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Molina Healthcare's (MOH) Q1 Earnings: What's in Store?

Zacks Equity Research

Molina Healthcare, Inc MOH is scheduled to report first-quarter 2020 results on Apr 29.

Q1 Earnings & Revenue Expectations 

The Zacks Consensus Estimate for Molina Healthcare’s earnings of $3.02 per share in the first quarter implies a 0.7% dip from the prior-year reported number. Likewise, the consensus estimate for sales of $4.42 billion suggests a 7.5% improvement from the year-ago reported figure.

Factors Affecting Q1 Earnings

The company’s earnings are likely to have been affected by its weak Marketplace business. Its total Medicaid membership is expected to have suffered a decline due to loss of contracts.

Per the company’s last earnings call, management expected first-quarter earnings per share to fall below 25% of full-year guidance ($11.20-$11.70 per share), which is lower than $2.86. This downside was due to the leap-year effect and caption actions timings.

The consensus mark for ending membership by health plan (Puerto Rico) indicates a decrease of 14.5% from the year-ago reported figure.

Nonetheless, Molina Healthcare’s revenues are likely to have witnessed an upside on the back of its premium growth .

Molina Healthcare is likely to have benefited from attractive cash-flow generation in the to-be-reported quarter owing to balance sheet strength.
However, the company is likely to have gained from a fall in expenses on the back of lower Medical care costs and zero cost of service revenues.

What the Quantitative Model Predicts

Our proven model predicts an earnings beat for Molina Healthcare this reporting cycle. The combination of a positive Earnings ESP  and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of beating estimates. You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.

Earnings ESP: Molina Healthcare has an Earnings ESP of +9.38%. This is because the Most Accurate Estimate is pegged at $3.30, higher than the Zacks Consensus Estimate of $3.02. You can see the complete list of today’s Zacks #1 Rank stocks here.

Molina Healthcare, Inc Price and EPS Surprise

Molina Healthcare, Inc Price and EPS Surprise
Molina Healthcare, Inc Price and EPS Surprise

Molina Healthcare, Inc price-eps-surprise | Molina Healthcare, Inc Quote

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Zacks Rank: Molina Healthcare carries a Zacks Rank #3. Further, a positive ESP increases the odds of a positive surprise this time around.

Q4 Highlights and Surprise History

Molina Healthcare’s fourth-quarter 2019 adjusted earnings of $2.73 per share surpassed the Zacks Consensus Estimate by 4.2% on the back of declining expenses. However, the bottom line fell 29.6% year over year, mainly due to lower revenues.

Its surprise record is impressive, beating on earnings in all the trailing four quarters, the average being 13.8%.

Other Stocks to Consider

Here are a few other stocks worth considering from the medical sector with the perfect mix of elements to also beat on earnings in the respective upcoming releases:

Centene Corporation CNC has an Earnings ESP of +21.25% and a Zacks Rank of 3. The company is scheduled to release first-quarter earnings on Apr 28.

Anthem Inc. ANTM is set to report first-quarter earnings on Apr 29. The stock is #3 Ranked and has an Earnings ESP of +1.28%.

Humana Inc. HUM is slated to announce first-quarter earnings on Apr 29. The stock has an Earnings ESP of +11.37% and a Zacks Rank #3.

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Humana Inc. (HUM) : Free Stock Analysis Report
 
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Anthem, Inc. (ANTM) : Free Stock Analysis Report
 
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