Molina Healthcare Inc (MOH) Financial Statements

Analyzing Molina Healthcare through the GoodMoat Quality Indicators reveals several areas of concern. The company's profitability metrics are thin, with a profit margin of 1.0% and an operating margin of 1.7%, which are low by most standards and do not indicate a high-quality, high-return business. The negative free cash flow (FCF) yield of -8.8% is a significant weakness, failing the framework's check for positive, growing FCF converting at a high rate. This suggests the company is not currently generating surplus cash for shareholders. The balance sheet is a relative strength, with a Debt/Equity ratio of 0.97, which is below the framework's cautionary threshold of 1.0x Debt/EBITDA, indicating manageable leverage. The Return on Equity (ROE) of 11.6% is below the framework's high-quality benchmark of 15-20%. Regarding growth, the 7.1% YoY revenue growth is consistent but modest, falling short of the double-digit, sustainable growth often associated with high-quality compounders. There is no indication of accelerating growth or a high CAGR that would signal a powerful growth trajectory. Overall, the financial profile shows a company with adequate balance sheet health but lacking the strong profitability, cash flow conversion, and high returns on capital that define a high-quality business under the framework. Analysis based on data as of 2024-05-15.