Centene (CNC) AI Stock Analysis

• Market Cap: $13.32B
• Dividend Yield: N/A
• Average Volume (3M): 16.35M
• Price to Earnings (P/E): 7.0
• Beta (1Y): -0.01
• Revenue Growth: 12.96%
• EPS Growth: -23.25%
• Country: US
• Employees: 60,400
• Sector: Healthcare
• Sector Strength: 37
• Industry: Medical - Healthcare Plans
• EPS (TTM): -0.16
• Shares Outstanding: 497,603,000
• 10 Day Avg. Volume: 21,051,480
• 30 Day Avg. Volume: 16,346,600
• PEG Ratio: 0.54
• Price to Book (P/B): 0.50
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 9.47
• Enterprise Value/Market Cap: 1.29
• Enterprise Value/Revenue: 0.17
• Enterprise Value/Gross Profit: 6.76
• Enterprise Value/Ebitda: 5.02
• 1Y Price Target: $41.21
• Price Target Upside: 45.16% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 16

• Rating: 72 Outperform
• Price Target: $30.00 ▲(5.67%Upside)

Centene's strong financial performance with robust revenue growth and operational efficiency is a significant positive factor. The undervalued P/E ratio further supports a favorable valuation outlook. However, bearish technical indicators and challenges highlighted in the earnings call, such as increased medical expenses and high drug costs, temper the overall score.

Positive Factors

Exchange Subsidies

Extension of the enhanced subsidies may improve the outlook for HIX beyond 2025, and state rate updates may prove more positive than expected.

Medical Utilization

Potential upside surprise if medical utilization improves.

Negative Factors

Guidance Withdrawal

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

Legislative Reforms

Legislative reforms weigh down growth in Medicaid and ACA exchanges.

Revenue Headwind

CNC cited a first look at 2025 Wakely data that indicated market morbidity data on the Exchanges was significantly higher than CNC’s assumptions.

Centene Business Overview & Revenue Model

Company Description

Centene Corporation is a leading multi-national healthcare enterprise that provides a portfolio of services to government-sponsored and commercial healthcare programs. The company operates primarily in the United States and is dedicated to improving the health of its members through innovative programs and services. Centene specializes in providing managed care solutions to individuals receiving benefits under Medicaid, Medicare, and the Health Insurance Marketplace. The company's core services include health insurance plans, pharmacy benefits management, behavioral health services, and other related healthcare solutions.

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 with a 10.53% increase, solid operational efficiency with a 3.41% EBITDA margin, and stable profit margins. The balance sheet shows moderate leverage with a debt-to-equity ratio of 0.66 and effective equity utilization with a ROE of 12.37%. However, cash flow management has room for improvement despite a significant recovery in free cash flow growth.

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	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	163.07B	154.00B	144.55B	125.98B	111.11B
Gross Profit	16.83B	17.32B	16.66B	14.20B	15.22B
EBITDA	6.20B	5.62B	4.06B	3.81B	4.76B
Net Income	3.31B	2.70B	1.20B	1.35B	1.81B
Balance Sheet
Total Assets	82.44B	84.64B	76.87B	78.38B	68.72B
Cash, Cash Equivalents and Short-Term Investments	16.68B	19.65B	14.39B	14.66B	12.38B
Total Debt	19.43B	18.88B	21.33B	22.66B	16.78B
Total Liabilities	55.94B	58.69B	52.63B	51.35B	42.76B
Stockholders Equity	26.41B	25.84B	24.06B	26.80B	25.77B
Cash Flow
Free Cash Flow	-490.00M	7.25B	5.26B	3.29B	4.63B
Operating Cash Flow	154.00M	8.05B	6.26B	4.21B	5.50B
Investing Cash Flow	-1.05B	-1.19B	-2.92B	-3.30B	-6.96B
Financing Cash Flow	-2.41B	-1.66B	-4.20B	1.36B	260.00M

Centene Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 28.39
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• 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 28.39 is below the 20-day moving average (MA) of 34.14, below the 50-day MA of 47.51, and below the 200-day MA of 57.68, indicating a bearish trend. The MACD of -6.20 indicates Negative momentum. The RSI at 26.60 is Positive, neither overbought nor oversold. The STOCH value of 29.46 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
HUM	75 Outperform	$27.66B	16.21	10.09%	1.49%	10.09%	-12.18%
CNC	72 Outperform	$13.32B	7.02	7.50%	―	12.96%	-23.25%
CVS	72 Outperform	$78.24B	14.77	7.00%	4.38%	4.84%	-26.54%
CI	68 Neutral	$78.52B	16.86	12.37%	1.96%	24.65%	48.38%
ELV	67 Neutral	$63.15B	12.62	12.48%	2.31%	10.21%	-17.79%
MOH	65 Neutral	$10.31B	9.38	23.93%	―	16.12%	10.99%
Sector *	52 Neutral	$7.60B	0.11	-62.95%	2.07%	16.16%	0.31%

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.