A class action lawsuit was filed against Centene Corp. (CNC) by Levi & Korsinsky on July 9, 2025. The plaintiffs (shareholders) alleged that they bought CNC stock at artificially inflated prices between December 12, 2024, and June 30, 2025 (Class Period) and are now seeking compensation for their financial losses. Investors who bought Centene stock during that period can click here to learn about joining the lawsuit.
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Centene is a healthcare company that provides a wide range of managed healthcare services, primarily focusing on government-sponsored programs. The company operates through various segments, including Medicaid, Medicare, and Health Insurance Marketplace programs.
The company’s claims about its enrollment and morbidity rates are at the heart of the current complaint.
Centene’s Misleading Claims
According to the lawsuit, Centene and two of its senior officers and/or directors (the Defendants) repeatedly made false and misleading public statements throughout the Class Period. In particular, they are accused of omitting truthful information about the company’s revenue outlook and growth from SEC filings and related material.
During the Class Period, the defendants consistently reiterated the company’s strong performance. For instance, in a press release, the CEO stated that over the last three years, Centene’s core operations had improved and the company had invested in enhancing both customer and provider experiences. Additionally, Centene reiterated its FY24 adjusted diluted earnings per share (EPS) guidance of more than $6.80. The company also issued its FY25 adjusted diluted EPS guidance of more than $7.25, representing more than 6% year-over-year growth.
Additionally, during an earnings call held on February 4, the CEO mentioned that Centene had raised its FY25 sales guidance by $4 billion, backed by better-than-expected results during the Medicare annual enrollment period and a program expansion in Medicaid.
Furthermore, in a press release dated April 25, 2025, the CEO stated that Centene’s first-quarter results demonstrate the resiliency of its platform and the company’s progress amid a dynamic policy landscape. The CEO again reiterated the Fiscal 2025 adjusted diluted EPS outlook of more than $7.25, while the company continued to see attractive opportunities for growth from the strength of its core businesses in the future.
However, subsequent events (detailed below) reveal that the defendants failed to inform investors about the true state of Centene’s revenue and growth potential.
Plaintiffs’ Arguments
The plaintiffs maintain that the defendants deceived investors by lying and withholding critical information about the company’s prospects during the Class Period. Importantly, the defendants are accused of misleading investors about the company’s growth prospects in the coming years.
The information became clear on July 1, 2025, when Centene withdrew its fiscal 2025 guidance for GAAP and adjusted diluted EPS. Following an analysis of the 2025 Health Insurance Marketplace, Centene’s overall market growth across 22 states, representing 72% of the company’s marketplace membership, was lower than expected.
In pertinent part, the company stated that this preliminary analysis resulted in a reduction of its previously issued guidance to approximately $1.8 billion or an adjusted diluted EPS of $2.75. Following the news, CNC stock plunged by 40.4% on July 2.
The news also prompted Wall Street analysts to downgrade the stock and slash their price targets on CNC shares.
To conclude, the defendants misled investors about the true state of Centene’s enrollment and morbidity rates, and the impact these had on the company’s revenue and growth prospects. Due to these issues, CNC stock has lost nearly 53% so far this year.
