Investment Thesis
Centene faces severe profitability challenges with negative operating and net income despite strong revenue growth of 11.6%, indicating fundamental operational distress. While positive free cash flow of 4.3B provides near-term liquidity buffer, the company's negative ROE of -33.4% and operating margin of -3.9% signal structural issues in margin management that require immediate operational restructuring.
CNC Strengths
- Strong revenue growth of 11.6% YoY demonstrating market demand and scale expansion
- Solid free cash flow of 4.3B providing operational flexibility despite negative earnings
- Adequate liquidity with current ratio of 1.10x and cash position of 17.9B covering near-term obligations
CNC Risks
- Significant operating losses of 7.6B with negative operating margin of -3.9% indicating severe cost control issues
- Negative profitability with net margin of -3.4% and net income loss of 6.7B creating shareholder value destruction
- Deteriorating returns with ROE of -33.4% and ROA of -8.7% suggesting inefficient capital deployment and operational mismanagement
- Negative interest coverage of -42.8x indicating inability to service debt from operations, creating refinancing risk
Key Metrics to Watch
- Operating margin trajectory - critical to confirm whether losses represent temporary adjustment or structural problem
- Medical loss ratio and cost per member - key operational efficiency metrics for healthcare insurers
- Cash burn rate and free cash flow sustainability - operating losses may eventually exhaust positive FCF generation
CNC Financial Metrics
CNC Profitability Ratios
CNC Balance Sheet & Liquidity
CNC 5-Year Financial Trend
5-Year Trend Summary: CENTENE CORP's revenue has grown significantly by 48% over the 5-year period, indicating strong business expansion. The most recent EPS of $4.95 reflects profitable operations.
CNC Growth Metrics (YoY)
CNC Quarterly Performance
| Quarter | Revenue | Net Income | EPS |
|---|---|---|---|
| Q3 2025 | $36.9B | $713.0M | $1.36 |
| Q2 2025 | $36.0B | -$253.0M | $-0.51 |
| Q1 2025 | $36.3B | $1.2B | $2.16 |
| Q3 2024 | $35.0B | $469.0M | $0.87 |
| Q2 2024 | $34.8B | $1.1B | $1.92 |
| Q1 2024 | $35.0B | $1.1B | $2.04 |
| Q3 2023 | $33.7B | $469.0M | $0.87 |
| Q2 2023 | $34.0B | -$172.0M | $-0.29 |
Data sourced from SEC EDGAR 10-Q quarterly filings. Figures may represent quarterly or cumulative values.
CNC Capital Allocation
CNC SEC Filings
Access official SEC EDGAR filings for CENTENE CORP (CIK: 0001071739)