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"We rate MOLINA HEALTHCARE INC (MOH) a BUY. This is driven by multiple strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its robust revenue growth, largely solid financial position with reasonable debt levels by most measures, good cash flow from operations, growth in earnings per share and increase in net income. We feel these strengths outweigh the fact that the company has had somewhat disappointing return on equity."
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Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The revenue growth came in higher than the industry average of 19.7%. Since the same quarter one year prior, revenues rose by 47.3%. Growth in the company's revenue appears to have helped boost the earnings per share.
- The debt-to-equity ratio is somewhat low, currently at 0.94, and is less than that of the industry average, implying that there has been a relatively successful effort in the management of debt levels. Along with the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.48, which illustrates the ability to avoid short-term cash problems.
- MOLINA HEALTHCARE INC reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, MOLINA HEALTHCARE INC increased its bottom line by earning $0.96 versus $0.25 in the prior year. This year, the market expects an improvement in earnings ($1.35 versus $0.96).
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Health Care Providers & Services industry. The net income increased by 113.0% when compared to the same quarter one year prior, rising from $7.57 million to $16.12 million.
- Net operating cash flow has significantly increased by 171.03% to $605.74 million when compared to the same quarter last year. In addition, MOLINA HEALTHCARE INC has also vastly surpassed the industry average cash flow growth rate of -23.09%.
- You can view the full analysis from the report here: MOH Ratings Report