Molina Healthcare (NYSE:MOH) fell ~20% on Thursday, and its peers also traded lower after the Medicaid-led health insurer reported worse-than-expected Q3 earnings and significantly cut its full-year outlook.
Notable decliners include Oscar Health (NYSE:OSCR), UnitedHealth (UNH), and Centene (NYSE:CNC). Elevance Health (ELV), which reported its Q3 earnings last week, traded flat alongside Medicare-driven insurers such as Humana (HUM).
Reporting its latest quarterly results on Wednesday after the close, Long Beach, California-based Molina (NYSE:MOH) lowered its adjusted earnings outlook to $14.00 per share from the prior forecast of at least $19 in comparison to $18.62 in the consensus.
As reasons for the decision, the company cited adverse medical cost trends across all its segments, particularly a disproportionate cost trend in its Marketplace business, which it said could continue until the end of this year.
Molina (NYSE:MOH), however, increased its full-year revenue guidance to $44.5B from $44.0B in the previous outlook but roughly in line with $44.52B in FactSet consensus, projecting its premium revenue to rise ~10% YoY to $42.5B up from $42.0B previously.
Noting that MOH’s guidance cut followed its Q3 earnings miss, JPMorgan analyst John Stansel argued, according to Bloomberg News, that its ACA marketplace business is the “primary culprit” while other units also came under pressure.
Baird analyst Michael Ha opined that the company made a significant revision to its 2025 EPS guidance and its 2026 outlook, which is expected with its Q4 results next year and “may appear conservative at first glance.” With a Neutral rating on the stock, Ha remains cautious, as he expects a volatile multi-year period for the company’s Medicaid/Health Insurance Exchange business.