Molina Healthcare, Inc.

Based on the provided analysis for MOH, here is a comprehensive assessment.

Technical Analysis The technical picture is exceptionally weak, signaling a stock in a severe downtrend. MOH is deeply oversold, having experienced a catastrophic peak-to-trough decline and trading near its 52-week low. While this suggests extreme negative sentiment, the powerful prevailing downward momentum indicates a high risk of further price deterioration before any sustainable recovery can begin.

Fundamentals Fundamentals have deteriorated alarmingly, particularly in profitability. The swing from a net profit to a significant loss in the latest quarter, coupled with a contracting gross margin, points to severe operational pressures. Although the debt level appears manageable, the deeply negative interest coverage ratio is a major concern, indicating earnings are insufficient to service existing debt comfortably.

Valuation & Risk Valuation metrics are misleading; while the trailing P/E seems reasonable, negative forward P/E and EV/EBITDA ratios flag expectations of severe near-term financial decline. The risk profile is complex: the low beta suggests low correlation to the market, but this is contradicted by the stock's extreme volatility and massive drawdown, highlighting significant company-specific risks.

Buy Recommendation

Based on the comprehensive analysis, MOH is not a recommended buy at this time. The convergence of a powerful technical downtrend, a material and sudden deterioration in profitability, and negative forward-looking valuation metrics creates a highly unfavorable risk/reward profile. Investors should wait for clear signs of a fundamental turnaround, such as a return to profitability and improved cash flow, before considering a position. This stock is best suited for monitoring until stability returns.

*Note: This is not investment advice, for reference only.*

RockFlow Model Forecast: Three Scenarios for 2026

Based on the analysis provided, the 12-month outlook for MOH is highly cautious. Key catalysts for a potential recovery would be clear signs of a fundamental turnaround, specifically a return to profitability and improved cash flow generation in upcoming quarters. The primary risks are significant, including persistent negative earnings, an inability to cover interest payments, and the powerful technical downtrend suggesting further price deterioration is possible. Given the severe deterioration in fundamentals and lack of analyst targets, establishing a precise target price is speculative; investors should prioritize monitoring for stabilization over anticipating near-term appreciation.

Wall Street Consensus

Most Wall Street analysts are optimistic about Molina Healthcare, Inc.'s 12-month outlook, with consensus target around $148.24, indicating expected upside potential.

Overall, MOH has investment potential but also faces challenges. Here are key factors to weigh before investing.

MOH has experienced severe price deterioration over the past year, characterized by a catastrophic peak-to-trough decline and a substantial recent selloff. The stock is currently mired in a deep bear market phase, significantly underperforming the broader market.

The stock's performance is alarming, with a severe one-month decline of nearly -30% outweighing a less severe three-month drop of -5.46%. Despite its low beta suggesting lower volatility, MOH has significantly underperformed the market by 5.44% over the last quarter, indicating severe stock-specific negative catalysts are driving the decline.

Currently trading at $135.68, MOH sits just 12% above its 52-week low and a staggering 62% below its 52-week high. Following a -65% maximum drawdown, the stock is deeply oversold on a technical basis, reflecting extreme negative sentiment, though it remains vulnerable to further downside given the powerful prevailing downtrend.

Revenue & Profitability: MOH demonstrates concerning performance with a significant drop in profitability from Q3 to Q4 2025. While revenue remained broadly stable, the company swung from a net income profit of $79 million in Q3 to a loss of -$160 million in Q4, marking a material deterioration. Its gross margin contracted to just 10.89%, indicating pressure on underlying operational costs.

Financial Health: The company's debt situation appears manageable with a reasonable Debt-to-Equity ratio below 1. However, concerningly, its Interest Coverage ratio turned deeply negative amid EBIT losses, suggesting current earnings are insufficient to service debt obligations comfortably. The negative Cash Flow trend warrants monitoring as operational losses strain cash generation.

Operational Efficiency: MOH's operational efficiency presents mixed signals with weakness in asset utilization driving negative ROE figures approaching -4%. While fixed asset turnover remains high at ~38x, the overall asset turnover ratio remains modest (~0.73), limiting returns on capital deployed. The negative operating cash flow trend further signals pressure on working capital management.

Valuation Level MOH's trailing PE of 14.8 suggests a reasonable valuation on a historical earnings basis. However, the negative forward PE and deeply negative EV/EBITDA are significant red flags, indicating the market expects earnings and operating cash flow to deteriorate substantially. These negative forward-looking metrics strongly imply the stock is overvalued relative to its near-term financial prospects.

Peer Comparison A peer comparison is not feasible as industry average data is unavailable. The analysis is therefore limited to an absolute assessment based on MOH's standalone metrics. The negative forward-looking ratios remain a primary concern without an industry context to determine if this is a company-specific or sector-wide issue.

Volatility Risk: MOH exhibits exceptionally low systematic risk with a Beta of 0.493, indicating it is expected to be about half as volatile as the broader market. However, this is sharply contradicted by its maximum drawdown of -65.28% over the past year, revealing a stock susceptible to extreme, isolated price declines that are not captured by its low Beta alone.

Other Risks: The absence of reported short interest suggests a lack of significant bearish sentiment from sophisticated investors, which can be a positive indicator. However, this may also be related to potential liquidity constraints or a limited float, creating an environment where sudden shifts in sentiment could lead to sharp, unidirectional price movements due to a thin market for the stock.