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Centene
(NYSE:CNC)
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Rating:60Neutral
Price Target:
$67.00
▲(5.66% Upside)
Action:Reiterated
Date:07/29/26
CNC scores moderately because strong cash generation, improving leverage, and a notably raised 2026 EPS outlook support the investment case, but the overall profile is held back by the recent profitability collapse reflected in the income statement and ongoing operational risks highlighted on the call (membership attrition, acuity/regulatory uncertainty, and nonrecurring Q2 benefits). Technicals are mixed and valuation is difficult to assess given the negative P/E and missing dividend yield.
Positive Factors
Strong cash generation
Centene’s trailing‑twelve‑month operating and free cash flow strength provides durable financial flexibility to fund operations, invest in cost and technology initiatives, and service debt even while GAAP earnings are pressured. Strong cash conversion supports sustained balance‑sheet repair and strategic investments over the next 2–6 months.
Negative Factors
Recent profitability deterioration
Centene’s recent swing to operating and net losses erodes shareholder returns and raises execution risk despite cash strength. Persistent negative earnings could limit strategic optionality (buybacks/dividends), pressure ROE, and necessitate sustained cost or rate improvements to convert cash flow into consistent GAAP profitability over the coming quarters.
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Positive Factors
Negative Factors
Strong cash generation
Centene’s trailing‑twelve‑month operating and free cash flow strength provides durable financial flexibility to fund operations, invest in cost and technology initiatives, and service debt even while GAAP earnings are pressured. Strong cash conversion supports sustained balance‑sheet repair and strategic investments over the next 2–6 months.
Read all positive factors
Centene Key Performance Indicators (KPIs)
Any
Revenue by Segment
Analyzes income from different business segments, revealing which areas are most profitable and where the company might expand or face challenges.
Analyzes income from different business segments, revealing which areas are most profitable and where the company might expand or face challenges.
Data provided by:
The Fly
The FlyCentene (CNC) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$30.74B
Dividend YieldN/A
Average Volume (3M)4.64M
Price to Earnings (P/E)―
Beta (1Y)0.40
Revenue Growth13.89%
EPS Growth-356.11%
CountryUS
Employees61,100
SectorHealthcare
Sector Strength45
IndustryMedical - Healthcare Plans
Share Statistics
EPS (TTM)-10.40
Shares Outstanding493,995,000
10 Day Avg. Volume3,909,819
30 Day Avg. Volume4,635,115
Financial Highlights & Ratios
PEG Ratio<0.01
Price to Book (P/B)1.01
Price to Sales (P/S)0.10
P/FCF Ratio4.68
Enterprise Value/Market Cap<0.01
Enterprise Value/Revenue<0.01
Enterprise Value/Gross Profit<0.01
Enterprise Value/Ebitda>-0.01
Forecast
1Y Price Target
$71.71Price Target Upside13.10% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering15
EPS Forecast (FY)4.59
Revenue Forecast (FY)$195.16B
Centene Business Overview & Revenue Model
Company Description
Centene Corporation operates as a managed care company that provides programs and services to under-insured families, and commercial organizations in the United States. It operates through four segments: Medicaid, Medicare, Commercial, and Other. ...
How the Company Makes Money
Centene makes money primarily by administering health benefits for members enrolled in government-sponsored programs and receiving premium revenue (often referred to as capitation) that is largely funded by federal and state governments (and, for ...
Centene Earnings Call Summary
Earnings Call Date:Jul 28, 2026
(Q2-2026)
| % Change Since: |
Next Earnings Date:Oct 27, 2026
Earnings Call Sentiment Positive
The call conveyed solid financial momentum and tangible operational progress: a Q2 EPS beat, raised full-year EPS guidance, margin improvements in Marketplace and PDP, better-than-expected state rate development for Medicaid, strong cash flow and balance-sheet improvements, and measurable cost-management wins (including AI-enabled initiatives). However, the company faces meaningful near-term headwinds: membership attrition (especially in Medicaid expansion), acuity shifts that could pressure medical cost ratios, regulatory/program uncertainty (OB3, STARS, eligibility verification), and a portion of Q2 upside tied to nonrecurring prior-period settlements. On balance, the positive guidance revisions, margin recoveries in key segments, cash and debt improvement, and demonstrated operating discipline outweigh the near-term risks flagged by management.Positive Updates
Q2 Earnings Beat and Raised Full-Year EPS Guidance
Q2 adjusted diluted EPS of $2.51 exceeded expectations. Management raised full-year 2026 adjusted diluted EPS guidance to greater than $4.80 (from prior >$3.40), driven by strong first-half results and favorable risk adjustment developments.
Negative Updates
Membership Attrition and Lower Year-End Medicaid Membership
Medicaid membership ended Q2 at ~12.1 million, modestly below expectations, and management now expects full-year Medicaid membership to be down 8%–9% vs. 12/31/25 (previous expectation down ~6%), representing a larger-than-anticipated attrition (≈2–3 percentage points worse versus prior view).
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Q2-2026 Updates
Positive
Negative
Q2 Earnings Beat and Raised Full-Year EPS Guidance
Q2 adjusted diluted EPS of $2.51 exceeded expectations. Management raised full-year 2026 adjusted diluted EPS guidance to greater than $4.80 (from prior >$3.40), driven by strong first-half results and favorable risk adjustment developments.
Read all positive updates
Company Guidance
Centene raised its 2026 outlook after a strong Q2: adjusted diluted EPS of $2.51 on $44.4B of premium and service revenue and now expects full‑year adjusted EPS > $4.80 (prior > $3.40), noting roughly $0.50 of Q2 EPS was nonrecurring (~$180M Marketplace, ~$160M PDP) tied to 2025 settlements. Key operating metrics: consolidated HBR 89.6% in Q2 (vs 93.0% LY); Medicaid HBR 93.9% (full‑year ~93.5% vs prior 93.7%), Medicaid membership 12.1M with full‑year membership now expected down 8–9% vs 12/31/25, and 7/1 rates lifting the composite Medicaid rate outlook from ~4.5% to ~5% (fundamental trend mid‑4s). Marketplace: ~3.5M members, Q2 HBR 79.2% (vs 90.6% LY) and full‑year pretax margin now 4.5–5% (vs prior 3%), helped by a $180M favorable 2025 risk‑adjustment development; PDP now expected to deliver >3% pretax margin (vs 2%), with PDP premium revenue ~ $25B and pharmacy spend > $60B. Expense and capital metrics: adjusted SG&A 6.9% in Q2 (vs 7.1% LY) and enterprise SG&A guidance improved by 10 bps with a ~ $480M midpoint workforce/optimization item; total revenue guidance rose ~$6B (only ~$2B of that is premium/service — $1.5B Marketplace, $0.5B Medicaid — with ~$4B premium tax pass‑through). Balance sheet/cash: $715M cash for corporate use, $260M of senior notes repurchased, debt‑to‑cap 41.6% (down from 46.5% YE), medical claims liability $20.3B (47 days), cash from operations $8.0B YTD ($3.6B Q2), and management expects to pay > $3B of Medicaid pass‑throughs in Q3; YTD adjusted EPS was $5.88, with management forecasting slightly above breakeven in Q3 and a Q4 loss as seasonality plays out while pursuing continued margin restoration into 2027.Centene Financial Statement Overview
Summary
Income Statement
28
Negative
Balance Sheet
55
Neutral
Cash Flow
72
Positive
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 193.73B | 194.78B | 163.07B | 154.00B | 144.55B | 125.98B |
| Gross Profit | 31.24B | 23.83B | 16.83B | 17.32B | 16.66B | 14.20B |
| EBITDA | -2.89B | -5.14B | 6.20B | 5.62B | 4.06B | 3.81B |
| Net Income | -5.10B | -6.67B | 3.31B | 2.70B | 1.20B | 1.35B |
Balance Sheet | ||||||
| Total Assets | 83.01B | 77.66B | 82.44B | 84.64B | 76.87B | 78.38B |
| Cash, Cash Equivalents and Short-Term Investments | 27.06B | 17.89B | 16.68B | 19.65B | 14.39B | 14.66B |
| Total Debt | 16.11B | 18.78B | 19.43B | 18.88B | 21.33B | 22.66B |
| Total Liabilities | 60.35B | 57.60B | 55.94B | 58.69B | 52.63B | 51.35B |
| Stockholders Equity | 22.56B | 19.95B | 26.41B | 25.84B | 24.06B | 26.80B |
Cash Flow | ||||||
| Free Cash Flow | 8.97B | 4.32B | -490.00M | 7.25B | 5.26B | 3.29B |
| Operating Cash Flow | 9.77B | 5.09B | 154.00M | 8.05B | 6.26B | 4.21B |
| Investing Cash Flow | 1.62B | 453.00M | -1.05B | -1.28B | -2.92B | -3.30B |
| Financing Cash Flow | -1.50B | -1.60B | -2.41B | -1.57B | -4.20B | 1.36B |
Centene Technical Analysis
Negative
63.41
Price Trends
63.62
Negative
53.04
Positive
46.60
Positive
Market Momentum
0.64
Positive
45.89
Neutral
21.91
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 63.41 is below the 20-day moving average (MA) of 65.37, below the 50-day MA of 63.62, and above the 200-day MA of 46.60, indicating a neutral trend. The MACD of 0.64 indicates Positive momentum. The RSI at 45.89 is Neutral, neither overbought nor oversold. The STOCH value of 21.91 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for CNC.
Centene Risk Analysis
Centene disclosed 34 risk factors in its most recent earnings report. Centene reported the most risks in the "Legal & Regulatory" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Centene Peers Comparison
UnderperformOutperform
Sector (51)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
74 Outperform | $73.74B | 11.51 | 15.24% | 2.12% | 8.15% | 31.47% | |
73 Outperform | $9.41B | -82.16 | -3.27% | ― | 31.95% | -180.28% | |
68 Neutral | $81.51B | 16.70 | 11.24% | 1.82% | 6.27% | -4.37% | |
63 Neutral | $43.69B | 34.15 | 6.91% | 0.91% | 18.33% | -18.53% | |
60 Neutral | $30.74B | -5.98 | -24.03% | ― | 13.89% | -356.11% | |
51 Neutral | $7.86B | -0.30 | -43.30% | 2.27% | 22.53% | -2.21% | |
51 Neutral | $10.21B | 1,222.62 | -0.17% | ― | 2.55% | -100.90% |
* Healthcare Sector Average
CNC
Centene
62.22
36.01
137.39%
CI
Cigna
279.05
18.24
6.99%
HUM
Humana
363.86
120.03
49.23%
MOH
Molina Healthcare
195.62
37.47
23.69%
ELV
Elevance Health
375.84
106.57
39.58%
OSCR
Oscar Health
31.22
17.38
125.58%
Centene Corporate Events
Business Operations and StrategyPrivate Placements and Financing
Centene Announces Partial Redemption of 2027 Notes
Positive
Jul 29, 2026
On July 29, 2026, Centene Corporation announced it would redeem $500,000,000 of its outstanding 4.25% notes due December 15, 2027, with the redemption scheduled for August 13, 2026 at par plus accrued interest. After this partial redemption, appro...
Business Operations and StrategyExecutive/Board ChangesFinancial Disclosures
Centene Posts Strong Q2 Results, Raises 2026 Guidance
Positive
Jul 28, 2026
Centene said that on July 23, 2026, director Kenneth Burdick notified the company he would resign from its board and the Quality and Compliance Committee effective July 28, 2026, with the move not stemming from any disagreement over operations or ...
Business Operations and StrategyExecutive/Board Changes
Centene Adds Veteran Executive Lauren Tyler to Board
Positive
Jun 22, 2026
Centene Corporation announced that effective June 19, 2026, its board expanded from nine to ten members and elected veteran banking and human-capital executive Lauren M. Tyler as a director, with her term running until the 2027 annual meeting. Tyl...
Business Operations and StrategyExecutive/Board ChangesShareholder Meetings
Centene refreshes leadership team and affirms governance direction
Positive
May 15, 2026
On May 12, 2026, Centene’s board confirmed a refreshed senior leadership roster aligned with its core businesses, naming CEO Sarah London, CFO Drew Asher, COO Susan Smith, and General Counsel Christopher Koster among its executive officers, ...
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.