Is CNC Banking on Membership Growth to Boost Scale & Profitability?

Membership growth is a core driver of Centene Corporation’s CNC earnings model. As a managed-care provider focused on Medicaid, Medicare and ACA marketplace plans, each additional enrollee directly contributes to premium revenues despite rising cost pressure. Expanding the member base not only strengthens top-line growth but also maximizes scale efficiencies by spreading administrative expenses and improving operational productivity. Amid elevated medical inflation and reimbursement headwinds, consistent membership gains are essential for sustaining revenue stability and protecting margins.

Centene is delivering solid membership expansion through strong Marketplace and Medicare PDP enrollment, a widened Medicare Advantage presence via its WellCare platform—introducing plans in new counties—upgraded star ratings, innovative benefit features, and focused local and regional growth and retention strategies. Contract wins and market expansion further support medical membership gains. Although Medicaid enrollment has softened, total membership reached 28 million as of June 30, 2025, driven by growth in Marketplace, Individual and Commercial Group, Medicare, and Medicare PDP plans.

Membership growth strengthens Centene’s scale, profitability and resilience, enabling it to manage market uncertainty with a diverse payer mix and strong positions in government-sponsored programs. While Medicaid provides relative stability, Medicare Advantage offers rapid expansion potential. With healthcare costs trending upward, ongoing membership momentum—fueled by product innovation, geographic reach and community-focused retention—remains a key driver of Centene’s sustained earnings power and competitive advantage.

What About its Peers?    

Humana Inc. HUM continues to grow its membership, fueled by Medicare Advantage and state-based programs. As of June 30, 2025, 68% of Humana’s 3,542,300 individual Medicare Advantage members were in value-based care. Humana projects a 175,000-250,000 increase in state-based contract membership in 2025.

UnitedHealth Group UNH is seeing robust growth in medical membership, fueled by strong demand for commercial and government-supported health plans. UnitedHealth’s vertically integrated model delivers coordinated, value-based care, appealing to seniors and employer-sponsored members. To maintain growth, UnitedHealth must emphasize strategic planning and enforce disciplined cost management across its operations.

CNC’s Price Performance

Shares of CNC have lost 55.3% year to date, underperforming the industry.

CNC’s Cheap Valuation

CNC trades at a forward 12-month price-to-earnings of 7.2, below the industry average of 12.1.

Estimate Movements for CNC

The Zacks Consensus Estimate for CNC’s third-quarter and fourth-quarter 2025 EPS witnessed a southward revision over the past seven days. The consensus estimate for full-year 2025 and 2026 EPS also followed suit.
 

The consensus estimate for CNC’s 2025 revenues indicates a year-over-year increase but the same for EPS suggests a decline. For 2026, the case is exactly the opposite.

CNC stock currently carries a Zacks Rank #5 (Strong Sell).

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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This article originally published on Zacks Investment Research (zacks.com).

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