Magellan Health, Inc. (MGLN) Stock Analysis

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• A 9-signal quantitative MoonshotScore built from filings, insider activity, and market data — computed from the numbers, not from opinion.
• An AI Council read across up to eight perspectives — value, macro, quantitative, and momentum lenses — that shows where they disagree instead of averaging the tension away.
• Figures come straight from FMP and Yahoo Finance filings data. The AI writes the narrative around the numbers — it never edits the numbers.

Magellan Health, Inc. (MGLN) Healthcare & Pipeline Overview

Magellan Health, Inc. delivers specialized healthcare management and pharmacy benefit solutions, focusing on behavioral health and government-sponsored programs. As a subsidiary of Centene Corporation, Magellan leverages its expertise to serve diverse clients, including health plans, employers, and state governments, within the evolving healthcare landscape.

What Is the Investment Thesis for MGLN?

Magellan Health, Inc., as a subsidiary of Centene Corporation, presents a focused investment profile within the healthcare management sector. The company's expertise in behavioral health and pharmacy benefit management positions it to capitalize on the growing demand for specialized healthcare services. Magellan's contracts with state Medicaid agencies and CMS provide a stable revenue stream. However, the company's relatively low gross margin of 2.6% and high P/E ratio of 605.3 warrant careful consideration. Growth catalysts include expanding its service offerings and leveraging Centene's resources. Potential risks involve regulatory changes and competitive pressures within the healthcare management industry. Investors should monitor Magellan's ability to improve profitability and maintain its market position within the evolving healthcare landscape.

Based on FMP financials and quantitative analysis

MGLN Key Highlights

Magellan Health operates in two key segments: Healthcare and Pharmacy Management, providing diversified revenue streams.

• The company's P/E ratio is 605.3, indicating a high valuation relative to earnings.
• Magellan Health has a low gross margin of 2.6%, suggesting potential challenges in profitability.
• The company's beta of 1.04 indicates market-correlated volatility.
• Magellan Health is a subsidiary of Centene Corporation since January 4, 2022, providing access to broader resources and market reach.

Who Are MGLN's Competitors?

MGLN is benchmarked below against 8 industry peers on price, market cap, and our AI MoonshotScore.

AI Score by Stock Expert AI · Price data: FMP / Yahoo Finance

What Are MGLN's Key Strengths?

Expertise in behavioral health management.

• Established relationships with state Medicaid agencies and CMS.
• Integrated pharmacy benefit management solutions.
• Part of Centene Corporation, providing access to resources.

What Are MGLN's Weaknesses?

Low gross margin.

• High P/E ratio.
• Dependence on government contracts.
• Potential for regulatory changes to impact revenue.

What Could Drive MGLN Stock Higher?

Expansion of telehealth services to improve access to care.

• Integration with Centene Corporation to leverage resources and expertise.
• Potential for new contracts with state Medicaid agencies.
• Development of innovative healthcare solutions to address emerging needs.

What Are the Key Risks for MGLN?

Rich valuation — a P/E of 605.3 runs well above the Healthcare sector’s ~23x, leaving little room for a miss.

• Regulatory changes impacting Medicaid and Medicare programs.
• Competition from larger healthcare insurers.
• Economic downturn affecting employer-sponsored health plans.
• Rising healthcare costs impacting profitability.

What Are the Growth Opportunities for MGLN?

• Expansion of Behavioral Health Services: The increasing awareness and demand for mental health services present a significant growth opportunity for Magellan Health. By expanding its network of behavioral health professionals and offering innovative telehealth solutions, Magellan can capture a larger share of the growing market. The global behavioral health market is projected to reach $242.1 billion by 2027, growing at a CAGR of 3.5% from 2020. Magellan can leverage its expertise to provide comprehensive behavioral health solutions to health plans, employers, and government entities.
• Increased Focus on Specialty Pharmacy Management: The rising costs of specialty drugs create a need for effective pharmacy benefit management solutions. Magellan can capitalize on this trend by expanding its specialty pharmacy management programs and offering integrated solutions that combine clinical and financial management. The specialty pharmacy market is expected to reach $400 billion by 2026. Magellan's expertise in managing complex conditions and its ability to negotiate favorable drug prices position it to capture a significant share of this market.
• Leveraging Centene Corporation's Resources: As a subsidiary of Centene Corporation, Magellan has access to a broader range of resources and expertise. Magellan can leverage Centene's existing infrastructure, technology, and relationships to expand its service offerings and reach new markets. Centene's extensive network of providers and its experience in managing government-sponsored programs can help Magellan to enhance its capabilities and improve its competitive position.
• Expansion into New Geographic Markets: Magellan can expand its geographic footprint by targeting new states and regions with unmet healthcare needs. By partnering with local providers and leveraging its expertise in managing government-sponsored programs, Magellan can establish a presence in new markets and generate additional revenue streams. The company can focus on states with growing Medicaid populations and increasing demand for behavioral health services.
• Development of Innovative Healthcare Solutions: Magellan can invest in the development of innovative healthcare solutions that address emerging needs and improve patient outcomes. This includes developing telehealth platforms, data analytics tools, and personalized care programs. By leveraging technology and data, Magellan can enhance its service offerings and differentiate itself from competitors. The company can also explore partnerships with technology companies and research institutions to accelerate innovation.

What Are MGLN's Competitive Advantages?

• Established relationships with state Medicaid agencies and CMS.
• Expertise in behavioral health management.
• Integrated pharmacy benefit management solutions.
• Access to Centene Corporation's resources and network.

What Does MGLN Do?

Magellan Health, Inc. was incorporated in 1969 and has evolved into a prominent healthcare management services provider. Headquartered in Phoenix, Arizona, the company operates through two primary segments: Healthcare and Pharmacy Management. The Healthcare segment offers specialized carve-out management services for behavioral health, employee assistance programs, and other specialty healthcare areas like diagnostic imaging and musculoskeletal management. Magellan partners with state Medicaid agencies and the Centers for Medicare and Medicaid Services (CMS) to manage care for beneficiaries under Medicaid and Medicare programs, providing access to a network of medical and behavioral health professionals, clinics, hospitals, and other service providers. The Pharmacy Management segment delivers clinical and financial management of pharmaceuticals paid under medical and pharmacy benefit programs. This includes pharmacy benefit management services, pharmaceutical dispensing, and programs for integrated management of specialty drugs. Magellan serves a diverse clientele, including health plans, managed care organizations, employers, labor unions, third-party administrators, state governments, military and governmental agencies, exchanges, brokers, and consultants. Since January 4, 2022, Magellan Health, Inc. operates as a subsidiary of Centene Corporation, further solidifying its position in the healthcare management sector.

What Products and Services Does MGLN Offer?

• Provides carve-out management services for behavioral health.
• Offers employee assistance programs (EAPs).
• Manages specialty healthcare services, including diagnostic imaging and musculoskeletal management.
• Contracts with state Medicaid agencies to manage care for beneficiaries.
• Partners with the Centers for Medicare and Medicaid Services (CMS) to manage care under Medicare programs.
• Offers pharmacy benefit management services.
• Provides pharmaceutical dispensing services.
• Manages specialty drugs for complex conditions.

How Does MGLN Make Money?

• Generates revenue through contracts with health plans and managed care organizations.
• Earns fees for providing pharmacy benefit management services.
• Receives payments from state Medicaid agencies and CMS for managing care.
• Provides services to employers, labor unions, and third-party administrators.

What Industry Does MGLN Operate In?

Magellan Health operates within the healthcare management industry, which is characterized by increasing demand for specialized services, particularly in behavioral health and pharmacy benefit management. The industry is driven by factors such as an aging population, rising healthcare costs, and increasing prevalence of chronic diseases. The competitive landscape includes large healthcare insurers, pharmacy benefit managers, and specialized healthcare service providers. Magellan's focus on government-sponsored programs and its relationship with Centene Corporation position it to capitalize on market trends and navigate the competitive environment.

Who Are MGLN's Key Customers?

• Health plans and managed care organizations.
• Employers and labor unions.
• State governments.
• Military and governmental agencies.
• Third-party administrators.

Company Profile

Magellan Health, Inc. operates in the Medical - Healthcare Plans industry within the Healthcare sector. It is headquartered in Phoenix, US. The company is led by CEO Kenneth Fasola. MGLN has traded publicly since 2004.

Magellan Health, Inc. has beaten Wall Street's EPS estimate in 4 of its last 8 reported quarters — more hits than misses. Reported results have landed about 18.5% above estimates on average.

Return on equity for Magellan Health, Inc. stands at 0.2%, a gauge of how efficiently it converts shareholder capital into profit. Return on assets is 0.1%, showing how much profit it generates from its asset base. MGLN trades at a trailing price-to-earnings ratio of 605.27, above the Healthcare sector average of ~23x. A current ratio of 2.92 indicates the company holds enough short-term assets to cover its near-term obligations. Its earnings yield is 0.2%, the inverse of the P/E and a quick read on earnings relative to price.

MGLN Valuation & Market Position

Relative to its peer group, MGLN's quantitative score of 41/100 is below the peer average of 64/100.

MGLN Financials

MGLN Latest News

No recent news available for MGLN.

MGLN Analyst Consensus

MGLN MoonshotScore

MGLN Healthcare Stock FAQ

Disclaimer: This content is for informational purposes only and does not constitute investment advice. Always do your own research and consult a financial advisor.

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