Is MOH a good stock to buy? We came across a bullish thesis on Molina Healthcare, Inc. on Dasam’s Substack. In this article, we will summarize the bulls’ thesis on MOH. Molina Healthcare, Inc.’s share was trading at $150.12 as of April 20th. MOH’s trailing and forward P/E were 16.83 and 29.76 respectively according to Yahoo Finance.
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Molina Healthcare, Inc. provides managed healthcare services to low-income families and individuals under the Medicaid and Medicare programs and through the state insurance marketplaces in the United States. MOH reported a shocking Q4 2025 adjusted loss of $2.75/share, far below Wall Street’s $0.34 estimate, driving the stock down ~28% to ~$126, under Michael Burry’s $165 entry price. Full-year 2025 EPS of $11.03 missed guidance by more than half, and 2026 EPS guidance of $5.00 stunned analysts expecting $13.76, with management labeling it a “trough year.”
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The company faces three compounding challenges: Medicaid rates are 300–400 basis points below actual costs, driven by rising behavioral health and pharmacy expenses and GLP-1 drug usage; Marketplace/ACA losses intensified as enhanced subsidies expired, with the sickest patients dominating the risk pool, prompting a 66% membership reduction; and California contributed a $135 million retroactive Medicaid adjustment in Q4, exacerbating losses.
Despite the near-term pain, Burry’s thesis holds: Molina maintains a low expense ratio of 6.4%, a GEICO-like cost advantage, a full acquisition pipeline, and embedded future earnings of ~$11/share from existing contracts. Regulatory protections ensure Medicaid rate catch-up, and the Florida CMS contract alone could add $4–5/share once fully ramped. At ~$126, the stock trades at ~4.5x normalized earnings versus Burry’s embedded EPS targets.
Key risks include a deeper-than-expected trough, negative $535M operating cash flow in 2025, rising debt to $3.77B, and slower Medicaid rate recovery until mid-2027. Marketplace losses and California retroactive adjustments introduce structural uncertainty, while potential FMAP reductions remain a concrete threat.
Overall, Molina confirms its structural advantages, but realizing Burry’s long-term thesis will require patience, a multi-year horizon, and tolerance for short-term volatility, with the upcoming May 8, 2026 Investor Day serving as a pivotal catalyst for the story’s progression making it an attractive opportunity for patient investors.
Previously, we covered a bullish thesis on Molina Healthcare, Inc. (MOH) by Long-Term Pick in February 2025, which highlighted the company’s strong growth from new Medicaid and Medicare contracts, rising premium revenue, and resilient net income despite higher medical spending. MOH’s stock price has depreciated by approximately 43.68% since our coverage. Medicaid underpaid by 300–400 bps; ACA losses after subsidy expiry cut membership 66%; $135M California Medicaid adjustment worsened Q4 losses. Dasam shares a similar view but emphasizes the 2025 Q4 losses, Medicaid rate gaps, and Marketplace challenges, providing an updated perspective on the short-term risks.
Molina Healthcare, Inc. is not on our list of the 40 Most Popular Stocks Among Hedge Funds. As per our database, 55 hedge fund portfolios held MOH at the end of the fourth quarter which was 51 in the previous quarter. While we acknowledge the risk and potential of MOH as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than MOH and that has 10,000% upside potential, check out our report about this cheapest AI stock.
Disclosure: None.
