LONG BEACH, Calif. - Molina Healthcare, Inc. (NYSE: NYSE:MOH) has been awarded a Medicaid managed care contract by the Florida Agency for Healthcare Administration (AHCA) for its subsidiary, Molina Healthcare of Florida, Inc. The contract, which will cover Miami-Dade and Monroe Counties, is set to serve an estimated 90,000 Medicaid beneficiaries.
The company expects the contract to commence at the beginning of 2025, with a duration extending through the end of 2030. This development represents a significant expansion of Molina's managed healthcare services in the Florida region.
Molina Healthcare, a Fortune 500 entity, operates nationally, providing services under Medicaid and Medicare programs, as well as through state insurance marketplaces. The company's experience and infrastructure are poised to support the anticipated influx of Medicaid members in the two Florida counties.
While the contract award is a positive step for Molina, the company acknowledges the presence of risks and uncertainties that could impact the actual results of the contract. These include potential challenges from other bidders, possible delays in the contract start date, or changes in the expected number of enrollees.
Investors and stakeholders are reminded that forward-looking statements are not guarantees of future performance and that actual outcomes may differ due to various factors. Molina advises that further details on risk factors are available in its periodic reports to the Securities and Exchange Commission (SEC), including its most recent Annual Report on Form 10-K.
The information herein is based on a press release statement from Molina Healthcare, Inc. and does not include any speculative or additional information beyond the announced contract award and its expected terms.
In other recent news, Molina Healthcare has been in the spotlight with various developments. The company's first quarter 2024 financial results showed an adjusted earnings per share (EPS) of $5.73 and a significant revenue increase to $9.93 billion, surpassing analyst expectations. TD Cowen and Wells Fargo (NYSE:WFC), however, adjusted their outlooks on Molina Healthcare, reducing their price targets to $412 and $375 respectively, but maintaining their ratings.
TD Cowen's reduction reflects changes in the price-to-earnings ratio used to calculate the target, influenced by factors such as the company's business performance and contract gains and losses.
Despite this, the firm maintains its EPS forecasts for the years 2024 and 2025. Wells Fargo's revision comes amid concerns over the company's guidance for Medicaid Medical Loss Ratio (MLR) in 2024, which may not sufficiently account for potential pressures.
In addition to these adjustments, Molina Healthcare's first quarter results showed a GAAP net income of $5.17 per diluted share, a decrease of 6% year-over-year. Despite this decline, the company's premium revenue growth, driven by new contract wins, acquisitions, and expansion, contributed to the overall positive financial performance.
The company also reaffirmed its full year 2024 guidance, expecting premium revenue to be approximately $38 billion and adjusted earnings of at least $23.50 per diluted share.
InvestingPro Insights
Molina Healthcare's recent contract win in Florida underscores its role as a prominent player in the Healthcare Providers & Services industry, a fact echoed by one of the InvestingPro Tips which highlights the company's industry position. This aligns with the company's strategic vision to expand its managed healthcare services.
Adding to the company's appeal, Molina Healthcare holds more cash than debt on its balance sheet, providing a strong financial foundation for future growth. Moreover, the company is trading at a low P/E ratio relative to near-term earnings growth, which could indicate an attractive investment opportunity for those looking at the fundamentals.
InvestingPro Data supports a positive outlook, with Molina Healthcare having a market cap of $16.86 billion and a P/E ratio that has slightly adjusted to 15.26 in the last twelve months as of Q1 2024. The company also demonstrated a robust revenue growth of 9.98% during the same period. Moreover, the stock is trading near its 52-week low, which might represent a potential entry point for investors considering the company's solid fundamentals and the recent expansion of its operations in Florida.
For investors seeking deeper insights, there are additional InvestingPro Tips available for Molina Healthcare. These include analysis on the company's low price volatility, its ability to cover interest payments with cash flows, and its strong return over the last five years. To explore these tips and more, visit: https://www.investing.com/pro/MOH. Don't forget to use the coupon code PRONEWS24 to get up to 10% off a yearly Pro and a yearly or biyearly Pro+ subscription.
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