Molina Healthcare, Inc. (NYSE:MOH) shareholders are probably feeling a little disappointed, since its shares fell 6.9% to US$342 in the week after its latest first-quarter results. It was a workmanlike result, with revenues of US$9.9b coming in 5.3% ahead of expectations, and statutory earnings per share of US$5.17, in line with analyst appraisals. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.

View our latest analysis for Molina Healthcare

Taking into account the latest results, the current consensus from Molina Healthcare's eleven analysts is for revenues of US$39.7b in 2024. This would reflect a notable 14% increase on its revenue over the past 12 months. Statutory earnings per share are predicted to ascend 20% to US$21.89. In the lead-up to this report, the analysts had been modelling revenues of US$39.5b and earnings per share (EPS) of US$22.37 in 2024. The analysts seem to have become a little more negative on the business after the latest results, given the minor downgrade to their earnings per share numbers for next year.

The consensus price target held steady at US$413, with the analysts seemingly voting that their lower forecast earnings are not expected to lead to a lower stock price in the foreseeable future. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. The most optimistic Molina Healthcare analyst has a price target of US$453 per share, while the most pessimistic values it at US$354. With such a narrow range of valuations, the analysts apparently share similar views on what they think the business is worth.

Of course, another way to look at these forecasts is to place them into context against the industry itself. The period to the end of 2024 brings more of the same, according to the analysts, with revenue forecast to display 20% growth on an annualised basis. That is in line with its 17% annual growth over the past five years. Compare this with the broader industry, which analyst estimates (in aggregate) suggest will see revenues grow 6.7% 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 important thing to take away is that the analysts downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. Fortunately, they also reconfirmed their revenue numbers, suggesting that it's tracking in line with expectations. Additionally, our data suggests that revenue is expected to grow faster than the wider industry. The consensus price target held steady at US$413, with the latest estimates not enough to have an impact on their price targets.

With that in mind, we wouldn't be too quick to come to a conclusion on Molina Healthcare. Long-term earnings power is much more important than next year's profits. We have forecasts for Molina Healthcare going out to 2026, and you can see them free on our platform here.

That said, it's still necessary to consider the ever-present spectre of investment risk. We've identified 1 warning sign with Molina Healthcare , and understanding it should be part of your investment process.

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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.