CNC
HealthcareCentene Corporation
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XBRL · SEC EDGAR2008–2025(18yr)| Metric | FY 2008 | FY 2009 | FY 2010 | FY 2011 | FY 2012 | FY 2013 | FY 2014 | FY 2015 | FY 2016 | FY 2017 | FY 2018 | FY 2019 | FY 2020 | FY 2021 | FY 2022 | FY 2023 | FY 2024 | FY 2025Latest | YoY |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Revenue | $3.4B | $4.1B | $4.4B | $5.3B | $8.7B | $10.9B | $16.6B | $22.8B | $40.6B | $48.4B | $60.1B | $74.6B | $111.1B | $126.0B | $144.5B | $154.0B | $163.1B | $194.8B | +19.4% |
| Gross Profit | $3.3B | $4.0B | $4.4B | $5.3B | $8.6B | $10.5B | $15.3B | $21.1B | $38.7B | $46.5B | $57.7B | $72.2B | $107.8B | $14.5B | $16.9B | $17.6B | $17.1B | $14.2B | -16.8% |
| Gross Margin | 98.3% | 98.5% | 98.6% | 98.5% | 99.0% | 97.0% | 92.3% | 92.9% | 95.4% | 96.2% | 96.0% | 96.7% | 97.0% | 11.5% | 11.7% | 11.5% | 10.5% | 7.3% | -3.2pp |
| Operating Income | $131.6M | $138.1M | $157.1M | $190.3M | -$27.1M | $277.4M | $464.0M | $705.0M | $1.3B | $1.2B | $1.5B | $1.8B | $3.1B | $1.8B | $1.3B | $2.9B | $3.2B | -$7.6B | -340.1% |
| Operating Margin | 3.9% | 3.4% | 3.5% | 3.6% | -0.3% | 2.6% | 2.8% | 3.1% | 3.1% | 2.5% | 2.4% | 2.4% | 2.8% | 1.4% | 0.9% | 1.9% | 1.9% | -3.9% | -5.9pp |
| Net Income | $83.5M | $83.7M | $94.8M | $111.2M | $1.9M | $165.1M | $271.0M | $355.0M | $562.0M | $828.0M | $900.0M | $1.3B | $1.8B | $1.3B | $1.2B | $2.7B | $3.3B | -$6.7B | -301.9% |
| Net Margin | 2.5% | 2.0% | 2.1% | 2.1% | 0.0% | 1.5% | 1.6% | 1.6% | 1.4% | 1.7% | 1.5% | 1.8% | 1.6% | 1.1% | 0.8% | 1.8% | 2.0% | -3.4% | -5.5pp |
| Free Cash Flow | $156.8M | $224.5M | $105.6M | $192.7M | $196.5M | $314.7M | $1.1B | $508.0M | $1.5B | $1.1B | $559.0M | $753.0M | $4.6B | $3.3B | $5.3B | $7.3B | -$490.0M | $4.3B | +981.8% |
| FCF Margin | 4.7% | 5.5% | 2.4% | 3.6% | 2.3% | 2.9% | 6.8% | 2.2% | 3.8% | 2.2% | 0.9% | 1.0% | 4.2% | 2.6% | 3.6% | 4.7% | -0.3% | 2.2% | +2.5pp |
| EPS (Diluted) | $1.88 | $1.89 | $1.88 | $2.12 | $0.03 | $2.94 | $2.25 | $2.88 | $3.43 | $4.69 | $2.26 | $3.14 | $3.12 | $2.28 | $2.07 | $4.95 | $6.31 | $-13.53 | -314.4% |
1. THE BIG PICTURE
Centene is a scale leader in Medicaid and the Health Insurance Marketplace, yet it is currently a "growth without profit" story. While revenues are surging by double digits, Centene Corporation is grappling with a full-year net loss and a substantial $17.4 billion debt load, forcing a painful strategic pivot toward "restoring profitability" over simple expansion.
2. WHERE THE RISKS HIT HARDEST
Centene’s "local approach" and "partnership mindset" (10-K Item 1) are directly threatened by government contract reprocurements. Management touts its local integration as a competitive edge, yet Centene Corporation is currently protesting failed bids in Texas and Georgia (Risks). Losing these major state contracts would strip away the very scale advantages Centene relies on to maintain its market-leading position.
Furthermore, Centene’s expertise in managing underserved populations is being undermined by rising acuity and inaccurate medical cost estimation. Centene Corporation’s focus on complex, low-income members is a structural strength until costs spike; in 2025, higher-than-expected expenses in behavioral and home health contributed to a full-year net margin of -3.4% (Recent Results). This suggests that Centene’s data-driven insights are currently failing to keep pace with the actual health needs of its members.
3. WHAT THE NUMBERS SAY TOGETHER
The financial data reveals a stark disconnect between top-line expansion and bottom-line health. Centene leads its peer group in revenue growth (+19.4% TTMTTMTrailing Twelve Months — the most recent full year of financial data, updated on a rolling basis each quarter) but ranks last in both operating margin (-2.8%) and net margin (-2.6%) (XBRL). While the fourth quarter of 2025 saw a massive 23% revenue jump—fueled by a 75% spike in Medicare revenue—this growth was "empty," as Centene Corporation reported a GAAPGAAPGenerally Accepted Accounting Principles — the standard U.S. accounting rules all public companies must follow diluted loss per share of $(2.24) (8-K).
This divergence between growth and profit is structural rather than a one-time fluke. Centene Corporation is actively divesting its Magellan Health businesses and recording $513 million in impairment charges to streamline operations (8-K). Despite these losses, Centene maintains a 9.4% buyback yield—the highest among its peers—indicating that management is aggressively using cash to support the share price even as it faces a $(1.19) adjusted loss per share (Recent Results). Short interest stands at 3.4% of the float, reflecting a moderate level of market skepticism regarding this turnaround.
4. IS IT WORTH IT AT THIS PRICE?
At a forward P/EP/EPrice-to-Earnings ratio — share price divided by annual earnings per share; how much investors pay per dollar of profit. Higher P/E = higher growth expectations of 8.9x, Centene trades at a modest discount to the peer median of 9.6x. According to CAPM analysis, this 8.9x multiple implies the market is pricing in significantly less than 0.5% long-term growth, as even a 0.5% growth rate would justify a 15.3x multiple.
This deep discount is justified by Centene’s inferior margin profile and regulatory vulnerabilities. While Centene Corporation’s 19.4% revenue growth is impressive, it is worth less to investors because Centene keeps none of it as profit, whereas peers like Elevance (ELV) maintain a 3.2% net margin (XBRL). For the current price to be "right," Centene must prove it can stabilize its Medicaid business and navigate the expiration of enhanced subsidies under the One Big Beautiful Bill Act (OBBBA), which threatens to reduce Marketplace membership and increase the morbidity of its remaining pool (Competitive Position).
5. WHAT WOULD CHANGE THIS VIEW?
- Constructive if Centene hits its 2026 guidance of adjusted diluted EPSEPSEarnings Per Share — the company's net profit divided by its share count; the most common per-share profitability metric "greater than $3.00," which would signal that the "decisive actions" taken in late 2025 are successfully restoring margins (8-K).
- Cautious if the health benefits ratio (HBR) continues to rise in the Medicaid segment, proving that Centene Corporation cannot accurately price for the rising acuity of its members.
- Constructive if Centene successfully wins its protests for the Texas and Georgia Medicaid contracts, preserving its core revenue base.
6. BOTTOM LINE
Structural Advantage: Dominant scale as the nation's largest Medicaid and Marketplace insurer, supported by a capital-efficient "partnership" model that avoids the heavy costs of asset ownership.
Bottom Line: Centene is a high-risk turnaround play where massive revenue scale is currently being neutralized by poor cost control and a precarious regulatory environment.
1. Top 5 Material Risks
- Medical Cost Estimation and Acuity: Centene Corporation’s profitability is highly sensitive to its health benefits ratio (HBR). In 2025, Centene Corporation experienced higher-than-expected medical costs in Medicaid—specifically in behavioral health, home health, and high-cost drugs—and a significant negative adjustment to expected net risk adjustment revenue for the 2025 Marketplace plan year.
- Government Contract and Procurement Risks: A substantial portion of revenue is derived from government contracts that are subject to periodic reprocurement. Centene Corporation is currently protesting Medicaid reprocurements in Texas and Georgia where it was not a successful bidder. Failure to win these contracts or secure favorable terms can lead to material declines in revenue and profitability.
- Medicare Star Ratings and Funding: Approximately 60% of Medicare Advantage membership is associated with contracts rated 3.5 stars or better as of December 2025. Failure to maintain or improve these ratings, or the impact of CMS rate adjustments (such as the negative rate adjustment for risk model revisions in 2026), directly threatens quality bonus payments and overall plan profitability.
- Regulatory and Legislative Changes: The expiration of Enhanced Advance Premium Tax Credits (APTCs) and the implementation of the OBBBA and the 2025 Final Rule are expected to reduce 2026 Marketplace membership and increase the morbidity of the risk pool. These changes, alongside potential state-level reductions in reimbursement, threaten premium revenue and operating margins.
- Goodwill and Intangible Asset Impairment: Changes in market conditions and business strategy can trigger non-cash impairment charges. In the third quarter of 2025, Centene Corporation recorded a $6.7 billion non-cash goodwill impairment charge following a quantitative analysis triggered by the OBBBA and a decline in Centene Corporation's stock price.
2. Company-Specific Risks
- Pharmacy Benefit Management (PBM) and Specialty Pharmacy: Centene Corporation faces risks related to its specialty pharmacy business, including the potential inability to contract on favorable terms with manufacturers and disruptions at AcariaHealth or other network pharmacies that could impede the timely dispensing of prescriptions.
- PDP Bid Positioning: As of January 1, 2026, Centene Corporation increased its Prescription Drug Plan (PDP) membership to over 8.7 million members due to 2026 bid positioning. Centene Corporation faces heightened underwriting risk and potential bad debt exposure from the Medicare Prescription Payment Plan (M3P) under the Inflation Reduction Act (IRA).
- State-Operated System Dependencies: Centene Corporation relies on state-operated systems to qualify and assign members. Inaccuracies in state-provided eligibility lists can lead to Centene Corporation having to reimburse states for premiums paid for ineligible members, which it may be unable to recoup from providers.
- Encounter Data Accuracy: Centene Corporation is exposed to financial fines and penalties for noncompliance with encounter data submission requirements. Because states increasingly use this data to set premium rates, inaccurate or incomplete submissions can negatively impact the rates Centene Corporation receives.
3. Regulatory/Legal Risks
- Fraud, Waste, and Abuse (FWA): Centene Corporation is subject to the federal False Claims Act and various state-level anti-kickback statutes. Investigations into billing practices, prior authorizations, or risk adjustment submissions can result in civil monetary penalties, criminal fines, or exclusion from participation in Medicare and Medicaid programs.
- Data Privacy and Cybersecurity: Centene Corporation processes sensitive member information and is subject to HIPAA, the HITECH Act, and state-level laws like the CCPA. A breach or failure to comply with these standards—or those of third-party vendors—could lead to litigation, regulatory enforcement actions, and significant remediation costs.
- Risk Adjustment Data Validation (RADV) Audits: CMS has announced the intent to accelerate the timing and expand the scope of RADV audits. These audits can result in retroactive premium refunds to the government, which would directly reduce premium revenue in the period the repayment is required.
4. Financial Impact Map
Medical Cost Trends → Health Benefits Ratio (HBR) → Small changes in HBR create significant volatility in financial results due to narrow margins. Government Contract Loss → Premium Revenues → Loss of contracts in states like Texas or Georgia would cause a material decrease in total revenue. Goodwill Impairment → Shareholders' Equity → A $6.7 billion non-cash charge was recognized in Q3 2025, directly reducing the carrying value of assets. Medicare Star Rating Downgrades → Quality Bonus and Rebates → Lower ratings reduce the supplemental payments received from CMS, impacting net income. Debt Covenants → Liquidity and Interest Expense → The $17.4 billion in consolidated indebtedness requires compliance with a maximum debt-to-capital ratio, limiting the ability to pay dividends or fund acquisitions.
Recent Filings
| Form | Filed | Period |
|---|---|---|
| 10-K | Feb 2026 | Dec 2025 |
| 8-K | Feb 2026 | — |
| 10-Q | Oct 2025 | Sep 2025 |
| 14A | Mar 2025 | — |
AI-extracted key facts from press releases and SEC filings. Significance 1–10.
Centene withdraws 2025 guidance citing elevated Medicaid costs and ACA market acuity
- ▸Withdrew 2025 financial guidance due to operational headwinds
- ▸Higher-than-expected market acuity on ACA marketplaces impacting performance
- ▸Elevated Medicaid cost trends pressuring margins
- ▸Declining Medicaid enrollment following post-pandemic eligibility redeterminations
- ▸Shares declined 26.29% over one month and 45.40% over 52 weeks
Centene Q4 Revenue $49.73B +21.9% YoY, Beats Estimates by 3% Despite Guidance Miss
- ▸Centene Q4 revenue $49.73B, +21.9% YoY, beat estimates by 3%
- ▸Centene full-year revenue guidance missed analyst expectations
- ▸Centene stock down 18% since earnings report
- ▸Clover Health Q4 revenue $487.7M, +44.7% YoY, beat estimates by 4.4%
- ▸Health insurance sector group revenue beat consensus estimates by 0.8%
Centene ACA Membership Projected to Drop to 3.5 Million by Quarter End
- ▸ACA marketplace membership expected to fall from 5.5M to 3.5M by quarter end
- ▸Company facing operational pressure from reduced Medicaid and ACA enrollments
- ▸Implementing AI tools to manage hospital reimbursement disputes and improper billing
- ▸Medicare Advantage margins currently tracking below breakeven levels
- ▸Stock down 20.1% over past week and 40.4% over past year
Deerfield Management acquires 980,470 shares of Celcuity valued at $80.6 million
- ▸Deerfield Management acquired 980,470 CELC shares in Q4
- ▸Total CELC position value reached $170.95 million at quarter-end
- ▸CELC shares up 1,040% over the past 12 months
- ▸FDA granted priority review for gedatolisib with July 17, 2026 decision date
- ▸Gedatolisib NDA supported by Phase 3 VIKTORIA-1 trial results