Core Insights - Centene Corporation (CNC) benefits from a growing Medicaid membership, an aging U.S. population, contract wins, strategic acquisitions, and a strong financial position [1] Financial Performance - Centene currently holds a Zacks Rank 2 (Buy) and has seen its stock gain 7.3% over the past three months, contrasting with a 22.1% decline in the industry [2] - The Zacks Consensus Estimate for Centene's 2025 earnings is $7.27 per share, reflecting a year-over-year improvement of 1.5%, with revenues estimated at $179.6 billion, indicating a 10.2% increase [5] - The 2026 earnings estimate is $7.69 per share, showing a 5.7% increase from 2025, with revenues projected at $180 billion, a slight growth of 0.2% [5] - Centene's average earnings surprise over the last four quarters is 25.47%, with three out of four quarters exceeding estimates [7] Valuation Metrics - Centene's price-to-earnings (P/E) ratio stands at 11.17, compared to the multiline industry’s trailing 12-month P/E of 7.95, indicating that the stock is currently undervalued [8] Growth Drivers - Revenue growth is driven by an expanding Medicaid member base, which reached 27.9 million as of March 31, 2025, contributing to premium growth [9] - Premium and service revenues increased by 17% year-over-year in Q1 2025, with management projecting revenues between $164 billion and $166 billion for 2025, representing a 13.4% growth from 2024 [11] - Centene has secured Medicaid contract awards in Nevada, Arizona, and Illinois, and its Commercial Marketplace division serves 5.6 million members, a 29.4% year-over-year increase [11] Strategic Initiatives - The company actively engages in mergers and acquisitions to enhance capabilities and geographic reach while divesting non-core assets to focus on Managed Care operations [12] - Centene's financial stability is supported by a strong liquidity position, holding $14.8 billion in cash and cash equivalents as of March 31, 2025, a 5.3% increase from the end of 2024 [13]