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Centene vs. Molina: Which Managed Care Stock Has More Upside?
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Key Takeaways
Centene's diversified businesses support earnings recovery, with improving margins and cost controls.
CNC's premium and service revenues rose 4% YoY in the second quarter of 2026, supported by higher rates.
MOH's new Florida Medicaid contract could bring $6B annual premiums, while Medicare Duals drives growth.
The U.S. managed care industry is navigating rising medical costs, shifting Medicaid enrollment trends, changes in Medicare Advantage participation and evolving regulatory requirements. These factors are influencing revenue growth, medical cost management and profitability across health insurers, making operational efficiency and business mix important considerations when assessing their financial outlook.
Against this backdrop, Centene Corporation (CNC - Free Report) and Molina Healthcare, Inc. (MOH - Free Report) both have significant exposure to government-sponsored health insurance programs, particularly Medicaid, but differ in their business mix and strategic priorities. Centene operates across Medicaid, Medicare and Marketplace plans, while Molina has a more concentrated focus on Medicaid alongside its Medicare and Marketplace businesses. These distinct approaches could shape their competitive positioning and long-term earnings trajectories.
Let’s dive deep and closely compare the fundamentals to determine which stock offers greater upside right now.
The Case for Centene
Centene’s scale across Medicaid, Medicare and Marketplace plans provides multiple avenues for revenue growth. In the second quarter of 2026, premium and service revenues increased 4% year over year to $44.4 billion, supported by higher premium rates and growth in Medicare prescription drug plan membership. Its broad government-sponsored healthcare presence provides opportunities to build on state contract relationships, expand specialized coverage and adjust products to changing market conditions.
Medicare represents another potential growth driver, particularly through prescription drug plans. CNC’s Medicare segment reported a health benefits ratio (HBR) of 89.5% in the second quarter, which improved from 90.9% a year ago, reflecting favorable performance across Medicare Advantage and prescription drug plans. Continued membership growth in prescription drug coverage and disciplined pricing could support revenues and profitability. Meanwhile, Centene is simplifying its Medicare Advantage portfolio and increasing its focus on dual-eligible members, where its Medicaid experience can support integrated healthcare delivery and gradual margin recovery.
CNC's extensive Medicaid operations provide opportunities for profitability improvement through better reimbursement rates and more effective medical cost management. The company is strengthening care coordination, expanding member engagement and using advanced analytics to identify unnecessary medical expenses. These initiatives, particularly in behavioral health and payment integrity, could support gradual margin recovery despite membership pressures.
Centene's Marketplace business is another important source of earnings improvement. Repricing initiatives, refined risk adjustment estimates and better alignment between premiums and member healthcare needs have strengthened the business's financial outlook. Alongside these initiatives, investments in AI-driven processes, automation and organizational simplification could improve administrative efficiency and strengthen its long-term cost structure.
Additionally, CNC maintains a relatively solid financial position. It ended the June quarter with $24.2 billion in cash and cash equivalents. Its long-term debt-to-capital of 41.5% is below MOH’s 48.7%. This balance-sheet flexibility supports continued investment in technology, care delivery and other strategic initiatives.
The Case for Molina
Molina's Medicaid business offers meaningful scope for earnings recovery as reimbursement rates gradually adjust to underlying healthcare expenses. In the second quarter of 2026, the segment’s medical care ratio was 92.7%, while the company maintained its full-year Medicaid rate and medical cost trend assumptions at 4% and 5%, respectively. Better alignment between rates and medical costs, supported by disciplined underwriting and claims management, could help restore profitability.
Molina is also concentrating its Medicare strategy on dual-eligible members who qualify for both Medicare and Medicaid. Following the transition of its former Medicare-Medicaid Plan members to integrated products, the company plans to exit its traditional Medicare Advantage prescription drug business for 2027. This shift is intended to reduce exposure to a loss-making product while focusing resources on its Medicare Duals operations, which are expected to contribute positively to earnings. MOH is taking a more selective approach to its Marketplace business after unfavorable member mix and prior-year items pressured profitability. It expects to reduce Marketplace exposure by approximately $1 billion in 2027 while pursuing administrative efficiencies.
Contract expansion remains a key component of Molina's growth strategy. The new Florida Children's Medical Services contract, scheduled to begin in the fourth quarter of 2026, is expected to generate approximately $6 billion in annual premium revenues at full scale. MOH also retained its major Illinois Medicaid contract and renewed a Wisconsin agreement that provides opportunities to expand integrated dual-eligible coverage. These contract wins strengthen its revenue pipeline, while selective acquisitions could further expand its geographic presence and membership base.
Molina is also investing in technology and AI to improve operating efficiency and medical-cost management. The company has migrated to a cloud-based architecture and is using analytics to generate insights for members and state partners. Its AI initiatives are aimed at automating administrative processes and improving managed-care operations. MOH also exited the second quarter of 2026 with cash and cash equivalents of $5 billion, which increased from the 2025-end level of $4.2 billion, providing flexibility for acquisitions and other strategic investments.
How Do Estimates Compare for CNC & MOH?
The Zacks Consensus Estimate favors CNC at this stage. The consensus estimate for CNC’s 2026 earnings indicates a 135.1% increase from a year ago. Meanwhile, the consensus estimate for revenues suggests a 0.8% rise. It has witnessed one positive earnings estimate revision over the past 60 days against no downward revisions. The company beat earnings in each of the past four quarters with an average surprise of 151.3%.
Centene Corporation Price, Consensus and EPS Surprise
On the other hand, the consensus estimate for MOH’s 2026 earnings indicates a 52% fall from a year ago, while the same for revenues suggests a 2.1% decline. It has witnessed one positive earnings estimate revision over the past 60 days against no downward revisions. The company beat earnings in two of the past four quarters and missed twice.
Molina Healthcare, Inc Price, Consensus and EPS Surprise
Valuation also favors CNC. While Molina trades at a forward P/E of 22.43X, a premium to the industry average of 15.38X, Centene trades at a more modest 12.47X. CNC currently carries a Value Score of A, while MOH carries a Value Score of B.
Image Source: Zacks Investment Research
Price Performance Comparison
Over the past year, Centene’s shares have surged 79.7%, outperforming Molina, the broader industry and the S&P 500’s growth of 1.3%, 10.3% and 18.5%, respectively.
Price Performance – CNC, MOH, Industry & S&P 500
Image Source: Zacks Investment Research
Price Target Outlook: CNC vs. MOH
Centene currently trades below its average analyst price target of $72.06, implying an 11.7% potential upside from current levels. Molina also trades below its average analyst price target of $205.81, implying a 5.1% potential upside from current levels.
Conclusion
Molina's expanding Medicaid contract portfolio and growing Medicare Duals business offer long-term growth opportunities, but reimbursement pressures and Marketplace challenges could constrain near-term profitability. Centene, on the other hand, benefits from its diversified operations, improving Marketplace performance, strong prescription drug business and ongoing cost optimization initiatives. Its progress in restoring margins, coupled with a relatively favorable leverage profile, provides a stronger foundation for earnings recovery.
CNC appears better positioned for upside than MOH at present, even though both companies currently carry a Zacks Rank #3 (Hold).
View the Zacks #1 Rank List
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Centene vs. Molina: Which Managed Care Stock Has More Upside?
Key Takeaways
The U.S. managed care industry is navigating rising medical costs, shifting Medicaid enrollment trends, changes in Medicare Advantage participation and evolving regulatory requirements. These factors are influencing revenue growth, medical cost management and profitability across health insurers, making operational efficiency and business mix important considerations when assessing their financial outlook.
Against this backdrop, Centene Corporation (CNC - Free Report) and Molina Healthcare, Inc. (MOH - Free Report) both have significant exposure to government-sponsored health insurance programs, particularly Medicaid, but differ in their business mix and strategic priorities. Centene operates across Medicaid, Medicare and Marketplace plans, while Molina has a more concentrated focus on Medicaid alongside its Medicare and Marketplace businesses. These distinct approaches could shape their competitive positioning and long-term earnings trajectories.
Let’s dive deep and closely compare the fundamentals to determine which stock offers greater upside right now.
The Case for Centene
Centene’s scale across Medicaid, Medicare and Marketplace plans provides multiple avenues for revenue growth. In the second quarter of 2026, premium and service revenues increased 4% year over year to $44.4 billion, supported by higher premium rates and growth in Medicare prescription drug plan membership. Its broad government-sponsored healthcare presence provides opportunities to build on state contract relationships, expand specialized coverage and adjust products to changing market conditions.
Medicare represents another potential growth driver, particularly through prescription drug plans. CNC’s Medicare segment reported a health benefits ratio (HBR) of 89.5% in the second quarter, which improved from 90.9% a year ago, reflecting favorable performance across Medicare Advantage and prescription drug plans. Continued membership growth in prescription drug coverage and disciplined pricing could support revenues and profitability. Meanwhile, Centene is simplifying its Medicare Advantage portfolio and increasing its focus on dual-eligible members, where its Medicaid experience can support integrated healthcare delivery and gradual margin recovery.
CNC's extensive Medicaid operations provide opportunities for profitability improvement through better reimbursement rates and more effective medical cost management. The company is strengthening care coordination, expanding member engagement and using advanced analytics to identify unnecessary medical expenses. These initiatives, particularly in behavioral health and payment integrity, could support gradual margin recovery despite membership pressures.
Centene's Marketplace business is another important source of earnings improvement. Repricing initiatives, refined risk adjustment estimates and better alignment between premiums and member healthcare needs have strengthened the business's financial outlook. Alongside these initiatives, investments in AI-driven processes, automation and organizational simplification could improve administrative efficiency and strengthen its long-term cost structure.
Additionally, CNC maintains a relatively solid financial position. It ended the June quarter with $24.2 billion in cash and cash equivalents. Its long-term debt-to-capital of 41.5% is below MOH’s 48.7%. This balance-sheet flexibility supports continued investment in technology, care delivery and other strategic initiatives.
The Case for Molina
Molina's Medicaid business offers meaningful scope for earnings recovery as reimbursement rates gradually adjust to underlying healthcare expenses. In the second quarter of 2026, the segment’s medical care ratio was 92.7%, while the company maintained its full-year Medicaid rate and medical cost trend assumptions at 4% and 5%, respectively. Better alignment between rates and medical costs, supported by disciplined underwriting and claims management, could help restore profitability.
Molina is also concentrating its Medicare strategy on dual-eligible members who qualify for both Medicare and Medicaid. Following the transition of its former Medicare-Medicaid Plan members to integrated products, the company plans to exit its traditional Medicare Advantage prescription drug business for 2027. This shift is intended to reduce exposure to a loss-making product while focusing resources on its Medicare Duals operations, which are expected to contribute positively to earnings. MOH is taking a more selective approach to its Marketplace business after unfavorable member mix and prior-year items pressured profitability. It expects to reduce Marketplace exposure by approximately $1 billion in 2027 while pursuing administrative efficiencies.
Contract expansion remains a key component of Molina's growth strategy. The new Florida Children's Medical Services contract, scheduled to begin in the fourth quarter of 2026, is expected to generate approximately $6 billion in annual premium revenues at full scale. MOH also retained its major Illinois Medicaid contract and renewed a Wisconsin agreement that provides opportunities to expand integrated dual-eligible coverage. These contract wins strengthen its revenue pipeline, while selective acquisitions could further expand its geographic presence and membership base.
Molina is also investing in technology and AI to improve operating efficiency and medical-cost management. The company has migrated to a cloud-based architecture and is using analytics to generate insights for members and state partners. Its AI initiatives are aimed at automating administrative processes and improving managed-care operations. MOH also exited the second quarter of 2026 with cash and cash equivalents of $5 billion, which increased from the 2025-end level of $4.2 billion, providing flexibility for acquisitions and other strategic investments.
How Do Estimates Compare for CNC & MOH?
The Zacks Consensus Estimate favors CNC at this stage. The consensus estimate for CNC’s 2026 earnings indicates a 135.1% increase from a year ago. Meanwhile, the consensus estimate for revenues suggests a 0.8% rise. It has witnessed one positive earnings estimate revision over the past 60 days against no downward revisions. The company beat earnings in each of the past four quarters with an average surprise of 151.3%.
Centene Corporation Price, Consensus and EPS Surprise
Centene Corporation price-consensus-eps-surprise-chart | Centene Corporation Quote
On the other hand, the consensus estimate for MOH’s 2026 earnings indicates a 52% fall from a year ago, while the same for revenues suggests a 2.1% decline. It has witnessed one positive earnings estimate revision over the past 60 days against no downward revisions. The company beat earnings in two of the past four quarters and missed twice.
Molina Healthcare, Inc Price, Consensus and EPS Surprise
Molina Healthcare, Inc price-consensus-eps-surprise-chart | Molina Healthcare, Inc Quote
Valuation: CNC vs. MOH
Valuation also favors CNC. While Molina trades at a forward P/E of 22.43X, a premium to the industry average of 15.38X, Centene trades at a more modest 12.47X. CNC currently carries a Value Score of A, while MOH carries a Value Score of B.
Image Source: Zacks Investment Research
Price Performance Comparison
Over the past year, Centene’s shares have surged 79.7%, outperforming Molina, the broader industry and the S&P 500’s growth of 1.3%, 10.3% and 18.5%, respectively.
Price Performance – CNC, MOH, Industry & S&P 500
Image Source: Zacks Investment Research
Price Target Outlook: CNC vs. MOH
Centene currently trades below its average analyst price target of $72.06, implying an 11.7% potential upside from current levels. Molina also trades below its average analyst price target of $205.81, implying a 5.1% potential upside from current levels.
Conclusion
Molina's expanding Medicaid contract portfolio and growing Medicare Duals business offer long-term growth opportunities, but reimbursement pressures and Marketplace challenges could constrain near-term profitability. Centene, on the other hand, benefits from its diversified operations, improving Marketplace performance, strong prescription drug business and ongoing cost optimization initiatives. Its progress in restoring margins, coupled with a relatively favorable leverage profile, provides a stronger foundation for earnings recovery.
CNC appears better positioned for upside than MOH at present, even though both companies currently carry a Zacks Rank #3 (Hold).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.