Molina Healthcare’s (NYSE:MOH) Q3 2026 sales top estimates

Healthcare insurance company Molina Healthcare (NYSE:MOH) reported revenue ahead of Wall Street’s expectations in Q3 2026, but sales fell by 3.4% year on year to $11.08 billion. Its non-GAAP profit of $0.89 per share was 12% above analysts’ consensus estimates.

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“We are pleased with our third quarter results in this challenging environment and reaffirm our full year guidance,” said Joseph Zubretsky, President and Chief Executive Officer. “With the apparent plateauing of medical cost trend, which remains at elevated levels, and the strength of recent rate updates for 2027, we believe we are likely observing the beginning of the turn in Medicaid margins.”

Company overview

Founded in 1980 as a provider for underserved communities in Southern California, Molina Healthcare (NYSE:MOH) provides managed healthcare services primarily to low-income individuals through Medicaid, Medicare, and Marketplace insurance programs across 21 states.

Revenue growth

A company’s long-term sales performance is one signal of its overall quality. Any business can experience short-term success, but top-performing ones enjoy sustained growth for years. Over the last five years, Molina Healthcare grew its sales at a decent 11.6% compounded annual growth rate. Its growth was slightly above the average healthcare company and shows its offerings resonate with customers.

We at StockStory place the most emphasis on long-term growth, but within healthcare, a half-decade historical view may miss recent innovations or disruptive industry trends. Molina Healthcare’s recent performance shows its demand has slowed as its annualized revenue growth of 6.1% over the last two years was below its five-year trend. We’re wary when companies in the sector see decelerations in revenue growth, as it could signal changing consumer tastes aided by low switching costs.

Molina Healthcare also reports its number of customers, which reached 4.86 million in the latest quarter. Over the last two years, Molina Healthcare’s customer base averaged 5.2% year-on-year declines. Because this number is lower than its revenue growth, we can see the average customer spent more money each year on the company’s products and services.

This quarter, Molina Healthcare’s revenue fell by 3.4% year on year to $11.08 billion but beat Wall Street’s estimates by 2%.

Looking ahead, sell-side analysts expect revenue to grow 9% over the next 12 months, an improvement versus the last two years. This projection is particularly healthy for a company of its scale and implies its newer products and services will spur better top-line performance.

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Adjusted operating margin

Adjusted operating margin is an important measure of profitability as it shows the portion of revenue left after accounting for all core expenses — everything from the cost of goods sold to advertising and wages. It’s also useful for comparing profitability across companies because it excludes non-recurring expenses, interest on debt, and taxes.

Molina Healthcare was profitable over the last five years but held back by its large cost base. Its average adjusted operating margin of 3.5% was weak for a healthcare business.

Analyzing the trend in its profitability, Molina Healthcare’s adjusted operating margin decreased by 3.7 percentage points over the last five years. The company’s two-year trajectory also shows it failed to get its profitability back to the peak as its margin fell by 3.8 percentage points. This performance was poor no matter how you look at it - it shows its expenses were rising and it couldn’t pass those costs onto its customers.

This quarter, Molina Healthcare generated an adjusted operating margin profit margin of 1.2%, in line with the same quarter last year. This indicates the company’s overall cost structure has been relatively stable.

Earnings per share

We track the long-term change in earnings per share (EPS) for the same reason as long-term revenue growth. Compared to revenue, however, EPS highlights whether a company’s growth is profitable.

Sadly for Molina Healthcare, its EPS declined by 32.2% annually over the last five years while its revenue grew by 11.6%. This tells us the company became less profitable on a per-share basis as it expanded due to non-fundamental factors such as interest expenses and taxes.

We can take a deeper look into Molina Healthcare’s earnings to better understand the drivers of its performance. As we mentioned earlier, Molina Healthcare’s adjusted operating margin was flat this quarter but declined by 3.7 percentage points over the last five years. This was the most relevant factor (aside from the revenue impact) behind its lower earnings; interest expenses and taxes can also affect EPS but don’t tell us as much about a company’s fundamentals.

In Q3, Molina Healthcare reported adjusted EPS of $0.89, down from $1.84 in the same quarter last year. Despite falling year on year, this print easily cleared analysts’ estimates. Over the next 12 months, Wall Street expects Molina Healthcare’s full-year EPS to grow 311% from $2 to $8.22.

Key takeaways from Molina Healthcare’s Q3 results

It was good to see Molina Healthcare beat analysts’ EPS expectations this quarter. We were also happy its revenue outperformed Wall Street’s estimates. Overall, this print had some key positives. The market seemed to be hoping for more, and the stock traded down 4.1% to $206.08 immediately following the results.

Big picture, is Molina Healthcare a buy here and now? We think that the latest quarter is only one piece of the longer-term business quality puzzle. Quality, when combined with valuation, can help determine if the stock is a buy. We cover that in our actionable full research report which you can read here (it’s free).