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Molina Healthcare, Inc. (MOH) Intrinsic Value

DCF-based fair value calculation with Bear, Base, and Bull scenarios

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Molina Healthcare, Inc. (MOH)

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Intrinsic Value (DCF)

Current$193.74
→
Intrinsic$608.85
+214%
$423.47$608.85$960.85
Market implies 1% growth for 5 years
DCF analysis suggests MOH could have 214% upside at 19% growth — verify assumptions match your view.
At $194, the market prices in only 1% growth — below historical 19%, suggesting low expectations.
Range: Bear $423 → Bull $961. Current price implies expectations below the bear case — very conservative expectations.
Discount ↓Growth →15%17%19%21%
8%$735$794$858$925
10%$525$566$609$655
12%$409$439$471$506
14%$335$359$384$411

Bull Case

  • Bull case ($961) offers 396% upside at 23% growth, 9% discount
  • Price below even worst-case scenario — strong margin of safety
  • Market-implied growth (1%) ≤ historical CAGR (19%)

Bear Case

  • Bear case ($423) with 15% growth, 12% discount rate
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5-Year Net Income Projection

Year 1$1.41B
Year 2$1.68B
Year 3$2.00B
Year 4$2.39B
Year 5$2.85B
Terminal$41.90B

📐 Model Inputs

Growth Rate19.3%5Y CAGR (cascade: 5Y→3Y→TTM)
Discount Rate10.0%WACC estimate
Terminal Growth3.0%Perpetuity rate
Base Net Income$1.18BTTM actual
Bear g×0.8, r+2%
Base Historical CAGR
Bull g×1.2, r−1.5%
ℹ️

DCF estimates based on historical growth rates extrapolated forward. Uses Net Income (FCF not meaningful for insurers). See FAQ below for full methodology.

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Frequently Asked Questions

Is MOH stock undervalued or overvalued?
🟢 UNDERVALUED

MOH trades at $193.74 vs. our DCF-derived intrinsic value of $608.85, implying +230% upside. At a 10.0% WACC and 19.3% projected FCF growth, the market appears to be underpricing the present value of MOH's future cash flows. The bear case ($410.64) still suggests upside, providing margin of safety.

What is MOH's intrinsic value?

Using a 5-year DCF model: Base FCF of $1.18B, projected at 19.3% 5Y CAGR (best of revenue, EPS, or FCF growth), discounted at 10.0% WACC, with 3.0% terminal growth. Terminal value calculated via Gordon Growth Model: TV = FCF₅ × (1+g) / (WACC−g). After deducting $-1.54B net debt and dividing by 0.06B shares: Bear $410.64 | Base $608.85 | Bull $899.29. Current price $193.74 implies +230% to base case.

How is MOH's fair value calculated?

DCF Methodology:

① Project FCF years 1-5 using 19.3% growth derived from 5-year historical CAGR (best of revenue, EPS, or FCF growth, with 8% floor and 25% cap).

② Calculate terminal value at year 5 using perpetuity growth model with g=3.0%.

③ Discount all cash flows to PV using WACC=10.0%.

④ Sum PV of explicit period + PV of terminal value = Enterprise Value ($33.59B).

⑤ Subtract net debt, divide by shares outstanding.

Sensitivity analysis available above—adjust WACC ±2% or growth ±3% to stress-test the valuation. Implied EV/FCF multiple: 28.5x.