Group 1 - Adaptive Biotechnologies (ADPT) is outperforming its peers in the Medical sector, gaining about 47% year-to-date compared to the sector's average loss of 4.8% [4] - The Zacks Rank for Adaptive Biotechnologies is 2 (Buy), indicating a positive earnings outlook and strong analyst sentiment, with a 5.5% increase in the consensus estimate for full-year earnings [3][4] - The Medical group ranks 3 within the Zacks Sector Rank, which evaluates 16 different sector groups based on the average Zacks Rank of individual stocks [2] Group 2 - Adaptive Biotechnologies is part of the Medical - Biomedical and Genetics industry, which has seen an average loss of 8% this year, further highlighting ADPT's strong performance [6] - Another outperforming stock in the Medical sector is Centene (CNC), which has gained 3.9% year-to-date, with a Zacks Rank of 2 (Buy) and a 4.4% increase in the consensus EPS estimate [5][7] - The Medical - HMOs industry, where Centene belongs, has experienced a decline of 14% since the beginning of the year, contrasting with the performance of Adaptive Biotechnologies [7]

Centene (CNC) could be a solid choice for investors given its recent upgrade to a Zacks Rank #1 (Strong Buy). This upgrade primarily reflects an upward trend in earnings estimates, which is one of the most powerful forces impacting stock prices.The sole determinant of the Zacks rating is a company's changing earnings picture. The Zacks Consensus Estimate -- the consensus of EPS estimates from the sell-side analysts covering the stock -- for the current and following years is tracked by the system.Since a ch ...

Core Insights - Oklahoma Complete Health is enhancing its SoonerSelect benefits to improve health outcomes and overall well-being for its members [1][2] Benefit Enhancements - Introduction of a $30 per month Diaper Club for members aged 0-1 whose parents are enrolled in the Start Smart for Your Baby program or care management, starting July 1 [2] - Expansion of prescription limits where certain essential medicines will not count towards the 6-prescription monthly limit, aiding members who require more medications [3] - Over-the-Counter benefits will now provide a $30 allowance per member per quarter, allowing members to purchase items like cold medicines and vitamins [4] - Transportation benefits have been upgraded to allow up to 4 family members to accompany members to doctor's appointments, along with providing up to 15 rides for other essential trips [5] Member Engagement and Impact - In its first year, Oklahoma Complete Health completed over 11,651 referrals for social drivers of health needs, assisted more than 2,500 members with Food Rx benefits, facilitated over 20,684 YMCA visits, and distributed more than $2.1 million in reward dollars for healthy activities [6] - Member testimonials highlight the positive impact of the services provided, emphasizing support in accessing resources and maintaining communication [7] Organizational Overview - Oklahoma Complete Health is a care management organization focused on serving Oklahomans with various health insurance solutions and is a subsidiary of Centene Corporation [8][9]

Valuation Metrics - The price-to-earnings (P/E) ratio is a common valuation metric, but for companies with losses or minimal profits, the price-to-sales (P/S) ratio is more effective in identifying undervalued stocks [1] - The price-to-book (P/B) ratio is another useful tool for identifying low-priced stocks with high growth potential, calculated by dividing the stock's current price by its book value per share [2][6] Book Value - Book value represents the total value remaining for shareholders if a company were to liquidate its assets after settling all liabilities, calculated by subtracting total liabilities from total assets [4][5] - A P/B ratio of less than one indicates that a stock is trading below its book value, suggesting it may be undervalued, while a ratio above one may indicate overvaluation [6][7] Stock Examples - Centene Corporation (CNC) is a diversified healthcare company with a projected 3-5 year EPS growth rate of 11.5%, currently holding a Zacks Rank of 2 and a Value Score of A [16][17] - Pediatrix Medical Group (MD) provides specialized physician services with a projected EPS growth rate of 9.5% and also holds a Zacks Rank of 2 and a Value Score of A [18][19] - Pfizer (PFE), a major pharmaceutical company, has a projected EPS growth rate of 13.8% and maintains a Zacks Rank of 2 and a Value Score of A [19] - StoneCo (STNE) offers financial technology solutions with a projected EPS growth rate of 26.3%, holding a Zacks Rank of 1 and a Value Score of B [20] - Banco Santander (SAN), the largest bank in Spain, has a projected EPS growth rate of 9.6% and a Zacks Rank of 2 with a Value Score of A [21][22] Screening Parameters - Stocks with a P/B ratio less than the industry median indicate potential for price appreciation [12] - A P/S ratio lower than the industry average makes a stock more attractive [12] - A P/E ratio (F1) below the industry median is considered favorable [13] - A PEG ratio of less than 1 suggests that a stock is undervalued relative to its growth prospects [14] - Stocks should have a minimum trading price of $5 and an average 20-day volume of at least 100,000 for better liquidity [15]

Core Insights - The Q1 2025 earnings cycle is heavily focused on guidance, influenced by recent economic uncertainties and tariff announcements [1][9] - Several companies, including Centene, Boston Scientific, and Celestica, have raised their guidance, indicating positive performance [2][17] Centene (CNC) - Centene reported an adjusted EPS of $2.90 and sales of $46.6 billion, exceeding consensus estimates with a year-over-year earnings growth of 28% [3] - The company raised its 2025 premium and service revenues guidance by $6.0 billion, reflecting a 17% year-over-year improvement [3][6] - Analysts now expect Centene to post $172.8 billion in revenues for the current fiscal year, with a favorable Zacks Rank 2 (Buy) [6] Boston Scientific (BSX) - Boston Scientific surpassed both top and bottom line expectations, achieving a 12% EPS beat and sales 2.3% above expectations [8] - The company now anticipates FY25 sales growth between 15% and 17%, with current year sales expectations adjusted to $19.4 billion, a 10% increase from the previous year [10] Celestica (CLS) - Celestica exceeded Zacks Consensus EPS estimates by 8% and reported sales nearly 4% ahead of expectations, with a year-over-year sales growth of 20% [12] - The company raised its full-year 2025 revenue outlook to $10.85 billion from $10.7 billion, expecting non-GAAP adjusted EPS of $5.00, up from $4.75 [13] - Strong demand for solutions amid the AI trend and a shift to higher-margin products contributed to Celestica's stellar performance [13]

Financial Data and Key Metrics Changes - The company reported first quarter adjusted diluted EPS of $2.90, consistent with previous expectations, and maintained full-year 2025 adjusted EPS expectations of greater than $7.25 [5][24][37] - Premium and service revenue for Q1 reached $42.5 billion, with an increase in full-year revenue guidance to a midpoint of $165 billion, up from $159 billion [26][38] - The adjusted SG&A expense ratio improved to 7.9% from 8.7% year-over-year, reflecting better expense management [35] Business Line Data and Key Metrics Changes - Medicaid membership remained stable at approximately 12.9 to 13 million members, with a Medicaid HBR of approximately 93%, showing slight improvement from 93.4% in Q4 2024 [27][28] - The Medicare segment's HBR was 86.3%, with expectations of an inverted slope due to changes from the Inflation Reduction Act [32] - The commercial segment saw strong growth, with a Q1 HBR of 75.0%, up from 73.3% the previous year, driven by new marketplace members [34] Market Data and Key Metrics Changes - The company noted an increase in flu-related medical expenses of $130 million in Q1, which impacted overall performance but was expected to be a transitory issue [12][28] - The company anticipates a full-year composite Medicaid rating increase of over 4% [30] - The Medicare Advantage membership is projected to contribute an additional $1 billion to revenue guidance for 2025 due to better-than-expected retention [16] Company Strategy and Development Direction - The company is focused on margin recovery and aligning rates with member acuity across various geographies [11] - Strategic initiatives include advocating for sound health care policy and executing on contract wins in Medicaid, such as in Illinois and Nevada [14][15] - The company aims to achieve breakeven in Medicare Advantage by 2027, leveraging STARZ results and operational efficiencies [17][19] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in navigating the dynamic policy landscape, noting bipartisan support for extending health care premium tax credits [8][9] - The company remains optimistic about long-term growth, citing the attractiveness of end markets and the potential for market share capture [24][25] - Management acknowledged the challenges posed by high-cost drugs and the need for continued focus on operational efficiency [78][120] Other Important Information - The company is preparing for potential changes in the marketplace due to proposed rules from CMS, which could impact market dynamics starting in 2026 [22][42] - The risk corridor mechanism is expected to provide some protection against high specialty drug costs, which are anticipated to increase in 2026 [109][126] Q&A Session Summary Question: Details on flu-related costs and their impact - Management confirmed that the $130 million in flu-related costs was tracked closely and isolated to Medicaid, with no significant impact on Medicare [49][51] Question: Long-term earnings potential - Management reiterated optimism about expanding Medicaid margins and achieving breakeven in Medicare Advantage, with potential for revenue growth [54][56] Question: Impact of public exchange subsidies - Management indicated that the estimate of a $1 impact per share from the loss of enhanced APTCs remains valid, with ongoing discussions about potential extensions [57][61] Question: Risk adjustment and membership growth - Management noted that risk adjustment numbers remained consistent with expectations, and the majority of new membership is subsidized, aligning with the company's focus on low-income populations [96][99] Question: Specialty drug trends - Management highlighted the increasing trend in specialty drug utilization, particularly in non-low-income PDP members, and the need for states to adapt their programs accordingly [118][120]

Core Insights - Centene Corporation (CNC) reported first-quarter 2025 adjusted earnings per share (EPS) of $2.90, exceeding the Zacks Consensus Estimate by 22.9% and reflecting a 28% year-over-year increase [1] - Revenues increased by 15.4% year over year to $46.6 billion, surpassing the consensus mark by 7.2% [1] Revenue Breakdown - Medicaid revenues grew 4% year over year to $22.3 billion, while Medicare revenues surged 48% year over year to $8.8 billion [3] - Commercial revenues improved 31% year over year to $10.1 billion [3] - Total premiums reached $41.7 billion, a 17.4% year-over-year increase, driven by higher premiums and expanding membership in the Prescription Drug Plan (PDP) [4] Service Revenues and Income - Service revenues decreased by 3.8% year over year to $777 million, although it exceeded the consensus mark [5] - Investment and other income fell 29.9% year over year to $382 million, missing the consensus estimate [5] Membership and Health Benefits Ratio - Total membership was 27.9 million as of March 31, 2025, down 1.7% year over year, missing consensus expectations [6] - Membership in the Commercial business increased significantly by 27.3% year over year [6] - The health benefits ratio (HBR) deteriorated by 40 basis points year over year to 87.5% [6] Financial Performance - Adjusted net earnings rose 18.7% year over year to $1.4 billion [7] - Operating expenses totaled $45.1 billion, a 14.7% year-over-year increase, attributed to higher medical costs and administrative expenses [7] - Adjusted SG&A expense ratio improved by 80 basis points year over year to 7.9% [8] Cash and Debt Position - As of March 31, 2025, cash and cash equivalents were $14.8 billion, a 5.3% increase from the end of 2024 [9] - Total assets increased by 5.6% to $87 billion, while long-term debt decreased by 0.6% to $18.3 billion [9] Share Repurchase and Guidance - Centene repurchased common shares worth $41 million in the first quarter, with a remaining capacity of $2.2 billion under its share repurchase authorization [11] - For 2025, management anticipates premium and service revenues between $164-$166 billion, indicating a growth of 13.4% from 2024 [12] - Adjusted EPS is expected to exceed $7.25, reflecting a 1.1% increase from 2024 [13]

Financial Data and Key Metrics Changes - The company reported first quarter adjusted diluted EPS of $2.90, consistent with previous expectations, with full-year 2025 adjusted EPS expectations remaining unchanged at greater than $7.25 [5][24][37] - Premium and service revenue for Q1 was $42.5 billion, with an increase in full-year revenue guidance to a midpoint of $165 billion, up from $159 billion [26][38] - The adjusted SG&A expense ratio decreased to 7.9% from 8.7% year-over-year, driven by revenue growth and expense discipline [35] Business Line Data and Key Metrics Changes - Medicaid membership was stable at approximately 12.9 to 13 million members, with a Medicaid HBR of approximately 93%, showing slight improvement from 93.4% in Q4 2024 [27][28] - The Medicare segment performed in line with expectations, with Medicare Advantage membership contributing an additional $1 billion to the 2025 revenue outlook due to better-than-expected retention [16][31] - The commercial segment saw strong growth, with a Q1 HBR of 75.0%, up from 73.3% the previous year, driven by new marketplace members [34] Market Data and Key Metrics Changes - The company noted an increase in bipartisan support for extending health care premium tax credits, with 78% of swing voters supporting the extension [9] - The expiration of enhanced premium tax credits is anticipated to be addressed by Congress, with significant implications for the marketplace [10][23] - The company is preparing for potential impacts from proposed marketplace integrity and affordability rules, which could influence market dynamics starting in 2026 [22][42] Company Strategy and Development Direction - The company is focused on margin recovery and aligning rates with member acuity, with expectations that Medicaid will return to pre-pandemic margin levels [11][13] - Strategic initiatives include expanding Medicaid managed care into rural areas and enhancing the Medicare Advantage value proposition [14][16] - The company is committed to navigating the evolving policy landscape while advocating for sound health care policy [7][11] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the ability to manage through a dynamic policy landscape, noting that broad support for Medicaid benefit cuts is lacking [7][8] - The company anticipates continued momentum in discussions with state partners regarding rate negotiations and acuity data [75] - Management remains optimistic about long-term growth prospects, emphasizing the attractiveness of end markets and the potential for market share capture [24][25] Other Important Information - The company experienced $130 million in incremental medical expenses due to an active flu season, which offset underlying improvements in medical loss ratio [12][28] - The company is actively engaging with CMS on proposed rules that could impact the marketplace and is preparing for various potential outcomes [22][23] Q&A Session Summary Question: Details on flu-related costs - Management clarified that the $130 million in flu-related costs was tracked using a consistent definition and was isolated to Medicaid, with some flu impact seen in Medicare but not at the same level [49][51] Question: Long-term earnings outlook - Management confirmed that the long-term earnings potential remains optimistic, with opportunities for margin expansion in Medicaid and Medicare segments [54][56] Question: Impact of public exchange subsidies - Management indicated that the estimate of a $1 impact per share from the potential loss of enhanced APTCs remains valid, with ongoing discussions about the implications of work requirements [57][61] Question: Risk adjustment and membership growth - Management noted that risk adjustment numbers are consistent with expectations, and the majority of new membership remains subsidized, aligning with the company's focus on low-income populations [99][96] Question: Specialty drug trends - Management highlighted that specialty drug utilization trends are being closely monitored, particularly in Medicaid, with high-cost drugs impacting overall costs [118][120]

Core Insights - Centene reported $46.62 billion in revenue for Q1 2025, a 15.4% year-over-year increase, with an EPS of $2.90 compared to $2.26 a year ago, exceeding Zacks Consensus Estimates for both revenue and EPS [1] - The company delivered a revenue surprise of +7.24% and an EPS surprise of +22.88% compared to analyst expectations [1] Financial Performance Metrics - Total Medical Health Benefits loss ratio was 87.1%, better than the estimated 87.9% [4] - Membership in High Acuity Medicaid stood at 1.59 million, matching analyst estimates [4] - Medicaid membership reached 12.96 million, slightly above the 12.94 million estimate [4] - SG&A Expense Ratio was 7.9%, lower than the estimated 8.4% [4] - Premium and service revenues totaled $42.49 billion, exceeding the $40.12 billion estimate, reflecting a 16.9% year-over-year increase [4] - Premium revenues were $41.71 billion, surpassing the $39.35 billion estimate, marking a 17.4% year-over-year change [4] - Service revenues were $777 million, slightly above the $768.54 million estimate, but a 3.8% decrease year-over-year [4] - Premium tax revenues were $4.13 billion, exceeding the $3.52 billion estimate, with a 1.5% year-over-year increase [4] - Commercial premium and service revenues reached $10.15 billion, significantly above the $9.04 billion estimate, representing a 30.9% year-over-year increase [4] - Medicare premium and service revenues were $8.76 billion, exceeding the $8.54 billion estimate, with a 47.6% year-over-year increase [4] - Medicaid premium and service revenues totaled $22.30 billion, above the $21.45 billion estimate, reflecting a 3.9% year-over-year increase [4] - Other premium and service revenues were $1.28 billion, exceeding the $1.22 billion estimate, with a 7.6% year-over-year increase [4] Stock Performance - Centene's shares returned +2.2% over the past month, contrasting with the Zacks S&P 500 composite's -4.8% change [3] - The stock currently holds a Zacks Rank 3 (Hold), indicating expected performance in line with the broader market [3]

Core Insights - Centene (CNC) reported quarterly earnings of $2.90 per share, exceeding the Zacks Consensus Estimate of $2.36 per share, and up from $2.26 per share a year ago, representing an earnings surprise of 22.88% [1] - The company achieved revenues of $46.62 billion for the quarter ended March 2025, surpassing the Zacks Consensus Estimate by 7.24% and increasing from $40.41 billion year-over-year [2] Earnings Performance - Over the last four quarters, Centene has surpassed consensus EPS estimates three times, indicating strong earnings performance [2] - The company also topped consensus revenue estimates four times in the last four quarters, showcasing consistent revenue growth [2] Stock Performance - Centene shares have increased approximately 1.7% since the beginning of the year, contrasting with the S&P 500's decline of -6.8% [3] - The stock's immediate price movement will largely depend on management's commentary during the earnings call [3] Future Outlook - The current consensus EPS estimate for the upcoming quarter is $2.16 on revenues of $43.09 billion, while for the current fiscal year, the estimate is $7.13 on revenues of $172.83 billion [7] - The estimate revisions trend for Centene is mixed, resulting in a Zacks Rank 3 (Hold), suggesting the stock is expected to perform in line with the market in the near future [6] Industry Context - The Medical - HMOs industry, to which Centene belongs, is currently ranked in the bottom 22% of over 250 Zacks industries, indicating potential challenges ahead [8] - Empirical research indicates a strong correlation between near-term stock movements and trends in earnings estimate revisions, which could impact Centene's stock performance [5]