12 Cheap Healthcare Stocks to Buy Heading into 2025

9. Molina Healthcare, Inc. (NYSE:MOH)

P/E Ratio: 15.03 

Molina Healthcare, Inc. (NYSE:MOH) is a managed care company providing health insurance and services, primarily to low-income individuals and families. It operates through government-sponsored programs like Medicaid, Medicare, and the Health Insurance Marketplace, offering insurance plans, primary care clinics, and comprehensive healthcare solutions.

Molina Healthcare, Inc. (NYSE:MOH) reported premium revenue of almost $9.7 billion in Q3 2024, which is a 17% increase from the previous year. A Medical Care Ratio (MCR) ratio of 89.2%, which shows that almost 90 cents of every dollar earned was spent on medical care, overshadowed this growth. This is much more than anticipated and above their long-term objective range of 85-88%. Higher medical expenditures in the Medicaid and Medicare segments were the primary cause of the higher MCR; California faced particular difficulties as a result of a retroactive premium rate cut that had a detrimental effect on margins.

The profitability of Molina Healthcare, Inc. (NYSE:MOH) was under strain despite the rise in sales. Although it was in line with forecasts, the adjusted profits per share (EPS) of $6.01 revealed a worrying trend in cost control. Although it was within their desired range, the adjusted pre-tax margin of 4.5% illustrates a situation in which costs are increasing more quickly than revenue growth in important categories.

According to the Insider Monkey database, 37 hedge funds held shares in the company in Q3 2024, with Durable Capital Partners being the largest shareholder, owning $361.4 million worth of stakes.