Can Centene Beat Q1 Earnings Estimates on Growing Premiums?

Leading healthcare plan provider Centene Corporation CNC is set to report its first-quarter 2025 results on April 25, before the opening bell. The Zacks Consensus Estimate for the to-be-reported quarter’s earnings is currently pegged at $2.36 per share on revenues of $43.47 billion. (See the Zacks Earnings Calendar to stay ahead of market-making news.)

The first-quarter earnings estimate has been constant over the past week. The bottom-line projection indicates a year-over-year increase of 4.4%. The Zacks Consensus Estimate for quarterly revenues suggests year-over-year growth of 7.6%.

For the current year, the Zacks Consensus Estimate for Centene’s revenues is pegged at $172.83 billion, implying a rise of 6% year over year. However, the consensus mark for current-year EPS is pegged at $7.13 per share, calling for a fall of around 0.6% on a year-over-year basis.

CNC beat the consensus estimate for earnings in three of the last four quarters and missed once, with the average surprise being 21.8%.

Centene Corporation Price and EPS Surprise

Centene Corporation price-eps-surprise | Centene Corporation Quote

Q1 Earnings Whispers for CNC

Our proven model predicts an earnings beat for the company this time. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat, which is the case here. You can see the complete list of today’s Zacks #1 Rank stocks here.

CNC has an Earnings ESP of +8.17% and a Zacks Rank #3. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

What’s Shaping CNC’s Q1 Results?

Centene's revenue growth in the first quarter is expected to have been supported by higher Premiums. The Zacks Consensus Estimate for Premiums stands at $39.4 billion, suggestinga 10.8% year-over-year increase, while our model estimate is also pegged at above $39 billion.

The Zacks Consensus Estimate for total memberships signals a 3% year-over-year increase, primarily due to growth in the commercial marketplace unit.

The Zacks Consensus Estimate for revenues from medicare is pegged at $8.5billion, calling fora 43.9% year-over-year increase, while our estimate stands at around $7.9 billion.

The factors mentioned above are expected to have contributed to the company's year-over-year growth, positioning it for an earnings beat. However, the upsides are likely to have been partially offset by the increased Health Benefit Ratio. The Zacks Consensus Estimate for total HBR for the first quarter is pegged at 87.85%, up from the year-ago level of 87.10%.

Also, our model estimate for total operating expenses indicates 7.1% year-over-year growth due to higher medical costs.

Other Stocks That Warrant a Look

Here are some other companies worth considering from the broader Medical space, as our model shows that these also have the right combination of elements to beat on earnings this time:

Cencora Inc. COR has an Earnings ESP of +0.91% and is a Zacks #2 Ranked player. 

The Zacks Consensus Estimate for Cencora’s bottom line for the to-be-reported quarter indicates7.1% year-over-year growth. Cencora beat earnings estimates in each of the past four quarters, with the average surprise being 4.9%.

Acrivon Therapeutics Inc. ACRV has an Earnings ESP of +1.02% and is a Zacks #2 Ranked player. 

The Zacks Consensus Estimate for Acrivon’s bottom line for the to-be-reported quarter suggests 21.9% year-over-year growth. Acrivon beat earnings estimates in three of the past four quarters and missed once, with the average surprise being 9.4%. The consensus estimate for ACRV’s revenues is pegged at $1.2million.

Tenet Healthcare Corp THC has an Earnings ESP of +0.72% and a Zacks Rank of 3. 

The Zacks Consensus Estimate for Tenet Healthcare’s earnings for the to-be-reported quarter is pegged at $3.12 per share. It has remained stable over the past week. The consensus estimate for revenues is pegged at $5.17 billion.

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

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