As the Q4 earnings season comes to a close, it’s time to take stock of this quarter’s best and worst performers in the health insurance providers industry, including Molina Healthcare (NYSE:MOH) and its peers.
Upfront premiums collected by health insurers lead to reliable revenue, but profitability ultimately depends on accurate risk assessments and the ability to control medical costs. Health insurers are also highly sensitive to regulatory changes and economic conditions such as unemployment. Going forward, the industry faces tailwinds from an aging population, increasing demand for personalized healthcare services, and advancements in data analytics to improve cost management. However, continued regulatory scrutiny on pricing practices, the potential for government-led reforms such as expanded public healthcare options, and inflation in medical costs could add volatility to margins. One big debate among investors is the long-term impact of AI and whether it will help underwriting, fraud detection, and claims processing or whether it may wade into ethical grey areas like reinforcing biases and widening disparities in medical care.
The 11 health insurance providers stocks we track reported a satisfactory Q4. As a group, revenues beat analysts’ consensus estimates by 2.3% while next quarter’s revenue guidance was in line.
In light of this news, share prices of the companies have held steady. On average, they are relatively unchanged since the latest earnings results.
Weakest Q4: Molina Healthcare (NYSE:MOH)
Founded in 1980 as a clinic for underserved California residents, Molina Healthcare (NYSE:MOH) provides health insurance to individuals and families who are eligible for government-sponsored programs such as Medicare (elderly) and Medicaid (low-income).
Molina Healthcare reported revenues of $10.5 billion, up 16% year on year. This print exceeded analysts’ expectations by 1.9%. Despite the top-line beat, it was still a slower quarter for the company with a miss of analysts’ full-year EPS guidance estimates and a significant miss of analysts’ EPS estimates.
“I am very pleased our 2024 revenue growth exceeded our long-term targets and we produced consolidated pre-tax margins within our long-term target range,” said Joseph Zubretsky, President and Chief Executive Officer.
The stock is down 5.1% since reporting and currently trades at $301.03.
Is now the time to buy Molina Healthcare? Access our full analysis of the earnings results here, it’s free.
Best Q4: Progyny (NASDAQ:PGNY)
Founded in 2008, Progyny (NASDAQ:PGNY) provides fertility and family-building benefits solutions, integrating technology and personalized care to support individuals and employers in managing reproductive healthcare.
Progyny reported revenues of $298.4 million, up 10.6% year on year, outperforming analysts’ expectations by 7.6%. The business had a very strong quarter with an impressive beat of analysts’ sales volume estimates and EBITDA guidance for next quarter exceeding analysts’ expectations.
Progyny achieved the biggest analyst estimates beat among its peers. Although it had a fine quarter compared to its peers, the market seems unhappy with the results as the stock is down 5.7% since reporting. It currently trades at $21.54.
Is now the time to buy Progyny? Access our full analysis of the earnings results here, it’s free.
Cigna (NYSE:CI)
Serving both corporate clients and individual customers, Cigna (NYSE:CI) offers health insurance and pharmacy benefit management services that cover medical, dental, behavioral health, and vision needs.
Cigna reported revenues of $65.65 billion, up 28.4% year on year, exceeding analysts’ expectations by 4.5%. Still, it was a slower quarter as it posted full-year operating income guidance missing analysts’ expectations.
Cigna delivered the weakest full-year guidance update in the group. The company added 96,000 customers to reach a total of 17.5 million. Interestingly, the stock is up 1.9% since the results and currently trades at $308.86.
Read our full analysis of Cigna’s results here.
Alignment Healthcare (NASDAQ:ALHC)
Founded in 2013, Alignment Healthcare (NASDAQ:ALHC) provides Medicare Advantage plans with a focus on technology such as telemedicine and a proprietary platform that digitizes care coordination and features predictive analytics.
Alignment Healthcare reported revenues of $701.2 million, up 50.7% year on year. This number surpassed analysts’ expectations by 3.6%. It was a very strong quarter as it also logged EBITDA guidance for next quarter exceeding analysts’ expectations.
Alignment Healthcare achieved the fastest revenue growth and highest full-year guidance raise among its peers. The company added 6,800 customers to reach a total of 189,100. The stock is up 17% since reporting and currently trades at $15.75.
Read our full, actionable report on Alignment Healthcare here, it’s free.
UnitedHealth (NYSE:UNH)
Serving individuals, employers, and government programs like Medicare and Medicaid, UnitedHealth (NYSE:UNH) offers health insurance plans that cover medical, dental, and vision needs.
UnitedHealth reported revenues of $100.8 billion, up 6.8% year on year. This print missed analysts’ expectations by 0.9%. All in all, it was a slower quarter for the company.
The company added 5,000 customers to reach a total of 53.73 million. The stock is down 12.1% since reporting and currently trades at $477.44.
Read our full, actionable report on UnitedHealth here, it’s free.
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