Molina Healthcare, Inc. (MOH): A Bull Case Theory 

We came across a bullish thesis on Molina Healthcare, Inc. on Sherwood Investment Letter’s Substack by Joel Sherwood. In this article, we will summarize the bulls’ thesis on MOH. Molina Healthcare, Inc.’s share was trading at $145.97 as of December 2nd. MOH’s trailing and forward P/E were 8.93 and 10.45, respectively according to Yahoo Finance.

Molina Healthcare (MOH) shares dropped nearly 20% following a disappointing Q3, with higher costs, tighter cash, and a weaker outlook weighing on results. While these are valid concerns, the market’s reaction appears excessive given that most of these headwinds were already priced in after a brutal healthcare selloff earlier this year. Molina, alongside peers like UnitedHealth (UNH), Centene (CNC), and Elevance (ELV), had already fallen 40–60% amid the same concerns.

The latest decline seems to mirror the July overreaction, when sentiment collapsed before rebounding sharply after news broke in August that Berkshire Hathaway had taken a position in UnitedHealth, signaling deep-value interest in the sector. Molina’s stock recovered nearly 30% after that, but the latest selloff brings it back near its 52-week low, presenting what looks like another market dislocation rather than a fundamental reset.

Despite short-term margin pressures, Molina continues to show resilient fundamentals, supported by 11% revenue growth—better than expected and a sign that the business continues to expand even in a cost-heavy environment. The defensive nature of the Medicaid and Medicare space, coupled with Molina’s efficient operating model, still underpins its value proposition.

If earnings stabilize or mean-revert, the share price has significant upside potential from these depressed levels. Investors may once again find opportunity in the market’s overreaction, much like Buffett did with UNH, as Molina’s core growth and defensive profile remain intact despite near-term turbulence.

Previously we covered a bullish thesis on Molina Healthcare, Inc. (MOH) by Long-Term Pick in February 2025, highlighting strong Marketplace growth and expanding Medicaid and Medicare contracts. The stock has depreciated about 45.24% since, as higher costs and weaker earnings pressured sentiment. The thesis still stands on long-term growth potential, while Joel Sherwood shares a similar view, emphasizing market overreaction and value opportunity.

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Disclosure: None.