Centene Corp
Exchange: NYSESector: HealthcareIndustry: Healthcare Plans
Centene Corporation, a Fortune 500 company, is a leading healthcare enterprise that is committed to helping people live healthier lives. The Company takes a local approach with local teams to provide fully integrated, high-quality, and cost-effective services to government-sponsored and commercial healthcare programs, focusing on under-insured individuals. Centene offers affordable and high-quality products to more than 1 in 15 individuals across the nation, including Medicaid and Medicare members (including Medicare Prescription Drug Plans) as well as individuals and families served by the Health Insurance Marketplace.
Did you know?
Earnings per share grew at a 20.1% CAGR.
Current Price
$53.34
-0.65%GoodMoat Value
$1901.11
3464.1% undervaluedProfile
Valuation (TTM)
Market Cap$26.23B
P/E-4.07
EV$13.21B
P/B1.31
Shares Out491.77M
P/Sales0.13
Revenue$198.10B
EV/EBITDA—
Centene Corp (CNC) Stock Analysis
GoodMoat Analysis
Centene Corp is a large healthcare plan provider with a massive scale advantage, but its current financials show deep unprofitability and negative returns. The stock appears deeply undervalued based on the GoodMoat target price, but this valuation is contingent on a significant turnaround in core profitability metrics.
Read full analysis
Centene Corp (CNC) operates in the Healthcare Plans industry, providing managed healthcare services primarily through government-sponsored programs like Medicaid and Medicare. From a value investing perspective, the analysis presents a complex picture. Applying the GoodMoat Investment Framework, the company likely possesses a significant moat through scale privilege and regulatory barriers inherent in its government-contracted business, which would warrant a Moat Score of at least 5 to proceed to valuation analysis. However, the Quality Indicators are overwhelmingly weak. The company is deeply unprofitable, with a negative P/E, a -3.4% profit margin, and a -33.4% Return on Equity (ROE), which is far below the sustainable high threshold of >15-20%. While revenue growth is strong at 23.2% YoY and the Free Cash Flow Yield is very high at 26.9%, these positives are overshadowed by the severe lack of current profitability and return on capital. The Decision Framework's first gate requires both a sufficient moat and strong quality ratings; Centene's quality metrics likely fail this initial screen. Despite this, the valuation appears extraordinarily favourable on the surface, with the current price of $32.73 representing a massive discount to the GoodMoat target of $1,870.18, implying a margin of safety well over 40% in the 'Deeply Undervalued' band. This extreme disconnect suggests the market is pricing in significant distress or a permanent impairment, making the stock a high-risk, high-potential-reward situation that requires deep investigation into the sustainability of its losses and the path to restoring profitability. Analysis based on data as of 2024-05-15.
Market Cap$26.23B
Current Price$53.34
P/E Ratio-4.07
Forward P/E—
PEG Ratio-0.22
EPS$-13.53
Book Value$40.57
P/B Ratio1.31
CNC Financial Charts
FCF vs CAPEX
FCFCAPEX
Forward estimates use 33.8% FCF growth (CAGR)
Cash vs Debt
Net Cash: 487M
Revenue
74.6B
FY19
111.1B
FY20
126.0B
FY21
144.5B
FY22
154.0B
FY23
163.1B
FY24
194.8B
FY25
Net Income
1.3B
FY19
1.8B
FY20
1.3B
FY21
1.2B
FY22
2.7B
FY23
3.3B
FY24
—
FY25
CNC 52-Week Range
$25.21
$62.92
50-Day MA: $39.29200-Day MA: $36.74
Did you know?
Free cash flow has been growing at 33.8% annually.
Centene Corp (CNC) Financial Summary
Centene Corp (CNC) is a Healthcare company in the Healthcare Plans industry, listed on NYSE. The stock currently trades at $53.34 with a market capitalization of $26.23B.
Key valuation metrics include a P/E ratio of -4.07, price-to-book ratio of 1.31, and EPS of $-13.53. The company reports a profit margin of -3.3% and return on equity of -32.3%.
CNC Key Financial Metrics
| Metric | Value |
|---|---|
| Market Cap | $26.23B |
| P/E Ratio | -4.07 |
| EPS | $-13.53 |
| P/B Ratio | 1.31 |
| P/S Ratio | 0.13 |
| Profit Margin | -3.3% |
| Return on Equity | -32.3% |
| Debt/Equity | 0.87 |
CNC Revenue & Earnings History
| Year | Revenue | Net Income |
|---|---|---|
| FY19 | $74.64B | $1.32B |
| FY20 | $111.11B | $1.81B |
| FY21 | $125.98B | $1.35B |
| FY22 | $144.55B | $1.20B |
| FY23 | $154.00B | $2.70B |
| FY24 | $163.07B | $3.31B |
| FY25 | $194.78B | $-6.67B |
Centene Corp (CNC) Valuation
Based on GoodMoat's DCF model, Centene Corp has a fair value estimate of $1901.11. At the current price of $53.34, the stock appears 97.2% undervalued relative to our intrinsic value estimate.
CNC Quality Indicators
Centene Corp maintains a profit margin of -3.3% and an operating margin of -3.9%. Return on equity stands at -32.3%. The current ratio is 1.10. Debt-to-equity ratio is 0.87.
About Centene Corp
Centene Corporation, a Fortune 500 company, is a leading healthcare enterprise that is committed to helping people live healthier lives. The Company takes a local approach with local teams to provide fully integrated, high-quality, and cost-effective services to government-sponsored and commercial healthcare programs, focusing on under-insured individuals. Centene offers affordable and high-quality products to more than 1 in 15 individuals across the nation, including Medicaid and Medicare members (including Medicare Prescription Drug Plans) as well as individuals and families served by the Health Insurance Marketplace.
CNC Free Cash Flow
Centene Corp generated $4.32B in trailing twelve-month free cash flow, representing an FCF yield of 16.47%. This strong FCF yield suggests the company generates substantial cash relative to its market value.
CNC Shares Outstanding
Centene Corp has 0.49 billion shares outstanding at a share price of $53.34, giving it a market capitalization of $26.23B.