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Centene (CNC) Divests Apixio to Boost Its Core Business
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Centene Corporation (CNC - Free Report) recently closed the divestiture of the well-established artificial intelligence platform, Apixio, which CNC had acquired back in December 2020 in a bid to enhance its data analytics suite.
Plans of selling off the healthcare analytics company to the investment firm, New Mountain Capital, were disclosed by Centene in May 2023. The deal was completed within slightly more than a month of the announcement. The divestiture is likely to be neutral to CNC's adjusted earnings per share of 2023.
The latest move bears testament to Centene’s intensified focus on growing its Managed Care business, which positions the health insurer well for long-term growth and profitability. The business witnessed year-over-year membership growth of 8.5% as of Mar 31, 2023. Efforts to boost the unit bode well since it remains the most significant contributor to the top line of the health insurer.
Also, pursuant to the Value Creation Plan, Centene makes sure that it identifies strategic alternatives for shedding non-core assets and subsequently optimizes its portfolio. CNC looks to divest its businesses to companies that would support its growth prospects. The same has been the case with Apixio as the divestiture is likely to boost its footprint as an artificial intelligence platform that facilitates value-based care programs across the United States.
Sell-offs are often a means for Centene to sustain its share buyback record, thereby reinforcing investors’ confidence in the stock. The same is also pursued to bring down the mounting debt burden and associated interest expenses. As of Mar 31, 2023, long-term debt increased 1.6% from the 2022-end level. Interest expenses escalated 12.5% year over year in the first quarter of 2023. As debts are repaid using proceeds from sell-offs, cash reserves of the health insurer can be directed to pursue growth-related initiatives.
Centene has been quite active on the divestiture front for quite some time. Last year, it sold PANTHERx, Magellan Rx as well as its Spanish and Central European businesses. In January 2023, the divestiture of Magellan Specialty Health was completed to Evolent Health.
Shares of Centene have gained 9.7% in the past three months, compared with the industry’s 7.1% growth. CNC currently carries a Zacks Rank #3 (Hold).
The bottom line of Amphastar Pharmaceuticals surpassed estimates in three of the last four quarters and matched the mark once, the average surprise being 33.83%. The Zacks Consensus Estimate for AMPH’s 2023 earnings indicates 20.8% growth, while the same for revenues suggests a 17.4% rise from their corresponding prior-year actuals. The consensus mark for AMPH’s 2023 earnings has moved 17.2% north in the past 60 days.
Boston Scientific’s earnings beat estimates in two of the trailing four quarters and missed the mark twice, the average surprise being 1.88%. The Zacks Consensus Estimate for BSX’s 2023 earnings indicates 14% growth from the prior-year actual. The same for revenues implies 9.5% growth from the year-ago reported figure. The consensus mark for BSX’s 2023 earnings has moved 2.6% north in the past 60 days.
The bottom line of IRadimed outpaced estimates in each of the trailing four quarters, the average surprise being 11.92%. The Zacks Consensus Estimate for IRMD’s 2023 earnings indicates 19.1% growth, while the same for revenues suggests a 18.8% rise from their corresponding prior-year actuals. The consensus mark for IRMD’s 2023 earnings has moved 0.8% north in the past 60 days.
Shares of Amphastar Pharmaceuticals, Boston Scientific and IRadimed have gained 28.4%, 10.4% and 32.2%, respectively, in the past three months.
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Centene (CNC) Divests Apixio to Boost Its Core Business
Centene Corporation (CNC - Free Report) recently closed the divestiture of the well-established artificial intelligence platform, Apixio, which CNC had acquired back in December 2020 in a bid to enhance its data analytics suite.
Plans of selling off the healthcare analytics company to the investment firm, New Mountain Capital, were disclosed by Centene in May 2023. The deal was completed within slightly more than a month of the announcement. The divestiture is likely to be neutral to CNC's adjusted earnings per share of 2023.
The latest move bears testament to Centene’s intensified focus on growing its Managed Care business, which positions the health insurer well for long-term growth and profitability. The business witnessed year-over-year membership growth of 8.5% as of Mar 31, 2023. Efforts to boost the unit bode well since it remains the most significant contributor to the top line of the health insurer.
Also, pursuant to the Value Creation Plan, Centene makes sure that it identifies strategic alternatives for shedding non-core assets and subsequently optimizes its portfolio. CNC looks to divest its businesses to companies that would support its growth prospects. The same has been the case with Apixio as the divestiture is likely to boost its footprint as an artificial intelligence platform that facilitates value-based care programs across the United States.
Sell-offs are often a means for Centene to sustain its share buyback record, thereby reinforcing investors’ confidence in the stock. The same is also pursued to bring down the mounting debt burden and associated interest expenses. As of Mar 31, 2023, long-term debt increased 1.6% from the 2022-end level. Interest expenses escalated 12.5% year over year in the first quarter of 2023. As debts are repaid using proceeds from sell-offs, cash reserves of the health insurer can be directed to pursue growth-related initiatives.
Centene has been quite active on the divestiture front for quite some time. Last year, it sold PANTHERx, Magellan Rx as well as its Spanish and Central European businesses. In January 2023, the divestiture of Magellan Specialty Health was completed to Evolent Health.
Shares of Centene have gained 9.7% in the past three months, compared with the industry’s 7.1% growth. CNC currently carries a Zacks Rank #3 (Hold).
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Stocks to Consider
Some better-ranked stocks in the Medical space are Amphastar Pharmaceuticals, Inc. (AMPH - Free Report) , Boston Scientific Corporation (BSX - Free Report) and IRadimed Corporation (IRMD - Free Report) . While Amphastar Pharmaceuticals sports a Zacks Rank #1 (Strong Buy), Boston Scientific and IRadimed carry a Zacks Rank #2 (Buy) each. You can see the complete list of today’s Zacks #1 Rank stocks here.
The bottom line of Amphastar Pharmaceuticals surpassed estimates in three of the last four quarters and matched the mark once, the average surprise being 33.83%. The Zacks Consensus Estimate for AMPH’s 2023 earnings indicates 20.8% growth, while the same for revenues suggests a 17.4% rise from their corresponding prior-year actuals. The consensus mark for AMPH’s 2023 earnings has moved 17.2% north in the past 60 days.
Boston Scientific’s earnings beat estimates in two of the trailing four quarters and missed the mark twice, the average surprise being 1.88%. The Zacks Consensus Estimate for BSX’s 2023 earnings indicates 14% growth from the prior-year actual. The same for revenues implies 9.5% growth from the year-ago reported figure. The consensus mark for BSX’s 2023 earnings has moved 2.6% north in the past 60 days.
The bottom line of IRadimed outpaced estimates in each of the trailing four quarters, the average surprise being 11.92%. The Zacks Consensus Estimate for IRMD’s 2023 earnings indicates 19.1% growth, while the same for revenues suggests a 18.8% rise from their corresponding prior-year actuals. The consensus mark for IRMD’s 2023 earnings has moved 0.8% north in the past 60 days.
Shares of Amphastar Pharmaceuticals, Boston Scientific and IRadimed have gained 28.4%, 10.4% and 32.2%, respectively, in the past three months.