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Centene (CNC) Stock Sinks As Market Gains: What You Should Know

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Centene (CNC - Free Report) closed the most recent trading day at $125.54, moving -0.01% from the previous trading session. This change lagged the S&P 500's daily gain of 0.22%. At the same time, the Dow added 0.7%, and the tech-heavy Nasdaq gained 0.08%.

Prior to today's trading, shares of the healthcare company had gained 15.09% over the past month. This has outpaced the Medical sector's gain of 7.58% and the S&P 500's gain of 9.27% in that time.

Wall Street will be looking for positivity from CNC as it approaches its next earnings report date. This is expected to be February 5, 2019. In that report, analysts expect CNC to post earnings of $1.33 per share. This would mark year-over-year growth of 37.11%. Meanwhile, our latest consensus estimate is calling for revenue of $16.24 billion, up 26.79% from the prior-year quarter.

It is also important to note the recent changes to analyst estimates for CNC. These recent revisions tend to reflect the evolving nature of short-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

Our research shows that these estimate changes are directly correlated with near-term stock prices. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.

Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. Within the past 30 days, our consensus EPS projection has moved 0.24% lower. CNC is holding a Zacks Rank of #3 (Hold) right now.

In terms of valuation, CNC is currently trading at a Forward P/E ratio of 15. For comparison, its industry has an average Forward P/E of 15.02, which means CNC is trading at a discount to the group.

Also, we should mention that CNC has a PEG ratio of 0.99. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. The Medical - HMOs industry currently had an average PEG ratio of 1.17 as of yesterday's close.

The Medical - HMOs industry is part of the Medical sector. This industry currently has a Zacks Industry Rank of 56, which puts it in the top 22% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our individual industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

You can find more information on all of these metrics, and much more, on Zacks.com.


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