Molina: Short-Term Headwinds Necessitate Holding

First Principles Partners1.54K FollowersFollow5ShareSavePlay(12min)CommentsSummaryMolina Healthcare is rated a hold due to short-term headwinds despite strong membership growth and customer satisfaction.MOH faces margin compression from rising medical loss ratios (92.6%) and impending ACA subsidy expiration, risking further earnings pressure.Despite a 30% premium increase planned for 2026, MOH’s value proposition and low P/S ratio suggest long-term upside if cost pressures ease.I remain cautious near-term but see MOH as a potential value play if subsidy and cost uncertainties resolve favorably. RapidEye/iStock via Getty Images Introduction and Investment Thesis I am optimistic about Molina Healthcare, Inc. (MOH) when I look at membership expansion, which grew by 30,000 to 5.6 million as of Q3’2025, but given the ongoing short-term headwinds, IThis article was written byFirst Principles Partners1.54K FollowersFollowFirst Principles Partners is an equity research analyst specializing in technology, innovation, and sustainability investment. My unique approach, "First Principles," involves breaking down complex problems to their most basic elements in terms of financial and technology, enabling me to uncover overlooked investment opportunities.With a strong background in investment, private equity and venture capital, I have a proven track record of delivering strong returns for readers. Articles on Seeking Alpha focus on emerging technologies, sustainable investing, and the intersection of innovation and finance. I am passionate about sharing insights with a wider audience and learning from fellow investors. Together, we can drive positive change and contribute to a more sustainable and innovative world.Analyst’s Disclosure:I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article. Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.