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What's in the Cards for Centene (CNC) this Earnings Season?
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Centene Corporation (CNC - Free Report) will release first-quarter 2017 results on Apr 25, before the market opens. Last quarter, the company posted a positive earnings surprise of 6.25%. Let’s see how things are shaping up for this announcement.
Factors to be Considered this Quarter
Centene’s acquisition of Health Net in the last reported quarter is expected to have boosted its top line this time around.
The company’s new Medicaid contracts are likely have boosted the membership, in turn, bolstering revenue growth in the to-be-reported quarter.
The company also started Medicare Advantage plans in four new states in Jan 2017, which is likely to have contributed to revenue growth.
The company also remains committed toward enhancing shareholders’ value. To this end, it undertook share repurchases, which should impact the bottom line positively by reducing the outstanding share count.
However, the company’s merger with Health Net resulted in incurring substantial costs, which are likely to put pressure on the bottom line.
Health Net’s high Selling General and Administrative expenses are also expected to have increased its overallexpenses, limiting bottom-line growth.
Increasing costs related to extinguishment of debt, reserves for settlements, legal judgments and lawsuits, impairments of long-lived assets are anticipated to have affected earnings.
Our proven model does not conclusively show that Centene is likely to beat on earnings this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. That is not the case here as you will see below.
Zacks ESP: Centene has an Earnings ESP of -1.89%. This is because the Most Accurate estimate is pegged at $1.04, while the Zacks Consensus Estimate stands at $1.06. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: Centene carries a Zacks Rank #3. Though the company has a favorable Zacks Rank, its negative Earnings ESP complicates surprise prediction.
We caution against Sell-rated stocks (Zacks Rank #4 or 5) going into the earnings announcement, especially when the company is seeing negative estimate revisions.
Stocks to Consider
Here are some other companies from the medical sector that you may want to consider as these have the right combination of elements to post an earnings beat this quarter:
Anthem, Inc. has an Earnings ESP of +7.79% and a Zacks Rank #2. The company is set to report first-quarter earnings on Apr 26.
Humana, Inc. (HUM - Free Report) has an Earnings ESP of +2.06% and a Zacks Rank #2 The company is set to report first-quarter earnings on May 3.
Zacks' 2017 IPO Watch List
Before looking into the stocks mentioned above, you may want to get a head start on potential tech IPOs that are popping up on Zacks' radar. Imagine being in the first wave of investors to jump on a company with almost unlimited growth potential? This Special Report gives you the current scoop on 5 that may go public at any time.
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What's in the Cards for Centene (CNC) this Earnings Season?
Centene Corporation (CNC - Free Report) will release first-quarter 2017 results on Apr 25, before the market opens. Last quarter, the company posted a positive earnings surprise of 6.25%. Let’s see how things are shaping up for this announcement.
Factors to be Considered this Quarter
Centene’s acquisition of Health Net in the last reported quarter is expected to have boosted its top line this time around.
The company’s new Medicaid contracts are likely have boosted the membership, in turn, bolstering revenue growth in the to-be-reported quarter.
The company also started Medicare Advantage plans in four new states in Jan 2017, which is likely to have contributed to revenue growth.
The company also remains committed toward enhancing shareholders’ value. To this end, it undertook share repurchases, which should impact the bottom line positively by reducing the outstanding share count.
However, the company’s merger with Health Net resulted in incurring substantial costs, which are likely to put pressure on the bottom line.
Health Net’s high Selling General and Administrative expenses are also expected to have increased its overallexpenses, limiting bottom-line growth.
Increasing costs related to extinguishment of debt, reserves for settlements, legal judgments and lawsuits, impairments of long-lived assets are anticipated to have affected earnings.
Centene Corporation Price and EPS Surprise
Centene Corporation Price and EPS Surprise | Centene Corporation Quote
Earnings Whispers
Our proven model does not conclusively show that Centene is likely to beat on earnings this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. That is not the case here as you will see below.
Zacks ESP: Centene has an Earnings ESP of -1.89%. This is because the Most Accurate estimate is pegged at $1.04, while the Zacks Consensus Estimate stands at $1.06. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: Centene carries a Zacks Rank #3. Though the company has a favorable Zacks Rank, its negative Earnings ESP complicates surprise prediction.
We caution against Sell-rated stocks (Zacks Rank #4 or 5) going into the earnings announcement, especially when the company is seeing negative estimate revisions.
Stocks to Consider
Here are some other companies from the medical sector that you may want to consider as these have the right combination of elements to post an earnings beat this quarter:
Amgen, Inc. (AMGN - Free Report) , which is set to report first-quarter earnings on Apr 26, has an Earnings ESP of +1.99% and a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.
Anthem, Inc. has an Earnings ESP of +7.79% and a Zacks Rank #2. The company is set to report first-quarter earnings on Apr 26.
Humana, Inc. (HUM - Free Report) has an Earnings ESP of +2.06% and a Zacks Rank #2 The company is set to report first-quarter earnings on May 3.
Zacks' 2017 IPO Watch List
Before looking into the stocks mentioned above, you may want to get a head start on potential tech IPOs that are popping up on Zacks' radar. Imagine being in the first wave of investors to jump on a company with almost unlimited growth potential? This Special Report gives you the current scoop on 5 that may go public at any time.
One has driven from 0 to a $68 billion valuation in 8 years. Four others are a little less obvious but already show jaw-dropping growth. Download this IPO Watch List today for free >>