Are Strategic Contracts and Partnerships Centene's Growth Engine?

Contracts and partnerships are central to Centene Corporation’s CNC business model. Centene is one of the largest managed care providers across Medicaid, Medicare, and the Affordable Care Act (ACA) marketplaces. The company’s growth is closely linked to winning, renewing, and expanding government contracts, which ensure steady, recurring revenues while strengthening Centene’s scale advantage. State Medicaid contracts, in particular, act as long-term growth engines by expanding Centene’s geographic presence and membership base. Renewals highlight state agencies’ confidence in Centene’s ability to manage costs effectively, deliver quality outcomes and maintain regulatory compliance.

Partnerships complement this foundation by enhancing operational efficiency. Collaborations with state agencies, provider networks, technology partners and pharmacy benefit managers (PBMs) enable Centene to deliver care more cost-effectively without heavy capital commitments. These alliances help improve member outcomes, control drug costs and sharpen organizational focus, contributing to a better health benefit ratio (HBR) and stronger profitability.

While Medicaid and ACA markets operate on thinner margins than commercial insurance, Centene offsets this through disciplined contract execution, scale-driven efficiencies and targeted partnerships that mitigate medical cost volatility. As the company refines its portfolio and divests non-core operations, these recurring contracts and strategic alliances will remain critical drivers of growth, stability and earnings resilience.

To sum it up, Centene’s ability to secure and sustain government contracts, paired with its disciplined approach to partnerships, positions the company to achieve consistent top-line expansion and margin improvement over the long term.

What About CNC’s Peers?

Contracts and partnerships are central to UnitedHealth Group’s UNM success, supporting its scale and diversification across UnitedHealthcare and Optum. UnitedHealth secures recurring revenues through government and employer contracts, while strategic partnerships with providers, health systems and technology firms enhance efficiency and care delivery. UnitedHealth leverages these strengths to drive growth, competitiveness, and margin expansion.

Contracts and partnerships are vital to Humana HUM, reinforcing its Medicare Advantage leadership and integrated care approach. Humana depends on government contracts for steady revenues, while strategic partnerships with providers and technology firms drive efficiency and outcomes. Humana leverages these collaborations to secure growth, strengthen competitiveness and enhance margin performance.

CNC’s Price Performance

Shares of CNC have lost 52.3% year to date, underperforming the industry.

CNC’s Cheap Valuation

CNC trades at a forward 12-month price-to-earnings of 11.2, below the industry average of 14.7.

Estimate Movement for CNC

The Zacks Consensus Estimate for CNC’s third-quarter and fourth-quarter 2025 EPS witnessed a southward revision over the past 30 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.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

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

Zacks Investment Research