The Medibank (ASX: MPL) share price has gone backwards this past month. Is it a buy?

Some investors may be pondering whether now is a good time to buy the health fund’s shares.

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Shares in health insurance giant Medibank Private Ltd (ASX: MPL) are inching lower in afternoon trade and are changing hands less than 1% down at $3.36.

But zooming out on Medibank’s chart, it looks as if a 4-year old drew it while trying to stay within the lines.

The stock has rallied as high as $3.62 and traded as low as $3.32 in the 3-month period to date, and is down more than 7% in that time.

This may spark the interest of those who identify the recent share price pullback as a potential buying point. Let’s see what the experts think.

Is Medibank a buy right now?

The team at Morgans gives a mixed review of the Medibank share price. While the firm acknowledges the company’s policyholder growth statistics and operating margins are robust, it also recognises the share is trading near its fair value.

Even though Medibank reaffirmed its FY21 guidance measures in its AGM, Morgans alludes to a mild upgrade to the company’s FY22 policyholder growth estimates.

It notes that Medibank is “getting a good recent track record of upgrading policyholder growth guidance, with [the] upgrade following three similar ones in FY21”.

Even as it raised its valuation of Medibank shares to $3.55, the firm retained its hold rating and doesn’t advocate it as a buy right now.

The team at JP Morgan agrees and rates Medibank as neutral with a $3.30 share price target.

JP Morgan holds the theory that people will be more vigilant with their healthcare as a result of the pandemic. The investment bank cites regulator data for the 3 months until 30 September 2021, alluding to a 63,000 growth in private health fund membership.

However, whilst this is a step-up from previous numbers, the rate of growth in new memberships has slowed. Most notably, the 25-34-year-old age bracket recorded the largest falls.

Even in older age groups, JP Morgan says, “The proportion of members over the age of 70 years continues to expand which we attribute to the aging of the membership.”

From the list of analysts provided by Bloomberg Intelligence, 69% have Medibank as a hold whereas just 31% rate it as a buy.

Medibank share price summary

In the last 12 months, the Medibank share price has gained more than 18%, rallying almost 12% this year to date.

However, in the last month of trading, it has reversed course and is now more than 3% in the red in that time.

Should you invest $1,000 in Medibank Private right now?

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The author has no positions in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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