Centene (CNC) AI Stock Analysis

• Market Cap: $17.55B
• Dividend Yield: N/A
• Average Volume (3M): 13.21M
• Price to Earnings (P/E): 9.1
• Beta (1Y): 0.12
• Revenue Growth: 12.96%
• EPS Growth: -23.25%
• Country: US
• Employees: 60,400
• Sector: Healthcare
• Sector Strength: 45
• Industry: Medical - Healthcare Plans
• EPS (TTM): -0.16
• Shares Outstanding: 491,133,000
• 10 Day Avg. Volume: 11,679,806
• 30 Day Avg. Volume: 13,208,569
• PEG Ratio: 0.35
• Price to Book (P/B): 1.20
• Price to Sales (P/S): 0.19
• P/FCF Ratio: -64.51
• Enterprise Value/Market Cap: 2.53
• Enterprise Value/Revenue: 0.25
• Enterprise Value/Gross Profit: 2.80
• Enterprise Value/Ebitda: 10.14
• 1Y Price Target: $33.82
• Price Target Upside: -8.15% Downside
• Rating Consensus: Hold
• Number of Analyst Covering: 13

• Rating: 70 Outperform
• Price Target: $37.00 ▲(0.49% Upside)

Centene's overall stock score is driven by strong revenue growth and an attractive valuation, offset by operational challenges and financial pressures highlighted in the earnings call. Technical indicators suggest caution due to potential overbought conditions.

Positive Factors

Revenue Growth

Strong revenue growth indicates Centene's ability to expand its market presence and enhance its service offerings, supporting long-term business sustainability.

Medicare Advantage Progress

Progress in Medicare Advantage suggests improved operational efficiency and potential profitability, enhancing Centene's competitive position in the healthcare market.

Improved Medicaid Rate Outlook

A favorable Medicaid rate adjustment strengthens Centene's revenue base and supports future profitability, reflecting effective negotiation and strategic positioning.

Negative Factors

Low Operational Margins

Low operational margins indicate challenges in cost management and efficiency, potentially limiting profitability and financial flexibility in the long term.

Marketplace Risk Adjustment Challenge

Significant financial pressure from risk adjustment changes could impact Centene's profitability and require strategic adjustments to mitigate long-term risks.

Elevated Medical Cost Trend in Medicaid

High medical costs in Medicaid could strain Centene's resources and impact margins, necessitating strategic cost management to maintain financial health.

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 generates revenue primarily through the provision of healthcare services to government programs such as Medicaid and Medicare. The company earns money by receiving monthly premiums for each member enrolled in its health plans, which are paid by state and federal government agencies. Key revenue streams include Medicaid managed care, Medicare Advantage plans, and the Health Insurance Marketplace. Additionally, Centene benefits from partnerships with various states to administer Medicaid programs and engages in value-based care arrangements that incentivize cost savings and improved health outcomes. The company's growth is also supported by strategic acquisitions that expand its service offerings and member base, enhancing its overall revenue potential.

Centene Financial Statement Overview

Summary

Centene shows strong revenue growth and a stable balance sheet with moderate leverage. However, low operational margins and challenges in cash conversion limit overall profitability, despite improvements in free cash flow.

Income Statement

Centene's TTM (Trailing-Twelve-Months) data shows a robust Gross Profit Margin of 12.5% and a Net Profit Margin of 1.15%. The company demonstrated a strong Revenue Growth Rate of 9.29% from the previous year, indicating healthy expansion. However, the EBIT Margin of 1.07% and EBITDA Margin of 2.25% are relatively low, suggesting limited operational efficiency.

Balance Sheet

Centene's financial leverage is moderate with a Debt-to-Equity Ratio of 0.64. The company has a Return on Equity (ROE) of 7.5%, which is satisfactory but shows room for improvement. The Equity Ratio stands at 31.73%, reflecting a stable capital structure with a reasonable proportion of equity financing.

Cash Flow

The company's Free Cash Flow Growth Rate is positive, recovering from a negative position last year to $1.08 billion. The Operating Cash Flow to Net Income Ratio of 0.84 indicates adequate cash generation relative to net profits. However, the Free Cash Flow to Net Income Ratio of 0.53 suggests potential challenges in converting earnings into free cash flow.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	178.19B	163.07B	154.00B	144.55B	125.98B	111.11B
Gross Profit	15.90B	16.83B	17.32B	16.66B	14.20B	15.22B
EBITDA	4.39B	6.20B	5.62B	4.06B	3.81B	4.76B
Net Income	2.05B	3.31B	2.70B	1.20B	1.35B	1.81B
Balance Sheet
Total Assets	86.39B	82.44B	84.64B	76.87B	78.38B	68.72B
Cash, Cash Equivalents and Short-Term Investments	17.28B	16.68B	19.65B	14.39B	14.66B	12.38B
Total Debt	17.58B	19.43B	18.88B	21.33B	22.66B	18.32B
Total Liabilities	58.89B	55.94B	58.69B	52.63B	51.35B	42.76B
Stockholders Equity	27.41B	26.41B	25.84B	24.06B	26.80B	25.77B
Cash Flow
Free Cash Flow	1.08B	-490.00M	7.25B	5.26B	3.29B	4.63B
Operating Cash Flow	1.73B	154.00M	8.05B	6.26B	4.21B	5.50B
Investing Cash Flow	-2.17B	-1.05B	-1.28B	-2.92B	-3.30B	-6.96B
Financing Cash Flow	-2.68B	-2.41B	-1.57B	-4.20B	1.36B	260.00M

Centene Technical Analysis

• Technical Analysis Sentiment: Neutral
• Last Price: 36.82
• 50DMA: Positive
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Negative
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For CNC, the sentiment is Neutral. The current price of 36.82 is above the 20-day moving average (MA) of 33.03, above the 50-day MA of 29.73, and below the 200-day MA of 49.93, indicating a neutral trend. The MACD of 1.55 indicates Negative momentum. The RSI at 73.36 is Negative, neither overbought nor oversold. The STOCH value of 94.51 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for CNC.

Centene Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
CVS	77 Outperform	$98.23B	21.45	5.86%	3.43%	6.27%	-36.28%
MOH	73 Outperform	$10.45B	9.58	24.55%	―	16.12%	10.99%
CI	72 Outperform	$77.85B	15.93	12.48%	2.00%	20.93%	43.98%
ELV	71 Outperform	$74.91B	14.16	12.26%	1.99%	10.21%	-17.79%
CNC	70 Outperform	$17.55B	9.10	7.50%	―	12.96%	-23.25%
HUM	70 Outperform	$29.68B	18.94	8.64%	1.38%	9.88%	-7.25%
Sector *	51 Neutral	$7.86B	-0.30	-43.30%	2.27%	22.53%	-2.21%