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WellCare Health Plans (WCG) Stock Sinks As Market Gains: What You Should Know

Zacks Equity Research

In the latest trading session, WellCare Health Plans (WCG) closed at $317.15, marking a -1.11% move from the previous day. This change lagged the S&P 500's 0.03% gain on the day. Meanwhile, the Dow gained 0.11%, and the Nasdaq, a tech-heavy index, added 0.1%.

Heading into today, shares of the Medicare and Medicaid coverage provider had gained 0.83% over the past month, lagging the Medical sector's gain of 5.4% and the S&P 500's gain of 1.82% in that time.

WCG will be looking to display strength as it nears its next earnings release. The company is expected to report EPS of $2.18, up 33.74% from the prior-year quarter. Meanwhile, our latest consensus estimate is calling for revenue of $7.10 billion, up 16.92% from the prior-year quarter.

WCG's full-year Zacks Consensus Estimates are calling for earnings of $15.42 per share and revenue of $27.66 billion. These results would represent year-over-year changes of +39.8% and +35.5%, respectively.

Investors might also notice recent changes to analyst estimates for WCG. These recent revisions tend to reflect the evolving nature of short-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

Our research shows that these estimate changes are directly correlated with near-term stock prices. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an 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. Over the past month, the Zacks Consensus EPS estimate remained stagnant. WCG currently has a Zacks Rank of #2 (Buy).

Valuation is also important, so investors should note that WCG has a Forward P/E ratio of 20.8 right now. This represents a premium compared to its industry's average Forward P/E of 19.94.

We can also see that WCG currently has a PEG ratio of 1.42. 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 1.24 at yesterday's closing price.

The Medical - HMOs industry is part of the Medical sector. This group has a Zacks Industry Rank of 54, putting it in the top 22% 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.

Be sure to follow all of these stock-moving metrics, and many more, on Zacks.com.


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