It's been a good week for Molina Healthcare, Inc. (NYSE:MOH) shareholders, because the company has just released its latest annual results, and the shares gained 3.4% to US$402. Revenues of US$33b were in line with forecasts, although statutory earnings per share (EPS) came in below expectations at US$18.77, missing estimates by 2.6%. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Molina Healthcare after the latest results.
Taking into account the latest results, the consensus forecast from Molina Healthcare's eleven analysts is for revenues of US$39.5b in 2024. This reflects a notable 20% improvement in revenue compared to the last 12 months. Per-share earnings are expected to step up 19% to US$22.25. Before this earnings report, the analysts had been forecasting revenues of US$38.6b and earnings per share (EPS) of US$22.32 in 2024. So it looks like there's been no major change in sentiment following the latest results, although the analysts have made a slight bump in to revenue forecasts.
Even though revenue forecasts increased, there was no change to the consensus price target of US$411, suggesting the analysts are focused on earnings as the driver of value creation. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. There are some variant perceptions on Molina Healthcare, with the most bullish analyst valuing it at US$474 and the most bearish at US$357 per share. Still, with such a tight range of estimates, it suggeststhe analysts have a pretty good idea of what they think the company is worth.
Of course, another way to look at these forecasts is to place them into context against the industry itself. We can infer from the latest estimates that forecasts expect a continuation of Molina Healthcare'shistorical trends, as the 20% annualised revenue growth to the end of 2024 is roughly in line with the 17% annual growth over the past five years. Compare this with the broader industry, which analyst estimates (in aggregate) suggest will see revenues grow 6.5% annually. So although Molina Healthcare is expected to maintain its revenue growth rate, it's definitely expected to grow faster than the wider industry.
The Bottom Line
The most obvious conclusion is that there's been no major change in the business' prospects in recent times, with the analysts holding their earnings forecasts steady, in line with previous estimates. Happily, they also upgraded their revenue estimates, and are forecasting them to grow faster than the wider industry. The consensus price target held steady at US$411, with the latest estimates not enough to have an impact on their price targets.
Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. We have forecasts for Molina Healthcare going out to 2026, and you can see them free on our platform here.
Even so, be aware that Molina Healthcare is showing 1 warning sign in our investment analysis , you should know about...
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.