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Will Growing Customer Base Aid Centene (CNC) in Q2 Earnings?
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Centene Corporation (CNC - Free Report) is scheduled to release second-quarter 2023 results on Jul 28, before the opening bell.
Q2 Estimates
The Zacks Consensus Estimate for Centene’ second-quarter earnings per share is pegged at $2.05, which implies a rise of 15.8% from the prior-year quarter’s reported figure.
The consensus mark for revenues stands at $36 billion, suggesting 0.3% growth from the year-ago quarter’s reported number.
Earnings Surprise History
Centene’s bottom line beat estimates in two of the trailing four quarters and missed the mark twice, the average surprise being 0.59%. This is depicted in the chart below:
Our proven model predicts an earnings beat for Centene this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat, which is the case here.
Earnings ESP: Centene has an Earnings ESP of +0.94% because the Most Accurate Estimate of $2.07 is pegged higher than the Zacks Consensus Estimate of $2.05. You can uncover the best stocks before they’re reported with our Earnings ESP Filter.
Zacks Rank: CNC carries a Zacks Rank of 3.
Factors to Note
In the second quarter, revenues of Centene are likely to have benefited on the back of growing premiums resulting from an increased customer base across its Medicaid and Marketplace businesses. Additionally, several contract wins from federal or state authorities or renewal of existing agreements are expected to have provided an opportunity for CNC to grow its membership.
We anticipate premiums of Centene to be $32.6 billion in the second quarter, which indicates an improvement of 3.6% year over year. Our estimate for overall membership stands at 28.8 million as of Jun 30, 2023, up 8.9% year over year.
CNC’s Medicaid business is expected to have received an impetus from the continuing suspension of eligibility redeterminations in the to-be-reported quarter. We project Medicaid membership to witness 7.4% year-over-year growth as of Jun 30, 2023.
Increased enrolments in order to avail the Health Insurance Marketplace product of Centene, Ambetter Health, is likely to have significantly aided its Marketplace business in the second quarter. Our estimate for Commercial Marketplace membership stands at 3.1 million as of Jun 30, 2023, suggesting a 53.4% surge year over year. Additionally, the business is likely to have gained on solid product positioning and expanding market share.
However, lower service revenues are expected to have acted as a partial offset to the quarterly results of Centene. We expect the same to be $1.1 billion, which indicates a 53.6% plunge year over year.
The health benefits ratio (“HBR”) of CNC is likely to have benefited on the back of a small shift in mix owing to the health insurer’s strategy of delving deeper into the Marketplace business that operates at a structurally lower HBR. Our estimate for HBR is 85.5% in the second quarter, which indicates an improvement of 120 basis points year over year.
Centene’s margins are likely to have suffered a setback due to an elevated medical cost level. We expect medical costs to be $27.9 billion for the to-be-reported quarter, implying an increase of 2.1% year over year.
Other Stocks to Consider
Here are some other companies from the Medical space, which according to our model, also have the right combination of elements to beat on earnings this time around:
The Zacks Consensus Estimate for JAZZ’s second-quarter 2023 earnings is pegged at $4.48 per share, suggesting 4.2% growth from the prior-year quarter’s reported number.
The consensus mark for Jazz Pharmaceuticals’ second-quarter earnings has moved 0.2% north over the past seven days.
Boston Scientific Corporation (BSX - Free Report) has an Earnings ESP of +0.47% and a Zacks Rank of 2 at present. The Zacks Consensus Estimate for BSX’s second-quarter 2023 earnings stands at 49 cents per share, indicating a 11.4% rise from the prior-year quarter’s reported figure.
Boston Scientific’s earnings beat estimates in two of the trailing four quarters and missed the mark twice, the average surprise being 1.88%.
Neurocrine Biosciences, Inc. (NBIX - Free Report) has an Earnings ESP of +11.26% and a Zacks Rank of 3, currently. The Zacks Consensus Estimate for NBIX’s second-quarter 2023 earnings is pegged at 76 cents per share. A loss of 18 cents per share was reported in the prior-year quarter.
The consensus mark for Neurocrine Biosciences’ second-quarter earnings has moved 2.7% north over the past seven days.
Image: Bigstock
Will Growing Customer Base Aid Centene (CNC) in Q2 Earnings?
Centene Corporation (CNC - Free Report) is scheduled to release second-quarter 2023 results on Jul 28, before the opening bell.
Q2 Estimates
The Zacks Consensus Estimate for Centene’ second-quarter earnings per share is pegged at $2.05, which implies a rise of 15.8% from the prior-year quarter’s reported figure.
The consensus mark for revenues stands at $36 billion, suggesting 0.3% growth from the year-ago quarter’s reported number.
Earnings Surprise History
Centene’s bottom line beat estimates in two of the trailing four quarters and missed the mark twice, the average surprise being 0.59%. This is depicted in the chart below:
Centene Corporation Price and EPS Surprise
Centene Corporation price-eps-surprise | Centene Corporation Quote
What Our Quantitative Model Unveils
Our proven model predicts an earnings beat for Centene this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat, which is the case here.
Earnings ESP: Centene has an Earnings ESP of +0.94% because the Most Accurate Estimate of $2.07 is pegged higher than the Zacks Consensus Estimate of $2.05. You can uncover the best stocks before they’re reported with our Earnings ESP Filter.
Zacks Rank: CNC carries a Zacks Rank of 3.
Factors to Note
In the second quarter, revenues of Centene are likely to have benefited on the back of growing premiums resulting from an increased customer base across its Medicaid and Marketplace businesses. Additionally, several contract wins from federal or state authorities or renewal of existing agreements are expected to have provided an opportunity for CNC to grow its membership.
We anticipate premiums of Centene to be $32.6 billion in the second quarter, which indicates an improvement of 3.6% year over year. Our estimate for overall membership stands at 28.8 million as of Jun 30, 2023, up 8.9% year over year.
CNC’s Medicaid business is expected to have received an impetus from the continuing suspension of eligibility redeterminations in the to-be-reported quarter. We project Medicaid membership to witness 7.4% year-over-year growth as of Jun 30, 2023.
Increased enrolments in order to avail the Health Insurance Marketplace product of Centene, Ambetter Health, is likely to have significantly aided its Marketplace business in the second quarter. Our estimate for Commercial Marketplace membership stands at 3.1 million as of Jun 30, 2023, suggesting a 53.4% surge year over year. Additionally, the business is likely to have gained on solid product positioning and expanding market share.
However, lower service revenues are expected to have acted as a partial offset to the quarterly results of Centene. We expect the same to be $1.1 billion, which indicates a 53.6% plunge year over year.
The health benefits ratio (“HBR”) of CNC is likely to have benefited on the back of a small shift in mix owing to the health insurer’s strategy of delving deeper into the Marketplace business that operates at a structurally lower HBR. Our estimate for HBR is 85.5% in the second quarter, which indicates an improvement of 120 basis points year over year.
Centene’s margins are likely to have suffered a setback due to an elevated medical cost level. We expect medical costs to be $27.9 billion for the to-be-reported quarter, implying an increase of 2.1% year over year.
Other Stocks to Consider
Here are some other companies from the Medical space, which according to our model, also have the right combination of elements to beat on earnings this time around:
Jazz Pharmaceuticals plc (JAZZ - Free Report) has an Earnings ESP of +0.45% and a Zacks Rank of 1, currently. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for JAZZ’s second-quarter 2023 earnings is pegged at $4.48 per share, suggesting 4.2% growth from the prior-year quarter’s reported number.
The consensus mark for Jazz Pharmaceuticals’ second-quarter earnings has moved 0.2% north over the past seven days.
Boston Scientific Corporation (BSX - Free Report) has an Earnings ESP of +0.47% and a Zacks Rank of 2 at present. The Zacks Consensus Estimate for BSX’s second-quarter 2023 earnings stands at 49 cents per share, indicating a 11.4% rise from the prior-year quarter’s reported figure.
Boston Scientific’s earnings beat estimates in two of the trailing four quarters and missed the mark twice, the average surprise being 1.88%.
Neurocrine Biosciences, Inc. (NBIX - Free Report) has an Earnings ESP of +11.26% and a Zacks Rank of 3, currently. The Zacks Consensus Estimate for NBIX’s second-quarter 2023 earnings is pegged at 76 cents per share. A loss of 18 cents per share was reported in the prior-year quarter.
The consensus mark for Neurocrine Biosciences’ second-quarter earnings has moved 2.7% north over the past seven days.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.