What Happened?
Shares of healthcare insurance company Molina Healthcare (NYSE: MOH) fell 20.8% in the afternoon session after a sector-wide sell-off as competitor Centene pulled its full-year financial guidance.
Centene cited that market growth was "lower than expected" and the number of people making claims was much higher than forecast. This news has sparked fears among investors that the entire health insurance sector could be facing similar headwinds of rising costs and challenging market conditions.
The negative sentiment quickly spread, impacting peers like Molina, UnitedHealth Group, and Elevance Health. Investors are now concerned that Molina, which also has significant exposure to government-sponsored health plans, could face similar pressures on its profitability, leading to a broad sell-off across the industry.
The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks. Is now the time to buy Molina Healthcare? Access our full analysis report here, it’s free.
What The Market Is Telling Us
Molina Healthcare’s shares are quite volatile and have had 16 moves greater than 5% over the last year. But moves this big are rare even for Molina Healthcare and indicate this news significantly impacted the market’s perception of the business.
Molina Healthcare is down 15.6% since the beginning of the year, and at $242.58 per share, it is trading 32.8% below its 52-week high of $360.77 from September 2024. Investors who bought $1,000 worth of Molina Healthcare’s shares 5 years ago would now be looking at an investment worth $1,332.
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