Centene (CNC) AI Stock Analysis

• Market Cap: $30.74B
• Dividend Yield: N/A
• Average Volume (3M): 5.52M
• Price to Earnings (P/E): 9.2
• Beta (1Y): 0.04
• Revenue Growth: 8.85%
• EPS Growth: 33.30%
• Country: US
• Employees: 60,400
• Sector: Healthcare
• Sector Strength: 41
• Industry: Medical - Healthcare Plans
• EPS (TTM): 2.90
• Shares Outstanding: 497,603,000
• 10 Day Avg. Volume: 5,671,420
• 30 Day Avg. Volume: 5,522,804
• PEG Ratio: 0.02
• Price to Book (P/B): 1.12
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 20.94
• Enterprise Value/Market Cap: 1.13
• Enterprise Value/Revenue: 0.05
• Enterprise Value/Gross Profit: 1.33
• Enterprise Value/Ebitda: 1.45
• 1Y Price Target: $75.60
• Price Target Upside: 22.37% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 12

Centene shows solid financial performance with strong revenue growth and operational efficiency. The technical analysis and valuation reflect a stable and attractively priced stock. The recent earnings call highlights both growth potential and challenges, while the corporate event adds a positive strategic dimension. Overall, these factors contribute to a favorable outlook for Centene.

Positive Factors

Earnings Performance

CNC reported adjusted EPS of $2.90, above WFS and consensus expectations.

Medicaid Rate Updates

Medicaid rate updates are on track for more than 4% increases, which are expected to help margins return to pre-pandemic levels over time.

Revenue Growth

Centene has raised its guidance for premium and service revenue by $10 billion, indicating increased business activity.

Negative Factors

Enrollment Risk

There is a risk from the March proposal which could reduce enrollment by 3-9%.

Medical Loss Ratio

The stock sold off on the worse MLR outlook for the year.

Medicare PDP Concerns

The price target for Centene has been lowered from $80 to $73 due to concerns over Medicare PDP utilization and other factors.

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 premiums it receives from providing health insurance plans to its members. These premiums are paid by government programs like Medicaid and Medicare, as well as individuals purchasing plans on the Health Insurance Marketplace. The company also earns money through contracts for managing healthcare services, which involve coordinating care, managing costs, and ensuring quality for its members. Additionally, Centene benefits from partnerships with various healthcare providers and networks that help streamline services and reduce costs. The company's diversified portfolio of health solutions and its strategic acquisitions have been significant factors in its financial growth and 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
	EBIT
3.60B	3.17B	2.93B	3.64B	3.26B	3.08B
	EBITDA
6.16B	4.96B	5.62B	4.06B	3.95B	4.76B
	Net Income Common Stockholders
3.45B	3.31B	2.70B	1.20B	1.35B	1.81B
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
17.29B	16.68B	19.65B	14.39B	14.66B	12.38B
	Total Assets
87.04B	82.44B	84.64B	76.87B	78.38B	68.72B
	Total Debt
18.32B	19.43B	18.88B	18.02B	18.84B	16.78B
	Net Debt
3.50B	5.37B	1.68B	5.95B	5.72B	5.98B
	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: Positive
• Last Price: 61.78
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For CNC, the sentiment is Positive. The current price of 61.78 is above the 20-day moving average (MA) of 60.43, above the 50-day MA of 60.51, and below the 200-day MA of 64.52, indicating a neutral trend. The MACD of 0.07 indicates Negative momentum. The RSI at 53.46 is Neutral, neither overbought nor oversold. The STOCH value of 40.74 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for CNC.

Centene Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
MOH	78 Outperform	$17.63B	15.72	26.72%	―	16.71%	12.23%
CNC	77 Outperform	$30.74B	9.20	12.59%	―	8.85%	33.30%
CI	74 Outperform	$85.74B	17.78	12.37%	1.78%	25.21%	-29.37%
ELV	71 Outperform	$91.12B	15.74	14.24%	1.64%	6.63%	-3.26%
CVS	67 Neutral	$79.10B	14.94	7.00%	4.25%	4.84%	-26.54%
HUM	67 Neutral	$28.72B	16.83	10.09%	1.49%	10.09%	-12.18%
Sector *	52 Neutral	$5.15B	3.02	-44.64%	2.83%	16.44%	-0.47%

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.

Spark’s Take on CNC Stock

According to Spark, TipRanks’ AI Analyst, CNC is a Outperform.

Centene’s overall stock score reflects strong financial performance, particularly in revenue growth and operational efficiency. The stock’s current undervaluation presents an opportunity, although technical indicators suggest caution due to bearish trends. The earnings call and corporate events highlight both strengths in revenue guidance and strategic direction while acknowledging ongoing cost pressures.

To see Spark’s full report on CNC stock, click here.

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.

Spark’s Take on CNC Stock

According to Spark, TipRanks’ AI Analyst, CNC is a Outperform.

Centene’s strong financial performance and valuation metrics underpin its potential as an investment, with significant revenue growth and effective cost management strategies. However, technical indicators show a bearish trend, and challenges such as high medical expenses and specialty drug costs present ongoing risks. The recent board appointment is a positive strategic move, adding expertise to navigate complex industry challenges.

To see Spark’s full report on CNC stock, click here.

Centene to Reaffirm 2025 Earnings at Barclays Conference

Centene Corporation announced its participation in the Barclays 27th Annual Global Healthcare Conference on March 12, 2025, where it plans to reaffirm its 2025 adjusted diluted earnings per share guidance of over $7.25. The company emphasizes the use of non-GAAP financial measures to provide investors with a clearer understanding of its core business performance, although it acknowledges the challenges in reconciling these figures with GAAP measures.

Centene Enters New Credit Agreement with Lenders

On March 5, 2025, Centene Corporation entered into a new Credit Agreement with Wells Fargo and other lenders, replacing its previous credit agreement from 2021. The new agreement includes a $4 billion revolving credit facility and a $2 billion term loan facility, both maturing in 2030. This move aims to refinance existing debt and support corporate operations, with loans available in multiple currencies and subject to interest rates based on Centene’s credit ratings. The agreement imposes financial covenants and allows for voluntary prepayments, reflecting Centene’s strategic financial management.

Centene Reaffirms 2025 EPS Guidance to Investors

On March 4, 2025, Centene Corporation’s senior management will meet with investors to reaffirm their 2025 full-year adjusted diluted EPS guidance of over $7.25, as previously stated in February. The company emphasizes the use of non-GAAP financial measures to provide a clearer view of its core performance, although these measures may differ from those used by other companies. This approach aims to help investors better understand Centene’s ongoing operations and performance, despite the challenges in reconciling these figures with GAAP standards.

Centene Expands Board with Kenneth Tanji Appointment

Centene Corporation announced the appointment of Kenneth Y. Tanji to its Board of Directors, effective February 20, 2025, expanding the board to 12 members. Tanji, who brings over three decades of financial expertise, previously served as Executive Vice President and CFO of Prudential Financial, Inc. His appointment is expected to enhance Centene’s strategic direction in healthcare, leveraging his experience in capital optimization and advanced analytics to address complex industry challenges.