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Call sheet · Q4'25

Molina Healthcare (MOH)

Q4'25 earnings call · held February 6, 2026 · compared with the Q3'25 call · management-credibility review
8/12
Disclosure score
1 high, 3 medium, 4 low flags
Financial quality
Bottom line
The sleeper story is Florida CMS - a $6 billion revenue contract starting late 2026 that nobody's pricing in while everyone obsesses over margin compression. Yes, Q4 was ugly with a -$2.75 EPS miss, but MOH is playing a different game: they're still earning 300-400bp above peers even at the 'trough' and banking massive embedded earnings ($11+ per share). The binding constraint isn't demand, it's the rate cycle - states are 6 quarters into underfunding but early 2026 discussions show momentum. CEO Zubretsky: 'Even at this low point in the cycle, we remain optimistic about the future earnings trajectory...every 100 basis points on the Medicaid MCR is worth nearly $5 per share.' My view changes if California retroactive clawbacks spread to other states or if the Florida contract ramp disappoints.

The 30-second version

  • Florida CMS contract is the sleeper - $6B annual revenue starting late 2026
  • Medicaid margins bottoming at 1.6% pretax, but MOH operates 300-400bp above peers
  • California retroactive clawbacks worth $2/share continue into 2026

What changed this quarter

MetricQ3'25Q4'25Change
Adjusted EPS$1.84 (Q3)-$2.75 (Q4)Massive miss, $4.59 swing negative
Premium Revenue$10.8B (Q3)$10.7B (Q4)Flat sequentially, up 11% YoY
Consolidated MCR92.6% (Q3)Not disclosed (Q4)Management stopped reporting consolidated Q4 MCR
Medicaid MCR92.0% (Q3)93.5% (Q4)+150bp deterioration, 160bp from CA retros
Medicare MCR93.6% (Q3)97.5% (Q4)+390bp blowup, LTSS and drugs
Marketplace MCR95.6% (Q3)99.0% (Q4)+340bp deterioration, prior period settlements
Full Year Medicaid Trend6% then raised to 7%7.5% actual+150bp vs initial, +50bp vs Q3 raise
2026 EPS Guidance$14 initial outlook (Q3)At least $564% cut from Q3 outlook
Embedded Earnings$8.65 (Q3)$11+ per share+$2.35 boost from Florida CMS
Operating Cash Flow (FY)-$237M (9M)-$535M (FY)Negative $535M outflow vs positive historically

Accountability tracked

8 new promises made5 narrative shifts flagged6 prior promises scored
Inside the full report
The complete write-up covers the full promise ledger with kept/missed calls, disclosure-quality scoring, the metrics-vanished check, verification items, and the questions to ask next quarter.
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Scores, kept-promise rates, and flags on this site reflect the author's opinion, applying a stated methodology to statements management made on public earnings calls. Informational and educational purposes only - not investment advice, a recommendation, or an offer to buy or sell any security. Sources believed reliable but not guaranteed; the author may hold positions in the securities discussed.

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