Factors That Make Centene Stock a Lucrative Pick Right Now

Centene Corporation CNC is aided by a growing Medicaid membership, an aging U.S. population, contract wins, strategic acquisitions and a notable financial standing.

CNC’s Zacks Rank & Price Performance

Centene currently carries a Zacks Rank #2 (Buy).

The stock has gained 7.3% in the past three months against the industry’s 22.1% decline. The Zacks Medical sector declined 9.9% and the S&P 500 composite decreased 1.3% in the same time frame.

Centene’s Favorable Style Score

CNC carries an impressive Value Score of A. Value Score helps find stocks that are undervalued. Back-tested results have shown so far that stocks with a favorable Value Score in combination with a solid Zacks Rank are the best investment bets.

CNC’s Robust Prospects

The Zacks Consensus Estimate for Centene’s 2025 earnings is pegged at $7.27 per share, indicating a year-over-year improvement of 1.5%. The consensus mark for revenues is pegged at $179.6 billion, implying a year-over-year increase of 10.2%.

The consensus estimate for 2026 earnings is pegged at $7.69 per share, indicating an increase of 5.7% from the 2025 estimate. The consensus estimate for revenues is pegged at $180 billion, implying 0.2% growth from the 2025 estimate.

Centene’s Earnings Surprise History

CNC’s bottom line outpaced estimates in three of the trailing four quarters and missed the mark once, the average surprise being 25.47%.

CNC’s Valuation

Price-to-earnings (P/E) is one of the multiples used for valuing healthcare stocks. Compared with the multiline industry’s trailing 12-month P/E ratio of 7.95, Centene has a reading of 11.17. It is quite evident that the stock is currently undervalued.

Centene’s Performance Drivers

Centene’s revenue growth is underpinned by a steadily expanding member base in its Medicaid business, which continues to drive premium growth for the health insurer. The solid performance of this business has resulted in multiple contract wins and renewals, further boosting membership. As of March 31, 2025, Centene’s total membership reached 27.9 million.

The company’s proficiency in delivering specialized services has strengthened its engagement with both members and healthcare providers. This capability enhances care delivery for individuals in government-funded healthcare programs. Moreover, the aging U.S. population fuels consistent demand for Medicare plans, reinforcing long-term growth prospects for Centene’s offerings.

In the first quarter of 2025, premium and service revenues rose 17% compared with the prior year. Management anticipates the metric to lie between $164 billion and $166 billion in 2025, the mid-point of which indicates a 13.4% growth from the 2024 figure. Notably, Centene secured Medicaid contract awards in Nevada, Arizona and Illinois so far this year. Its Commercial Marketplace division also exhibited strength, serving 5.6 million members as of March 31, 2025, an impressive 29.4% increase year over year.

Centene actively utilizes mergers and acquisitions to expand its capabilities and extend its geographic reach. At the same time, the company divests non-core or underperforming assets to sharpen its focus on Managed Care operations. These divestitures often support strategic initiatives such as share repurchases and debt reduction. 

The company’s financial stability is reinforced by its strong liquidity position and consistent cash flow generation. As of March 31, 2025, Centene held $14.8 billion in cash and cash equivalents, up 5.3% from the 2024-end level.

Other Stocks to Consider

Other top-ranked stocks in the Medical space are CorMedix Inc. CRMD, Encompass Health Corporation EHC and Integer Holdings Corporation ITGR, each currently sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

CorMedix’s earnings surpassed estimates in each of the last four quarters, the average surprise being 25.82%. The Zacks Consensus Estimate for CRMD’s 2025 earnings is pegged at 93 cents per share. A loss of 30 cents per share was incurred in the prior year. The consensus mark for revenues indicates a nearly four-fold increase from the year-ago actual. The consensus mark for CRMD’s 2025 earnings has moved 40.9% north in the past 30 days. 

Encompass Health’s earnings beat estimates in each of the trailing four quarters, the average surprise being 12.33%. The Zacks Consensus Estimate for EHC’s 2025 earnings indicates an improvement of 13.1% from the year-ago reported figure. The same for revenues implies growth of 9.5 % from the year-ago reported number. The consensus mark for EHC’s 2025 earnings has moved 4.6% north in the past 30 days.

The bottom line of Integer outpaced estimates in three of the trailing four quarters and missed the mark once, the average surprise being 2.77%. The Zacks Consensus Estimate for ITGR’s 2025 earnings indicates an improvement of 19.5% from the year-ago reported figure. The same for revenues implies growth of 7.7% from the year-ago reported number. The consensus mark for ITGR’s 2025 earnings has moved 4.5% north in the past 30 days. 

Shares of CorMedix and Encompass Health have gained 24.6% and 24.8%, respectively, in the past three months. However, Integer stock has declined 6.1% in the same time frame.  

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

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