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Is a Beat in the Cards for Centene (CNC) in Q2 Earnings?

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Centene Corporation (CNC - Free Report) will release second-quarter 2018 results on Jul 24, before the market opens.

Centene’s top line will be buoyed by strong performances by its Government business and Medicaid businesses. We specifically expect to see business growth from Maryland, Missouri, Nevada and Florida regions. The Zacks Consensus Estimate for second-quarter revenues is pegged at $13.8 billion, reflecting a year-over-year rise of nearly 16.1%.  

Medicaid membership is expected to increase driven by new contracts. Apart from Medicaid, the company’s Medicare business is poised for long-term growth. Increase in the company’s Medicare membership is also anticipated in the impending quarterly results.

The company has likely positioned itself by constantly investing in systems and capabilities.

The investment in RX Advance, a full-service pharmacy benefits manager, has likely helped the company reduce its administrative cost and affordable drug-impacted medical cost.

The company has likely experienced stable medical cost trends and has expanded through organic growth.

In the second quarter, Centene has likely seen its margins expand as it remains focused on process efficiencies to automation as well as on improving its scale.

What the Quantitative Model States

Per our proven model, Centene Corporation is likely to beat on earnings this quarter to be reported. This is because the stock has the right combination of a positive Earnings ESP and a favorable Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen.

Zacks ESP: Centene Corporation has an Earnings ESP of +0.63%. This is because the Most Accurate estimate is pegged at $1.77, higher than the Zacks Consensus Estimate of $1.76. You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.

Centene Corporation Price and EPS Surprise


Centene Corporation Price and EPS Surprise | Centene Corporation Quote

Zacks Rank: Centene Corporation carries a Zacks Rank #3, which increases the predictive power of ESP.

Conversely, the Sell-rated stocks (#4 or 5) should never be considered going into the earnings announcement, especially when the company is seeing negative estimate revisions.

Other Stocks to Consider

Some other stocks worth considering from the medical sector with the perfect combination of elements to surpass estimates in the next releases are as follows:

Magellan Health, Inc. (MGLN - Free Report) is set to report second-quarter 2018 earnings on Jul 24. The stock has an Earnings ESP of +2.83% and a Zacks Rank of 3.  You can see the complete list of today’s Zacks #1 Rank stocks here.

Align Technology, Inc. (ALGN - Free Report) is set to report second-quarter earnings on Jul 25. This #1 Ranked stock has an Earnings ESP of +7.34%.

Alkermes plc    (ALKS - Free Report) has an Earnings ESP of +154.55%. This #3 Ranked company is set to report second-quarter earnings on Jul 26.

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