Molina Healthcare, Inc. (NYSE: MOH)

Sector: Healthcare Industry: Healthcare Plans CIK: 0001179929
Market Cap 7.17 Bn
P/B 1.76
P/E 15.19
P/S 0.16
ROIC (Qtr) 7.27
Div Yield % 0.00
Rev 1y % (Qtr) 8.34
Total Debt (Qtr) 3.95 Bn
Debt/Equity (Qtr) 0.97
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About

Investment thesis

Bull case

  • Strong tangible asset base of 13.37B provides 3.38x coverage of total debt 3.95B, indicating robust asset backing and low credit risk.
  • Tangible assets of 13.37B provide exceptional 202.56x coverage of deferred revenue 66M, showing strong service capability backing.
  • Short-term investments of 4.01B provide solid 1.61x coverage of other current liabilities 2.48B, indicating strong liquidity.
  • Strong free cash flow of (636M) provides 2.60x coverage of acquisition spending (245M), indicating disciplined M&A strategy.
  • Tangible assets of 13.37B provide robust 5.38x coverage of other current liabilities 2.48B, indicating strong asset backing.

Bear case

  • Operating cash flow of (535M) barely covers its investment activities of 312M, with a coverage ratio of -1.71, indicating heavy reliance on external financing for growth which may not be sustainable in a tighter credit environment.
  • Cash reserves of 4.25B provide limited coverage of acquisition spending of (245M), which is -17.34x, suggesting aggressive expansion might strain liquidity if market conditions deteriorate.
  • Operating cash flow of (535M) provides insufficient coverage of deferred revenue obligations of 66M, which is -8.11x, raising concerns about future service delivery capabilities.
  • The company's operating cash flow of (535M) shows concerning coverage of stock compensation expenses of 47M, with a -11.38 ratio indicating potential earnings quality issues.
  • Free cash flow of (636M) provides weak coverage of capital expenditures of 101M, with a -6.30 ratio suggesting additional external financing needs for growth initiatives.

Segments Breakdown of Revenue (2021)

Peer comparison

Companies in the Healthcare Plans
S.No. Ticker Company Market Cap P/E P/S Total Debt (Qtr)
1 UNH Unitedhealth Group Inc 275.49 Bn 47.39 1.75 80.14 Bn
2 CVS CVS HEALTH Corp 101.72 Bn 15.33 0.40 79.95 Bn
3 CI Cigna Group 85.42 Bn 23.60 0.41 34.04 Bn
4 ELV Elevance Health, Inc. 77.22 Bn 13.64 0.39 32.05 Bn
5 HUM Humana Inc 25.29 Bn 14.38 0.43 12.92 Bn
6 CNC Centene Corp 20.34 Bn -3.05 0.10 17.40 Bn
7 MOH Molina Healthcare, Inc. 7.17 Bn 15.19 0.16 3.95 Bn
8 ALHC Alignment Healthcare, Inc. 3.90 Bn -187.18 1.07 0.33 Bn

Industry comparisons

Current Valuation Value Ind Avg Percentile
EV to Assets EV to Assets 0.44 1.08
EV to Cash from Ops. EV/CFO -12.71 3.83
EV to Debt EV to Debt 1.72 9.18
EV to EBIT EV/EBIT 8.71 -1,594.13
EV to EBITDA EV/EBITDA 6.97 15.88
EV to Free Cash Flow [EV/FCF] EV/FCF -10.70 8.41
EV to Market Cap EV to Market Cap 0.95 1.08
EV to Revenue EV/Rev 0.15 0.68
Price to Book Value [P/B] P/B 1.76 4.79
Price to Earnings [P/E] P/E 15.19 -5.08
Dividend Metrics Value Ind Avg Percentile
Dividend Coverage Ratio Dividend Coverage Ratio 0.00 1.21
Dividend Payout Ratio % Div Payout % (Qtr) 0.00 29.17
Dividend per Basic Share Div per Share (Qtr) 0.00 2.51
FCF Dividend Payout Ratio % FCF Div Payout % (Qtr) 0.00 16.79
Interest Coverage Int. cover (Qtr) 4.07 -0.47
Growth Metrics Value Ind Avg Percentile
Capex Growth (1y) % Capex 1y % (Qtr) -1.00 -30.05
Cash and Equivalents Growth (1y) % Cash & Equiv 1y % (Qtr) -8.88 18.06
Dividend Growth (1y) % Dividend Growth (1y) % 0.00 2.04
EBIAT Growth (1y) % EBIAT 1y % (Qtr) -50.59 -108.29
EBITDA Growth (1y) % EBITDA 1y % (Qtr) -48.44 -60.87
EBIT Growth (1y) % EBIT 1y % (Qtr) -54.25 -84.20
EBT Growth (1y) % EBT 1y % (Qtr) -62.93 -142.02
EPS Growth (1y) % EPS 1y % (Qtr) -56.48 -164.11
FCF Growth (1y) % FCF 1y % (Qtr) -216.91 111.09
Gross Profit Growth (1y) % Gross Profit 1y % (Qtr) -13.96 7.06
Liquidity Ratios Value Ind Avg Percentile
Asset Utilization Ratio Asset Util Ratio (Qtr) 2.92 2.20
Cash Payout Ratio Cash Payout (Qtr) 0.00 0.11
Cash Ratio Cash Ratio (Qtr) 0.58 0.48
Current Ratio Curr Ratio (Qtr) 1.69 1.46
Debt to Equity Ratio Debt/Equity (Qtr) 0.97 0.77
Interest Cover Ratio Int Coverage (Qtr) 4.07 -0.47
Times Interest Earned Times Interest Earned (Qtr) 4.07 -0.47
Profitability Value Ind Avg Percentile
EBITDA Margin % EBITDA Margin % (Qtr) 2.10 1.97
EBIT Margin % EBIT Margin % (Qtr) 1.72 1.42
EBT Margin % EBT Margin % (Qtr) 1.30 0.98
Gross Margin % Gross Margin % (Qtr) 9.00 14.54
Net Profit Margin % Net Margin % (Qtr) 1.00 0.45