Centene: Attractive Risk-Reward For A Growing Company At A Value Price

Summary:

• Centene reported strong Q3’24 results, beating revenue expectations by $4.13 billion and achieving EPS of $1.62, driven by Medicaid rate increases and membership growth.
• Key highlights from the quarter include successful Medicaid reprocurements, improved 2025 Medicare Advantage star ratings, and advancements in AI for operational efficiency, positioning Centene for long-term growth.
• Despite some leverage, Centene’s investment-grade rating and attractive debt maturities suggest financial stability, with a promising outlook for EPS growth and Medicare revenue.
• Insider buying and undervaluation, with Centene trading at around 10x earnings, indicate confidence in the company’s future despite Medicaid redetermination and regulatory risks.

Introduction

Centene (NYSE:CNC) is a U.S. healthcare company that serves as an intermediary for government-sponsored and privately insured healthcare programs, focusing on providing services to under-insured and uninsured individuals. The company offers a wide range of health plans through Medicaid, Medicare, and

Analyst’s Disclosure: I/we have a beneficial long position in the shares of CNC either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Seeking Alpha’s Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.