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In the past few days, Grabar Law Office began investigating Molina Healthcare’s officers and directors over alleged failures to disclose material risks around medical cost trends, premium adequacy, and reliance on certain health services, with potential implications for its fiscal 2025 financial guidance.
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This probe raises questions about how well Molina’s reported assumptions on medical costs and utilization reflected underlying business realities that matter to shareholders.
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Next, we’ll explore how this shareholder investigation and the risk of a 2025 guidance cut may reshape Molina Healthcare’s investment narrative.
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To own Molina Healthcare, you have to believe in the durability of its Medicaid and Medicare managed care model and its ability to keep medical costs in line with premiums. The Grabar Law Office investigation goes straight to that cost and disclosure story, so it could matter for the key near term catalyst: confidence in 2025 guidance, and the biggest current risk around whether medical cost trends have been adequately priced.
The most relevant recent development is Molina’s 2025 guidance from February, which pointed to about US$42 billion in premium revenue and US$44 billion in total revenue, alongside GAAP net income of US$1,251 million. The shareholder probe directly questions the assumptions behind those targets, especially the alignment between premium rates and medical costs, which were previously seen as a support for earnings stability.
Yet behind these headline numbers, the pressure from rising behavioral health and high cost drug utilization is something investors should be aware of because…
Read the full narrative on Molina Healthcare (it’s free!)
Molina Healthcare’s narrative projects $50.7 billion revenue and $1.3 billion earnings by 2028.
Uncover how Molina Healthcare’s forecasts yield a $170.00 fair value, a 12% downside to its current price.
Eleven fair value estimates from the Simply Wall St Community span roughly US$170 to about US$795, showing how far apart individual views can be. You can weigh those against the emerging concern that medical costs may be outpacing premium adequacy, with clear implications for how sustainable Molina’s current earnings profile really is.
Explore 11 other fair value estimates on Molina Healthcare – why the stock might be worth 12% less than the current price!
Disagree with existing narratives? Create your own in under 3 minutes – extraordinary investment returns rarely come from following the herd.
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