like UnitedHealth Group or The Cigna Group in size, its substantial presence remains a key asset in the highly regulated and complex healthcare sector.

Potential Concern: Customer Growth Stalls

Customer Numbers Remain Flat

Revenue expansion depends on both attracting more customers and increasing the average revenue per customer. Growing the customer base opens up more opportunities for cross-selling, while higher spending per customer reflects successful upselling strategies.

In the past two years, Molina Healthcare’s total membership has remained steady at 5.49 million as of the latest quarter. This stagnation suggests difficulties in securing new contracts and may indicate rising competition or a saturated market.

Final Thoughts

Despite some uncertainties, Molina Healthcare holds significant promise. Following the recent decline, the stock is trading at 21.8 times forward earnings (or $145.75 per share). Is this a buying opportunity?

Other Top Stock Picks to Consider

Relying on just four stocks for your portfolio can be risky. Now is a critical time to secure high-quality investments before the market broadens and prices rise.

Don’t wait for the next market shakeup. Discover our Top 6 Stocks for this week—a curated selection of high-quality stocks that have delivered a remarkable 244% return over the past five years (as of June 30, 2025).

This list features well-known names like Nvidia, which soared 1,326% from June 2020 to June 2025, as well as lesser-known companies such as Tecnoglass, which achieved a 1,754% five-year return.