Medibank Private Ltd (ASX: MPL) shares have been under siege in recent weeks, having just bounced from 3-month lows.
Shares in the insurance giant are currently trading at $3.65 apiece, up just 2.1% this year to date.
At these levels, and after the recent sell-off, Medibank shares may seem attractive to value-seeking investors.
So is this stock a buy? Let's take a closer look.
Medibank shares under pressure
Medibank shares have been volatile for the better part of a year. Aside from being embroiled in a national data breach last year, the company's FY24 numbers didn't impress.
Revenues climbed by 4.7% to just over $8 billion, primarily driven by a 4% boost in premium income from its core Health Insurance business.
Although, despite a competitive market, Medibank managed to increase resident policyholders by 14,400, or 0.7%, year over year.
Still, this was below the company's expectations of 1.5% to 2% growth, and overall earnings were also below many broker expectations.
Looking forward, management is eyeing 2% to 3% policy growth and aiming to achieve $10 million in cost savings for the year.
Consensus looks for Medibank to earn 23 cents per share in FY25, up from 19.5 cents per share last year, according to CommSec.
This equals almost 18% year-over-year growth if it comes to fruition.
Are they a buy?
Brokers have mixed views on Medibank shares, but are generally bullish when analysing the distribution of ratings.
Ord Minnett, for instance, rates the stock a buy with a price target of $4.25.
The broker appreciates Medibank's consistent earnings and stable business mix, which offsets lower-than-expected policyholder growth.
It also forecasts Medibank shares to pay dividends of 17.5 cents in FY25 and 17.8 cents in FY26.
The stock is also rated a consensus buy, according to CommSec. This includes five buys against seven holds ratings.
What about management's perspective?
In the FY24 results, CEO David Koczkar conceded that Medibank's resident policyholder growth was weaker than anticipated, pointing to a competitive health insurance market.
Yet, he noted the company's non-resident business is growing rapidly, with net policy units up 25%, thanks in part to strong university partnerships.
"[G]iven the competitive market we remained disciplined about the best way to grow for the long term," Koczkar stated.
Medibank shares takeaway
Medibank shares have sold off recently, but brokers are still generally constructive on the stock.
Whether or not the timing is correct for you right now depends on a litany of factors, not the least long-term goals and risk preferences.
Zooming out, the stock is up more than 5% in the past year, having just bounced from three-month lows. It hit a 52-week high of $4.01 apiece in August.
