Molina Healthcare (NYSE:MOH) has enjoyed quite a bull run in recent months, up more than 50% since February 1st to an all-time high. In the past three months, Molina has announced four separate acquisitions projected to add 180,000 new members to their plans and $570 million to their annual top line. Can the price momentum continue, or has a peak been reached? Top line growth is key to the investment thesis in Molina, since the company’s margins aren’t great. Whether the company is under or overvalued depends on which metric you use: the stock trades at 33x earnings but a PEG ratio of only 0.9. I think there’s a lot of potential in Molina, but also some considerable risks.
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