What's in Store for Centene (CNC) This Earnings Season?
Centene Corporation CNC will release third-quarter 2018 results on Oct 23, before the market opens.
Centene’s top line will be supported by Government business and Medicaid businesses. The company should have witnessed impressive business growth from Maryland, Missouri, Nevada and Florida regions. The Medicaid membership has likely increased in the third quarter, driven by new contracts.
Moreover, the addition of Fidelis Care to the company’s portfolio has enabled it to hold a leadership position across the country’s four largest managed care states by membership, which also include California, Florida and Texas. With this deal, Centene has been able to boost its national leadership position in government sponsored healthcare space. Moreover, this particular buyout has probably helped the company gain membership and expand its Medicare business.
The Zacks Consensus Estimate for third-quarter revenues is pegged at $16.1 billion, reflecting a year-over-year surge of nearly 35.2%.
The company has likely enhanced Fidelis’ current capabilities. In the third quarter, it has likely positioned itself by investing in systems and capabilities. The Zacks Consensus Estimate for third-quarter earnings is pegged at $1.77, up 31.1% from the same time frame last year.
The cost trend of the company is expected to be stable.
What the Quantitative Model States
Our proven model does not conclusively show that Centene is likely to beat on earnings this to-be-reported quarter. This is because the stock needs to have the right combination of a positive Earnings ESP and a favorable Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. But that is not the case here as you can see below.
Earnings ESP: Centene has an Earnings ESP of +0.85%. This is because the Most Accurate Estimate is pegged at $1.79, higher than the Zacks Consensus Estimate of $1.77. You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.
Centene Corporation Price and EPS Surprise
Centene Corporation Price and EPS Surprise | Centene Corporation Quote
Zacks Rank: Centene carries a Zacks Rank #4 (Sell), which decreases the predictive power of ESP. Therefore, this combination leaves surprise prediction inconclusive. We caution against the Sell-rated stocks (4 or 5) going into the earnings announcement, especially when the company is seeing negative estimate revisions.
Stocks to Consider
Some stocks worth considering from the medical sector with the perfect combination of elements to surpass estimates in the next releases are as follows:
Allergan plc AGN is set to report third-quarter 2018 earnings figures on Oct 30. The stock has an Earnings ESP of +1.99% and a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.
Anthem, Inc. ANTM is set to post third-quarter earnings performance on Oct 31. This #2 Ranked stock has an Earnings ESP of +1.04%.
Molina Healthcare, Inc. MOH has an Earnings ESP of +4.82%. This #3 Ranked company is set to release third-quarter financial numbers on Oct 31.
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