Why Is Centene (CNC) Down 2.9% Since Last Earnings Report?

Core Viewpoint - Centene's recent earnings report shows strong performance in adjusted EPS and revenue growth, but challenges remain with membership declines and increased operating expenses [2][3][12]. Financial Performance - Adjusted EPS for Q4 2024 was 80 cents, exceeding estimates by 63.3% and up 77.8% year over year [2]. - Total revenues reached $40.8 billion, a 3.4% increase year over year, surpassing consensus estimates by 4.8% [2]. - Full-year revenues for 2024 were$ 163.1 billion, a 5.9% increase from 2023, with adjusted EPS of $7.17, up 7.3% year over year [12]. Revenue Breakdown - Medicaid revenues decreased by 1% to$ 20.8 billion, while Medicare revenues increased by 4% to $5.5 billion [4]. - Commercial revenues grew significantly by 18% year over year to$ 8.7 billion [4]. - Premiums totaled $35.5 billion, rising 3.8% year over year, exceeding estimates [5]. Membership and Operational Metrics - Total membership as of Dec. 31, 2024, was 28.6 million, a 4.1% increase year over year [7]. - Health Benefits Ratio (HBR) deteriorated by 10 basis points to 89.6% [7]. - Total operating expenses increased by 2.5% to$ 40.6 billion, driven by higher medical costs and premium tax expenses [8]. Cash Flow and Debt - Cash and cash equivalents stood at $14.1 billion, down 18.2% from the end of 2023 [10]. - Long-term debt rose by 4% to$ 18.4 billion [10]. - Net cash from operations was $154 million, significantly lower than the previous year [11]. Future Guidance - For 2025, management projects premium and service revenues of$ 158- $160 billion, indicating a 9.3% growth from 2024 [14]. - Adjusted EPS is expected to exceed$ 7.25, reflecting a 1.1% increase from 2024 [14]. Market Position and Comparisons - Centene's stock has a Zacks Rank of 3 (Hold), indicating an expectation of in-line returns in the coming months [17]. - In comparison, Cigna, a competitor in the same industry, reported revenues of $65.68 billion, a year-over-year increase of 28.4% [18].