10Y annualized return is
positive but below market average
at 4.7% per year
CNC has met or exceeded earnings expectations in
most
recent quarters (9/10)
Low Price-to-Earnings Ratio
Attractive Price-to-Sales Ratio
Decent Return on Equity
Manageable Debt Levels
Strong Interest Coverage
Strong Financial Performance
Successful Operational Improvements
Diverse Revenue Streams
Growth in Medicare and Marketplace Segments
Innovative Initiatives and Strategic Focus
High EV/EBITDA Ratio
Negative Price-to-Free Cash Flow Ratio
Low Net Profit Margin
Weak Operating Profit Margin
Low Liquidity Ratios
Negative Free Cash Flow
Challenges in Cash Flow
Potential Risks in Exchange Membership
Overall, Centene Corporation shows strong business quality with solid financial metrics, operational improvements, and diverse revenue streams, while facing challenges in cash flow. Future prospects are promising, driven by growth in Medicare and innovative initiatives, although risks in exchange membership could pose challenges ahead.
Analysis Date: February 4, 2025
Last Updated: March 11, 2025
Past performance does not guarantee future results. The data presented is indicative and may not be updated in real-time.
Centene Corporation is a healthcare company that helps people who may not have enough insurance or any insurance at all. They provide health plans that cover a wide range of services, like doctor visits, hospital care, emergency care, and even mental health support. Centene works with government programs to make sure people get the medical care they need, including support for families and vulnerable groups. They also offer services to businesses and other organizations to help manage healthcare for their employees.
Streams of revenue
Geographic Distribution
Estimations for reference only
Core Products
Business Type
Business to Government
Competitive Advantages
Key Business Risks
Latest News
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Trailing Twelve Months (TTM) values provide a view of the company's performance over the last year.
Benjamin Graham's value investing approach focuses on finding stocks with a significant margin of safety between their intrinsic value and market price.
Intrinsic Value
Estimated fair value based on Graham's formula
$243.86
Current Market Price: $58.88
IV/P Ratio: 4.14x (>1.0 indicates undervalued)
Margin of Safety
Gap between intrinsic value and market price
76.0%
Graham recommended a minimum of 20-30% margin of safety
Higher values indicate a greater potential discount to fair value
Graham Criteria Checklist
Benjamin Graham's value investing checklist for CNC
Positive earnings (5+ years)
Dividend history (5+ years)
P/E ratio ≤ 20 (9.78)
P/B ratio ≤ 1.5 (1.22)
Current ratio ≥ 2.0 (1.11x)
Long-term debt < Net current assets (5.13x)
Margin of safety (76.0%)
CNC does not meet all Graham criteria
Trailing Twelve Months (TTM) values provide a view of the company's performance over the last year.
Profitability metrics measure a company's ability to generate earnings relative to its revenue, operating costs, and other relevant metrics. Higher values generally indicate better performance.
Return on Equity (ROE)
Measures how efficiently a company uses its equity to generate profits
12.67%
Higher values indicate better returns for shareholders
TTM (as of 2025-04-30)
Gross Profit Margin
Percentage of revenue retained after accounting for cost of goods sold
13.13%
Higher values indicate better efficiency in production
TTM (as of 2025-04-30)
Net Profit Margin
Percentage of revenue retained after accounting for all expenses
2.03%
Higher values indicate better overall profitability
TTM (as of 2025-04-30)
CNC's return on equity of 12.24% indicates that the company is effectively using its equity to generate profits.
The net profit margin of 2.03% suggests that CNC is only retaining a small portion of its revenue as profit, which may limit its ability to reinvest and grow.
The operating profit margin of 1.95% is low, indicating challenges in managing operational costs effectively.
Financial health metrics assess a company's ability to meet its financial obligations and its overall financial stability.
Debt to Equity Ratio
Total debt divided by total equity
0.74x
Lower values indicate less financial leverage and risk
Less than 1.0 is conservative, 1.0-2.0 is moderate, >2.0 indicates high risk
Q4 2024
Current Ratio
Current assets divided by current liabilities
1.11x
Higher values indicate better short-term liquidity
Less than 1.0 is concerning, 1.0-2.0 is adequate, greater than 2.0 is good
Q4 2024
With a debt-to-equity ratio of 0.74, CNC maintains a reasonable level of debt compared to its equity, indicating a balanced capital structure.
An interest coverage ratio of 4.52 shows that CNC can comfortably meet its interest obligations, indicating financial stability.
The current ratio of 1.11 and quick ratio of 1.11 are relatively low, suggesting that CNC may have just enough liquidity to cover short-term liabilities but not much more.
The negative free cash flow per share of -0.98 indicates that CNC is currently spending more cash than it generates, which could be a risk to its financial health.
Meeting Expectations
Higher values indicate better execution and credibility
Recent Results
EPS
Revenue
Centene reported a fourth quarter adjusted diluted EPS of $0.80 and a full year adjusted diluted EPS of $7.17, demonstrating solid earnings power. The company exceeded previous guidance and has shown durability in earnings.
The company has made significant operational improvements, especially in Medicaid where membership is stabilizing post-redetermination era. Strong dialogues with state partners have helped secure favorable rate adjustments, enhancing margins.
Centene operates across multiple segments (Medicaid, Medicare, and Marketplace), providing resilience and growth opportunities. The company is also focusing on innovative care programs that address specific member needs.
Operating cash flow was weak in 2024 due to timing issues with pharmacy rebates and risk adjustments, which could impact liquidity and operational flexibility in the near term.
The company anticipates strong growth in its Medicare segment, with enrollment expected to reach nearly 900,000 and a focus on improving Medicare Advantage margins by 2027.
Centene is leveraging AI and data analytics to improve healthcare delivery and operational efficiency. The focus on Individual Coverage Health Reimbursement Arrangements (ICHRA) reflects a forward-thinking approach to market trends.
Future membership in the ACA exchanges may be challenged by program integrity changes and potential loss of enhanced APTCs, which could lead to a 20-30% membership hit if not mitigated effectively.
Insider trading data shows purchase and sale activities by company executives and board members.
Insider trading patterns can provide insights into how company executives and board members view the stock's future prospects.
Insiders are buying significantly more than selling (ratio: 3.89x)
Total Bought
Total value of insider purchases in recent quarters
$694686
Higher values indicate stronger insider confidence
Total Sold
Total value of insider sales in recent quarters
$178769
Lower values relative to buying indicate possible undervaluation
Active Insiders
Number of insiders trading in recent quarters
1
Limited insider activity
Recent Trend
Change in insider trading pattern
CNC: No trend data available