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Centene Corp CNC

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Stock XNYS Rating as of
$74.88 +1.20 (1.63%)
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Company Report

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Centene Earnings: 2023 Outlook Raised as Individual Expansion Offsets Medicaid Redeterminations

Julie Utterback

Narrow-moat Centene turned in strong third-quarter results even as Medicaid redeterminations continued. With the expansion of its individual exchange business more than offsetting Medicaid declines, management moderately increased its 2023 outlook and maintained its 2024 guidance. At first glance, these goals appear to be in line with our expectations, and we are maintaining our $87 fair value estimate. Centene shares remain moderately undervalued, in our view.

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Price vs Fair Value

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CNC is trading at a 14% discount.
Price
$74.88
Fair Value
$56.00
Uncertainty
Medium
1-Star Price
$269.82
5-Star Price
$51.20
Economic Moat
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Capital Allocation
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Bulls Say, Bears Say

Bulls

Centene represents a countercyclical investment opportunity in managed care, as it can benefit from economic downturns through increasing enrollment in its Medicaid and individual exchange products.

Bears

Since the pandemic began, Medicaid rolls swelled, but as eligibility redeterminations resume or the employer-sponsored market returns to growth, this Centene stronghold may decline in the near future.

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Trading Information

Previous Close Price
$73.68
Day Range
$73.49–74.97
52-Week Range
$60.83–87.79
Bid/Ask
$72.12 / $74.99
Market Cap
$40.00 Bil
Volume/Avg
3.9 Mil / 3.3 Mil

Key Statistics

Price/Earnings (Normalized)
10.59
Price/Sales
0.28
Dividend Yield
—
Dividend Yield (Forward)
—
Total Yield
7.33%

Company Profile

Centene is a managed-care organization focused on government-sponsored healthcare plans, including Medicaid, Medicare, and the individual exchanges. Centene served 24 million medical members as of June 2023, mostly in Medicaid (67% of membership), the individual exchanges (14%), and Medicare Advantage (6%) plans. The company also serves traditional Medicare users with its Medicare Part D pharmaceutical program.
Sector
Healthcare
Industry
Healthcare Plans
Stock Style Box
Mid Value
Total Number of Employees
74,300
Website
https://www.centene.com

Competitors

Valuation

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Metric
CNC
UNH
CI
Price/Earnings (Normalized)
 10.5922.5211.56
Price/Book Value
 1.585.991.73
Price/Sales
 0.281.430.42
Price/Cash Flow
 8.4819.459.92
Price/Earnings
CNC
UNH
CI

Financial Strength

Metric
CNC
UNH
CI
Quick Ratio
 0.980.72—
Current Ratio
 1.120.80—
Interest Coverage
 6.0510.215.71
Quick Ratio
CNC
UNH
CI

Profitability

Metric
CNC
UNH
CI
Return on Assets (Normalized)
 4.77%8.57%4.73%
Return on Equity (Normalized)
 15.51%28.55%15.44%
Return on Invested Capital (Normalized)
 9.46%16.83%9.68%
Return on Assets
CNC
UNH
CI

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