Back to top

Image: Bigstock

Centene (CNC) Gains But Lags Market: What You Should Know

Read MoreHide Full Article

In the latest trading session, Centene (CNC - Free Report) closed at $44.09, marking a +0.62% move from the previous day. This change lagged the S&P 500's 0.64% gain on the day. Meanwhile, the Dow gained 0.57%, and the Nasdaq, a tech-heavy index, added 0.6%.

Heading into today, shares of the healthcare company had lost 6.33% over the past month, lagging the Medical sector's loss of 3.37% and the S&P 500's loss of 1.87% 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 October 22, 2019. On that day, CNC is projected to report earnings of $0.96 per share, which would represent year-over-year growth of 6.67%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $18.39 billion, up 13.62% from the year-ago period.

For the full year, our Zacks Consensus Estimates are projecting earnings of $4.42 per share and revenue of $73.74 billion, which would represent changes of +24.86% and +22.67%, respectively, from the prior year.

Investors might also notice recent changes to analyst estimates for CNC. These recent revisions tend to reflect the evolving nature of short-term business trends. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

Our research shows that these estimate changes are directly correlated with near-term stock prices. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an actionable rating system.

The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. The Zacks Consensus EPS estimate has moved 0.01% lower within the past month. CNC is holding a Zacks Rank of #4 (Sell) right now.

Investors should also note CNC's current valuation metrics, including its Forward P/E ratio of 9.93. For comparison, its industry has an average Forward P/E of 14.57, which means CNC is trading at a discount to the group.

It is also worth noting that CNC currently has a PEG ratio of 0.7. 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 was holding an average PEG ratio of 1.02 at yesterday's closing price.

The Medical - HMOs industry is part of the Medical sector. This group has a Zacks Industry Rank of 59, putting it in the top 24% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our 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.

Be sure to follow all of these stock-moving metrics, and many more, on Zacks.com.


In-Depth Zacks Research for the Tickers Above


Normally $25 each - click below to receive one report FREE:


Centene Corporation (CNC) - free report >>

Published in