Value
5.3/10data confidence 100%| Component | Sub-score |
|---|---|
| P/E | 2.3 |
| P/S | 10.0 |
| EV/EBITDA | 7.0 |
| Fwd P/E | 6.0 |
| PEG | 4.6 |
| Analyst target | 3.0 |
- ▸Forward P/E: 21.6x
- ▸PEG: 1.88
MOH · Why this verdict
Why Molina Healthcare (MOH) is rated SELL
Updated
Model-generated analysis — not investment advice. Not a registered investment advisor. Past performance does not guarantee future results.
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VerdictSELL
Overall score3.8/10
ConfidenceHIGH
MacroNEUTRAL
TrendMatrix Research · core thesis
Engine thesis — one sentence
Molina Healthcare carries a quality score below the minimum acceptable threshold, declining revenues, and an erratic earnings track record — compounded by heavy Medicaid and geographic concentration — making the current setup structurally weak with the stock already trading above its near-term target.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
Approximately 75% of revenue is tied to the Medicaid program — a government-funded, government-regulated payer that exposes the company to legislative, reimbursement-rate, and enrollment-eligibility changes largely outside management's control. Bear case | If Medicaid concentration falls below 65% of total revenue, the business has meaningfully reduced its single-program dependency. | →Stable |
| CounterThe most recent quarter delivered a 23% positive earnings surprise, demonstrating that Medicaid operations can generate upside even under the current high-concentration structure. | ||
Reading the earnings record from most to least recent: the company posted a 23% beat in the latest quarter, but the three preceding quarters all missed — including a -921% miss — producing an average negative surprise of -238% and making forward earnings projections highly unreliable. Earnings | EPS surprise exceeds 5% for 2 consecutive quarters, establishing a new pattern of predictability. | →Stable |
| CounterThe most recent print broke the miss streak with a meaningful beat; if that reflects stabilized cost management, the historical miss pattern may not persist. | ||
Business quality has fallen below the minimum acceptable threshold, with revenue declining approximately 4% year-over-year, no identifiable competitive moat, and below-average returns on equity and assets — the core investment case lacks a structural driver of improvement. Warnings | Revenue growth turns positive for 2 consecutive quarters and quality metrics recover toward the minimum threshold. | →Stable |
| CounterFree cash flow conversion is exceptionally strong at over 400% of net income, suggesting the business generates meaningful cash despite soft headline quality metrics — this cash cushion could fund a recovery if conditions improve. | ||
The stock is trading above its near-term price target with a reward-to-risk ratio of -0.07-to-1 — there is no upside buffer remaining at current prices, and the risk/reward geometry is unfavorable for new capital or for holding an existing position. Price targets | A price correction of at least 10% below current levels, or a meaningful analyst target upgrade, would be required to restore a positive entry framework. | →Stable |
| CounterIf the recent earnings beat signals a fundamental inflection, analysts may revise price targets upward to reflect improved forward estimates, re-establishing positive implied upside. | ||
Approximately 75% of revenue is tied to the Medicaid program — a government-funded, government-regulated payer that exposes the company to legislative, reimbursement-rate, and enrollment-eligibility changes largely outside management's control.
→StableBear case
- Expectation
- If Medicaid concentration falls below 65% of total revenue, the business has meaningfully reduced its single-program dependency.
CounterThe most recent quarter delivered a 23% positive earnings surprise, demonstrating that Medicaid operations can generate upside even under the current high-concentration structure.
Reading the earnings record from most to least recent: the company posted a 23% beat in the latest quarter, but the three preceding quarters all missed — including a -921% miss — producing an average negative surprise of -238% and making forward earnings projections highly unreliable.
→StableEarnings
- Expectation
- EPS surprise exceeds 5% for 2 consecutive quarters, establishing a new pattern of predictability.
CounterThe most recent print broke the miss streak with a meaningful beat; if that reflects stabilized cost management, the historical miss pattern may not persist.
Business quality has fallen below the minimum acceptable threshold, with revenue declining approximately 4% year-over-year, no identifiable competitive moat, and below-average returns on equity and assets — the core investment case lacks a structural driver of improvement.
→StableWarnings
- Expectation
- Revenue growth turns positive for 2 consecutive quarters and quality metrics recover toward the minimum threshold.
CounterFree cash flow conversion is exceptionally strong at over 400% of net income, suggesting the business generates meaningful cash despite soft headline quality metrics — this cash cushion could fund a recovery if conditions improve.
The stock is trading above its near-term price target with a reward-to-risk ratio of -0.07-to-1 — there is no upside buffer remaining at current prices, and the risk/reward geometry is unfavorable for new capital or for holding an existing position.
→StablePrice targets
- Expectation
- A price correction of at least 10% below current levels, or a meaningful analyst target upgrade, would be required to restore a positive entry framework.
CounterIf the recent earnings beat signals a fundamental inflection, analysts may revise price targets upward to reflect improved forward estimates, re-establishing positive implied upside.
Per-dimension breakdown
Quality
3.0/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 1.5 |
| ROA | 1.3 |
| Gross margin | 0.0 |
| Op margin | 0.7 |
| Net margin | 0.2 |
| Current ratio | 5.9 |
| FCF quality | 10.0 |
| Moat | 3.1 |
| Piotroski F | 4.4 |
- ▸Excellent cash conversion: 403% FCF/NI
- ▸No competitive moat
Growth
0.7/10data confidence 67%| Component | Sub-score |
|---|---|
| Rev growth | 1.4 |
| EPS growth | 0.0 |
- ▸Declining revenue: -4%
Momentum
6.8/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 5.0 |
| MACD | 10.0 |
| OBV | 10.0 |
| MA position | 9.0 |
| Volume | 0.0 |
- ▸Volume accumulation (rising OBV)
- ▸Above 200-day MA
Sentiment
4.6/10data confidence 100%| Component | Sub-score |
|---|---|
| Analyst rating | 5.0 |
| Price target | 3.9 |
| erm sentiment | 5.0 |
Insider
4.0/10data confidence 75%| Component | Sub-score |
|---|---|
| materiality | 4.5 |
| insider conviction | 2.0 |
| holder change | 5.4 |
- ▸Modest insider selling — $3,429,913 (0.033% of mkt cap)
Peer rank
3.2/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 4.7 |
| quality rank | 3.2 |
| growth rank | 0.0 |
Technical
2.4/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 1.2 |
| support resistance | 0.3 |
| 52w position | 2.9 |
| gap | 5.0 |
Risk (lower is worse)
6.2/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 7.2 |
| days to cover | 8.3 |
| volatility | 3.5 |
| put call | 9.8 |
| implied vol | 4.7 |
| max pain risk | 3.0 |
| beta | 8.2 |
| debt equity | 5.2 |
| news risk | 6.0 |
- ▸Above max pain $125
- ▸Concentration risks: 2 HIGH (10-K Item 1A — sized via position_sizing, validated via buy_confidence)
Catalyst
3.0/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 5.0 |
| earnings history | 0.0 |
| earnings timing | 5.0 |
| surprise avg | 0.0 |
| news activity | 5.0 |
- ▸Earnings concerns: 1B/3M
How the verdict was assembled
Engine trigger
Quality below minimum threshold.
Engine technical detail
verdict_path:
L1:HARD_BLOCKPassed (6)
- MOMENTUM:6.8>=5.5
- INSIDER:OK
- NEWS_EVENTS:NONE_RECENT
- EARNINGS_PROXIMITY:27d clear
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (1)
- ASYMMETRY:-1.1=NEGATIVE
Warning (1)
- 8K_CSUITE_CHANGE:5.02 (officer departure/appointment)
Reward-to-Risk
-1.12
Upside
-16.8%
Downside
15.0%
Sizing output
AVOID
SetupBREAKOUT — Golden cross, above all MAs, RSI 64, MACD bullish
EdgeNO_EDGE — No clear edge identified
SuitabilityMODERATE — Balanced profile
Investment implication
The L1 gate blocked the positive-verdict path: a hard-floor threshold was breached, so dimensional pillars — including Momentum at 6.8 could not lift the engine output above the verdict floor. Failed gate signal: ASYMMETRY:-1.1=NEGATIVE.
The strongest dimensions are Momentum at 6.8, Risk (lower is worse) at 6.2, and Value at 5.3; the weakest are Growth at 0.7, Technical at 2.4, and Catalyst at 3.0. The V9 engine flagged 1 failed gate with 1 warning, producing an asymmetric reward-to-risk of -1.12 and an engine sizing output of AVOID.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1Approximately 75% of revenue is tied to the Medicaid program — a government-funded, government-regulated payer that exposes the company to legislative, reimbursement-rate, and enrollment-eligibility changes largely outside management's control.
Trip ifMedicaid revenue concentration falls below 60% of total revenue in any quarterly filing.
- P2Reading the earnings record from most to least recent: the company posted a 23% beat in the latest quarter, but the three preceding quarters all missed — including a -921% miss — producing an average negative surprise of -238% and making forward earnings projections highly unreliable.
Trip ifEPS surprise exceeds 5% for 2 consecutive quarters.
- P3Business quality has fallen below the minimum acceptable threshold, with revenue declining approximately 4% year-over-year, no identifiable competitive moat, and below-average returns on equity and assets — the core investment case lacks a structural driver of improvement.
Trip ifRevenue growth turns positive and exceeds 3% year-over-year for 2 consecutive quarters.
- P4The stock is trading above its near-term price target with a reward-to-risk ratio of -0.07-to-1 — there is no upside buffer remaining at current prices, and the risk/reward geometry is unfavorable for new capital or for holding an existing position.
Trip ifAnalyst consensus price target is revised upward by more than 15%, restoring positive upside above $232.