Centene Corp (CNC, Financial), a prominent player in the healthcare plans industry, has recently witnessed a notable uptick in its stock performance. With a market capitalization of $40.94 billion, the company's stock price stands at $76.63. Over the past week, Centene's shares have seen a modest gain of 0.30%, while the past three months have been more impressive, with an 11.79% increase. This growth trajectory is underscored by the GF Value of $92.62, suggesting that the stock is currently modestly undervalued compared to its past GF Value of $89.94, which indicated a significantly undervalued status.
Centene Corp: A Leader in Government-Sponsored Healthcare Plans
Centene Corp specializes in managing government-sponsored healthcare plans, including Medicaid, Medicare, and individual exchanges. As of June 2023, the company boasts a membership of 24 million medical members, with a significant portion enrolled in Medicaid (67%), followed by individual exchanges (14%), and Medicare Advantage (6%). Centene also caters to traditional Medicare users through its Medicare Part D pharmaceutical program. 
Assessing Centene's Profitability
Centene's financial health is reflected in its Profitability Rank of 8/10, indicating a strong position within the industry. The company's operating margin stands at 2.60%, outperforming 46.67% of its peers. Additionally, Centene's return on equity (ROE) is 9.74%, surpassing 52.63% of competitors, while its return on assets (ROA) at 2.99% and return on invested capital (ROIC) at 3.99% also demonstrate competitive advantages. Notably, Centene has maintained profitability for the past 10 years, a testament to its consistent performance.
Growth Prospects of Centene Corp
The company's Growth Rank is an impressive 9/10. Centene's 3-year revenue growth rate per share is 11.80%, and its 5-year rate is even higher at 12.40%. Looking ahead, the estimated total revenue growth rate for the next 3 to 5 years is 1.22%. Earnings per share (EPS) growth rates are also robust, with a 3-year EPS without NRI growth rate of 9.40% and a 5-year rate of 16.70%. The future EPS growth rate (3Y to 5Y Est) is projected at an outstanding 24.00%. These figures highlight Centene's strong growth potential and its ability to increase shareholder value.
Notable Shareholders in Centene Corp
Several prominent investors have taken significant positions in Centene. The Vanguard Health Care Fund (Trades, Portfolio) holds 8,903,692 shares, representing a 1.67% share percentage. HOTCHKIS & WILEY owns 2,802,965 shares, accounting for 0.52% of the company's shares, while Bill Nygren (Trades, Portfolio) has invested in 2,157,320 shares, equating to a 0.4% share percentage. These holdings reflect the confidence that institutional investors have in Centene's business model and future prospects.
Competitive Landscape
In comparison to its competitors, Centene holds a substantial market cap of $40.94 billion. Molina Healthcare Inc (MOH, Financial) has a market cap of $21.58 billion, while Humana Inc (HUM, Financial) is valued at $59.18 billion, and Oscar Health Inc (OSCR, Financial) stands at $1.71 billion. Centene's market position and growth trajectory suggest that it is well-equipped to maintain a competitive edge in the dynamic healthcare plans industry.
Conclusion
In summary, Centene Corp's recent stock performance and valuation indicate a company on the rise. With a GF Value suggesting the stock is modestly undervalued, investors may find an attractive entry point. The company's strong profitability and impressive growth prospects, coupled with significant holdings by reputable investors, underscore its potential for continued success. As Centene navigates the competitive landscape of healthcare plans, its strategic focus on government-sponsored programs positions it well for future growth and profitability.
This article, generated by GuruFocus, is designed to provide general insights and is not tailored financial advice. Our commentary is rooted in historical data and analyst projections, utilizing an impartial methodology, and is not intended to serve as specific investment guidance. It does not formulate a recommendation to purchase or divest any stock and does not consider individual investment objectives or financial circumstances. Our objective is to deliver long-term, fundamental data-driven analysis. Be aware that our analysis might not incorporate the most recent, price-sensitive company announcements or qualitative information. GuruFocus holds no position in the stocks mentioned herein.
