Centene (CNC) AI Stock Analysis

• Market Cap: $16.58B
• Dividend Yield: N/A
• Average Volume (3M): 7.66M
• Price to Earnings (P/E): 5.0
• Beta (1Y): -0.01
• Revenue Growth: 8.85%
• EPS Growth: 33.30%
• Country: US
• Employees: 60,400
• Sector: Healthcare
• Sector Strength: 39
• Industry: Medical - Healthcare Plans
• EPS (TTM): 2.90
• Shares Outstanding: 497,603,000
• 10 Day Avg. Volume: 15,021,728
• 30 Day Avg. Volume: 7,662,355
• PEG Ratio: 0.01
• Price to Book (P/B): 0.97
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 18.14
• Enterprise Value/Market Cap: 1.84
• Enterprise Value/Revenue: 0.05
• Enterprise Value/Gross Profit: 1.17
• Enterprise Value/Ebitda: 1.27
• 1Y Price Target: $63.08
• Price Target Upside: 89.37% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 15

• Rating: 71 Outperform
• Price Target: $37.00 ▲(11.08%Upside)

Centene's strong financial performance and undervaluation are significant positives. However, the bearish technical indicators and challenges highlighted in the earnings call, such as increased medical expenses, weigh on the overall score.

Positive Factors

Medicare Performance

Centene saw better than expected trends in its Medicare Advantage business, which is positive for Humana and UnitedHealth.

SG&A Expense Leverage

Improved SG&A expense leverage is expected to provide some financial relief despite the overall negative outlook.

Negative Factors

Exchange Risk Adjustment

The company estimated a $1.8bn reduction to the company's risk adjustment revenue transfer expectation.

Guidance Withdrawal

CNC announced the withdrawal of 2025 guidance, primarily driven by the Marketplace business.

Medicaid Cost Trends

CNC called out an increase in medical cost trend in Medicaid from behavioral health, home health, and high-cost drugs.

Centene Business Overview & Revenue Model

Company Description

Centene Corporation operates as a multi-national healthcare enterprise that provides programs and services to under-insured and uninsured individuals in the United States. Its Managed Care segment offers health plan coverage to individuals through government subsidized programs, including Medicaid, the State children's health insurance program, long-term services and support, foster care, and medicare-medicaid plans, which cover dually eligible individuals, as well as aged, blind, or disabled programs. Its health plans include primary and specialty physician care, inpatient and outpatient hospital care, emergency and urgent care, prenatal care, laboratory and X-ray, home-based primary care, transportation assistance, vision care, dental care, telehealth, immunization, specialty pharmacy, therapy, social work, nurse advisory, and care coordination services, as well as prescriptions and limited over-the-counter drugs, medical equipment, and behavioral health and abuse services. This segment also offers various individual, small group, and large group commercial healthcare products to employers and directly to members. The company's Specialty Services segment provides pharmacy benefits management services; nurse advice line and after-hours support services; vision and dental services, as well as staffing services to correctional systems and other government agencies; and services to Military Health System eligible beneficiaries. This segment offers its services and products to state programs, correctional facilities, healthcare organizations, employer groups, and other commercial organizations. The company provides its services through primary and specialty care physicians, hospitals, and ancillary providers. Centene Corporation was founded in 1984 and is headquartered in St. Louis, Missouri.

How the Company Makes Money

Centene Corporation generates revenue primarily through the provision of managed healthcare services to government-sponsored programs such as Medicaid, Medicare, and the Health Insurance Marketplace. The company receives capitated payments from the government, which are fixed amounts per member, per month, to cover the cost of providing healthcare services to enrolled members. Additionally, Centene earns revenue from premiums paid by individual and group members who purchase health insurance plans. The company also benefits from its pharmacy benefits management services, which involve negotiating drug prices and managing prescription drug benefits for its members. Key partnerships with state and federal governments, healthcare providers, and pharmaceutical companies play a significant role in Centene's ability to offer comprehensive and cost-effective healthcare solutions, thereby contributing to its overall earnings.

Centene Financial Statement Overview

Summary

Centene exhibits strong revenue growth and operational efficiency, supported by stable profit margins. The balance sheet shows moderate leverage and robust equity utilization, though there's potential to optimize cash flow generation. Overall, Centene is well-positioned in the Medical - Healthcare Plans industry with its solid financial performance.

Income Statement

Centene's income statement shows robust revenue growth with a 10.53% increase from 2023 to TTM (Trailing-Twelve-Months). The gross profit margin stands at 15.47%, while the net profit margin is 2.04%. Although the EBIT margin is 2.13%, it is complemented by a healthy EBITDA margin of 3.41%, indicating strong operational efficiency. Overall, the company demonstrates solid revenue growth and stable profitability.

Balance Sheet

The balance sheet reflects a solid equity base with a debt-to-equity ratio of 0.66, indicating moderate leverage. The return on equity (ROE) is 12.37%, showcasing effective utilization of equity. The equity ratio is 32.06%, highlighting a strong capital structure. While the company's leverage is manageable, there is room for improvement in equity utilization.

Cash Flow

Operating cash flow to net income ratio is 0.61, suggesting moderate cash generation relative to net income. The free cash flow to net income ratio is 0.43, indicating room for improvement in free cash flow generation. The free cash flow growth rate of 405% from 2024 to TTM shows significant recovery, yet overall cash flow management can be enhanced.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	169.28B	163.07B	154.00B	144.55B	125.98B	111.11B
Gross Profit	26.19B	34.63B	31.54B	16.66B	14.20B	15.22B
EBITDA	6.16B	4.96B	5.62B	4.06B	3.95B	4.76B
Net Income	3.45B	3.31B	2.70B	1.20B	1.35B	1.81B
Balance Sheet
Total Assets	87.04B	82.44B	84.64B	76.87B	78.38B	68.72B
Cash, Cash Equivalents and Short-Term Investments	17.29B	16.68B	19.65B	14.39B	14.66B	12.38B
Total Debt	18.32B	19.43B	18.88B	18.02B	18.84B	16.78B
Total Liabilities	59.02B	55.94B	58.69B	52.63B	51.35B	42.76B
Stockholders Equity	27.92B	26.41B	25.84B	24.06B	26.80B	25.77B
Cash Flow
Free Cash Flow	1.49B	-490.00M	7.25B	5.26B	3.29B	4.63B
Operating Cash Flow	2.12B	154.00M	8.05B	6.26B	4.21B	5.50B
Investing Cash Flow	-2.43B	-1.05B	-1.19B	-2.92B	-3.30B	-6.96B
Financing Cash Flow	-2.68B	-2.41B	-1.66B	-4.20B	1.36B	260.00M

Centene Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 33.31
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Positive
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For CNC, the sentiment is Negative. The current price of 33.31 is below the 20-day moving average (MA) of 52.64, below the 50-day MA of 56.67, and below the 200-day MA of 61.02, indicating a bearish trend. The MACD of -3.75 indicates Positive momentum. The RSI at 15.68 is Positive, neither overbought nor oversold. The STOCH value of 27.40 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for CNC.

Centene Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
CVS	79 Outperform	$85.30B	16.11	7.00%	3.99%	4.84%	-26.54%
HUM	77 Outperform	$28.93B	16.95	10.09%	1.45%	10.09%	-12.18%
MOH	72 Outperform	$12.99B	11.57	26.72%	―	16.71%	12.23%
CNC	71 Outperform	$16.58B	4.96	12.59%	―	8.85%	33.30%
CI	71 Outperform	$85.42B	17.72	12.37%	1.89%	24.65%	48.38%
ELV	71 Outperform	$78.59B	13.57	14.24%	1.95%	6.63%	-3.26%
Sector *	50 Neutral	kr5.44B	12.69	-80.61%	5.08%	37.36%	27.71%

Centene Corporate Events

Centene Holds Annual Meeting, Elects New Directors

On May 13, 2025, Centene held its Annual Meeting where key decisions were made regarding the company’s governance and strategic plans. The meeting saw the election of eleven directors for a one-year term, approval of executive compensation, ratification of KPMG LLP as the accounting firm for 2025, and the approval of the 2025 Stock Incentive Plan. However, shareholder proposals related to climate change and climate risk reporting were not approved.

The most recent analyst rating on (CNC) stock is a Hold with a $64.00 price target. To see the full list of analyst forecasts on Centene stock, see the CNC Stock Forecast page.

Centene Reaffirms 2025 Earnings Guidance to Investors

On May 6, 2025, Centene Corporation’s senior management will meet with investors to reaffirm their 2025 earnings guidance, maintaining a GAAP diluted EPS floor of greater than $6.19 and an adjusted diluted EPS floor of greater than $7.25. The company emphasizes the use of non-GAAP financial measures to provide a clearer picture of its core operations, cautioning that these metrics may differ from those of other companies, and encourages a comprehensive review of its financial statements.