Molina Healthcare heads into its May 8 Q1 2026 earnings call in a dramatically different position than it held just six weeks ago — short sellers in retreat, options hedgers standing down, and the stock up 42% in a month.
The most striking signal is in the short book. Short interest peaked at roughly 9.3% of the lending pool being used in mid-April, then collapsed to just 5.7% of free float by May 5. That represents a roughly 18% reduction in shares short over the past month. Borrow costs reflect the change: the cost to borrow has fallen 27% over the past week to just 0.35%, the kind of rate that signals no meaningful squeeze pressure remains. Availability has loosened in tandem. Options traders have followed suit — the put/call ratio, which spent most of April above 1.40, has dropped to 1.15, now running about 1.6 standard deviations below its 20-day average of 1.33. That's a near-complete reversal of defensive positioning: where the spring was defined by hedging, traders into this print are measurably less bearish.
The bull and bear cases remain sharply contested, however, and the Street's posture is notably cautious even after the rally. The analyst consensus is technically "buy," but only just — there are three buy ratings against one underperform, and the mean price target of $174 sits roughly 12% below the current price of $197. Every analyst who updated their target in the last two weeks — Wells Fargo, Truist, UBS, Barclays, and Morgan Stanley — raised it, but none chased the move; the highest revised target was $180. The RSI14 at 74.7 confirms the stock is technically overbought, and the analyst return potential factor ranks in the 97th percentile precisely because the Street's targets are so far below the market price. Bulls point to improving Medicaid managed benefit risk and the potential for EPS growth from conservative 2026 guidance proving beatable. Bears cite the harder structural picture: Medicaid rate and acuity mismatches, compressed margins versus peers, eAPTC pressure on the Marketplace book, and residual uncertainty around a potential MAPD exit in 2027. Mizuho, the sole Outperform holdout in recent months, had already trimmed its target to $180 back in March — a signal that even the optimists see a narrower upside case.
BlackRock added over 3.1 million shares in the most recent filing period — a material increase that now puts it at 11.7% of outstanding shares, narrowly ahead of Vanguard's 11.7%. That flow of institutional capital into the dip likely helped fuel the rebound. Insider activity tells a different story: the CEO sold $1.3 million of stock in late February at $154, and the CFO and COO followed with their own sales the same day. Those trades were executed at prices well below where the stock trades today, but the cluster of executive selling — six insiders on the same day — is a data point the print will need to address if management is to reclaim conviction among sceptics.
The Q1 report is therefore less a test of whether Molina can post a clean quarter and more a referendum on whether a 42% rally in a month is justified by the underlying Medicaid and Marketplace trends — or whether the Street's collective caution, embodied in targets nearly $25 below the current price, is the more durable read on the business.
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