Centene Corp. (CNC)
Valuation Overview•Is Centene Corp. Overvalued or Undervalued?
Trading at a discount across both intrinsic cash flow and relative peer multiples, indicating a strong margin of safety.
Fragile underlying quality score of 29/100; weak margins or elevated debt leverage warrant caution.
Wall Street forecasts a balanced outlook with consensus price targets near the current price.
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Verdict: Highly distressed profile flashing severe fundamental warning signs.
Wall Street is broadly bullish, projecting solid upside alongside robust expected earnings growth. However, capital return yields remain modest, driven predominantly by aggressive share repurchases.
Returns capital exclusively via buybacks — no active dividend
CNC struggles with subpar profitability and pressured margins. This is paired with a moderately leveraged but stable balance sheet.
The company demonstrates solid revenue growth (10.5% 3Y CAGR) paired with stable bottom-line earnings. However, profitability remains a major concern with severely compressed operating margins (-2.8%).
| Financial Metric | Trend (12Q) | Latest Qtr | 1Y Growth | 3Y CAGR | 5Y CAGR | 10Y CAGR |
|---|---|---|---|---|---|---|
| Revenue | $44.4B | +19.4% | +10.5% | +11.9% | +23.9% | |
| EBITDA | $1.5B | — | — | — | — | |
| Net Income | $1.1B | -301.9% | — | — | — | |
| EPS (Diluted) | $2.19 | -315.8% | — | — | — | |
| Free Cash Flow | $4.2B | +981.8% | -6.3% | -1.4% | — |
| Metric | TTM | 3Y Avg | 5Y Avg | 10Y Avg |
|---|---|---|---|---|
| Gross Margin | 16.1% | 11.3% | 11.3% | 12.2% |
| Operating Margin | -2.8% | -0.0% | 0.5% | 1.5% |
| Net Margin | -2.6% | 0.1% | 0.5% | 1.0% |
| FCF Margin | 4.6% | 2.2% | 2.6% | 2.5% |
| Quarter | EPS Est. | EPS Act. | Surprise | EPS | Rev |
|---|---|---|---|---|---|
| Q3'26Latest | $1.09 | $2.51 | +130.3% | ||
| Q2'26 | $2.23 | $3.37 | +51.1% | ||
| Q1'26 | $-1.22 | $-1.19 | +2.5% | ||
| Q4'25 | $-0.14 | $0.50 | +445.4% | ||
| Q3'25 | $0.11 | $-0.16 | -243.4% | ||
| Q2'25 | $2.52 | $2.90 | +15.1% | ||
| Q1'25 | $0.44 | $0.80 | +81.8% | ||
| Q4'24 | $1.33 | $1.62 | +21.8% |
Total return is +93.5% (1Y), outperforming the benchmark by +77.5%
| Period | Total Return | vs S&P 500 (Alpha) | Dividend Contribution |
|---|---|---|---|
| YTD | +51.5% | +38.3% | — |
| 1Y | +93.5% | +77.5% | — |
| 3YCAGR | -2.7% | -23.8% | — |
| 5YCAGR | +0.1% | -11.5% | — |
| 10YCAGR | +6.3% | -6.9% | — |
The S&P 500 is at 31.6x trailing P/E — Expensive relative to historical averages.
Quick answers to common questions about Centene Corp. (CNC) valuation, health, and returns.
Centene Corp. is estimated to be undervalued under our discounted cash flow framework. relative multiples indicate the stock is Cheap versus peers compared to industry peers. undervalued (implying +25.6% upside to DCF intrinsic value of $81.81)
Centene Corp. has multiple valuation anchors: DCF Intrinsic Value: $81.81 | Peer Relative Fair Value: $90.91 | Wall Street Analyst Target: $68.29 (implying +7.9% upside). A convergence of these signals offers higher conviction.
Centene Corp. displays weak financial health with a composite quality score of 29/100, supported by a Piotroski F-Score of 6/9, Return on Invested Capital (ROIC) of -21.6%.
Centene Corp. returns capital via buybacks instead of dividends, carrying a 1.5% buyback yield and reducing outstanding shares by -6.2% in the last 12 months.
Centene Corp.'s current growth trajectory is Accelerating. The company achieved +19.4% 1Y revenue growth and -315.8% 1Y EPS growth, compared to its 3Y revenue CAGR of +10.5%.
Wall Street consensus is Buy based on 44 analysts, beating EPS expectations in 92% of recent quarters with a 4-quarter streak. The consensus price target represents a +7.9% change from current levels.
Investment risks for Centene Corp. include: -32.7% 1-year max drawdown. Volatility risk is characterized by a beta of 0.38x.
No. These computations are purely quantitative model outputs for informational purposes. They do not account for qualitative management shifts or macro events. Always consult a licensed RIA before buying or selling shares.
Disclaimer: This page is for informational purposes only and does not constitute financial advice. All valuation models, scores, and target estimates are automated computations under stated assumptions and should not be relied upon as the sole basis for any investment decision.