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

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In the latest trading session, Centene (CNC) closed at $91.35, marking a +1.82% move from the previous day. This move lagged the S&P 500's daily gain of 2.76%. At the same time, the Dow added 2.43%, and the tech-heavy Nasdaq gained 0.13%.

Heading into today, shares of the healthcare company had gained 17.56% over the past month, outpacing the Medical sector's gain of 5.69% and the S&P 500's gain of 4.44% in that time.

Investors will be hoping for strength from Centene as it approaches its next earnings release, which is expected to be July 26, 2022. The company is expected to report EPS of $1.69, up 35.2% from the prior-year quarter. Meanwhile, our latest consensus estimate is calling for revenue of $35.44 billion, up 14.23% from the prior-year quarter.

CNC's full-year Zacks Consensus Estimates are calling for earnings of $5.64 per share and revenue of $142.41 billion. These results would represent year-over-year changes of +9.51% and +13.04%, respectively.

Investors should also note any recent changes to analyst estimates for Centene. These revisions help to show the ever-changing nature of near-term business trends. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

Our research shows that these estimate changes are directly correlated with near-term stock prices. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.

The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. The Zacks Consensus EPS estimate has moved 0.49% higher within the past month. Centene is currently sporting a Zacks Rank of #3 (Hold).

Valuation is also important, so investors should note that Centene has a Forward P/E ratio of 15.91 right now. For comparison, its industry has an average Forward P/E of 17.33, which means Centene is trading at a discount to the group.

It is also worth noting that CNC currently has a PEG ratio of 1.16. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. The Medical - HMOs was holding an average PEG ratio of 1.16 at yesterday's closing price.

The Medical - HMOs industry is part of the Medical sector. This industry currently has a Zacks Industry Rank of 42, which puts it in the top 17% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our individual industry groups by measuring the average Zacks Rank of the individual stocks within the groups. 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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