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Centene (CNC) Gains But Lags Market: What You Should Know

Zacks Equity Research

In the latest trading session, Centene (CNC) closed at $46.14, marking a +1.16% move from the previous day. This change lagged the S&P 500's 1.3% gain on the day. Meanwhile, the Dow gained 1.41%, and the Nasdaq, a tech-heavy index, added 1.75%.

Prior to today's trading, shares of the healthcare company had lost 6.84% over the past month. This has lagged the Medical sector's loss of 1.21% and the S&P 500's gain of 0.46% in that time.

Wall Street will be looking for positivity from CNC as it approaches its next earnings report date. On that day, CNC is projected to report earnings of $0.97 per share, which would represent year-over-year growth of 7.78%. Our most recent consensus estimate is calling for quarterly revenue of $18.36 billion, up 13.45% from the year-ago period.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $4.42 per share and revenue of $73.68 billion. These totals would mark changes of +24.86% and +22.56%, respectively, from last year.

Any recent changes to analyst estimates for CNC should also be noted by investors. These recent revisions tend to reflect the evolving nature of short-term business trends. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.

The Zacks Rank system ranges from #1 (Strong Buy) to #5 (Strong Sell). It has a remarkable, outside-audited track record of success, with #1 stocks delivering an average annual return of +25% since 1988. The Zacks Consensus EPS estimate has moved 0.06% lower within the past month. CNC is holding a Zacks Rank of #3 (Hold) right now.

Digging into valuation, CNC currently has a Forward P/E ratio of 10.33. This valuation marks a discount compared to its industry's average Forward P/E of 15.18.

Also, we should mention that CNC has a PEG ratio of 0.73. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. The Medical - HMOs industry currently had an average PEG ratio of 1.08 as of yesterday's close.

The Medical - HMOs industry is part of the Medical sector. This group has a Zacks Industry Rank of 49, putting it in the top 20% of all 250+ industries.

The Zacks Industry Rank includes is listed in order from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

You can find more information on all of these metrics, and much more, on Zacks.com.


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