A strong performer from today's afternoon trading session is Centene, whose shares rose 2.1% to $37.16 per share. For those of you thinking about investing in the stock, here is a brief value analysis of the stock using the company's basic fundamental ratios.
Centene Trades at a Premium:
Centene Corporation operates as a healthcare enterprise that provides programs and services to under-insured and uninsured families, and commercial organizations in the United States. The company belongs to the Health Care sector, which has an average price to earnings (P/E) ratio of 22.94 and an average price to book (P/B) ratio of 3.19. In contrast, Centene has a trailing 12 month P/E ratio of -3.5 and a P/B ratio of 0.87.
Centene has moved -38.2% over the last year compared to 14.3% for the S&P 500 — a difference of -52.4%. Centene has a 52 week high of $66.81 and a 52 week low of $25.08.
Positive Cash Flows:
| 2019 | 2020 | 2021 | 2022 | 2023 | 2024 | |
|---|---|---|---|---|---|---|
| Revenue (M) | $74,639 | $111,115 | $125,982 | $144,547 | $153,999 | $163,071 |
| Net Margins | 2% | 2% | 1% | 1% | 2% | 2% |
| Net Income (M) | $1,321 | $1,808 | $1,347 | $1,202 | $2,702 | $3,305 |
| Net Interest Expense (M) | $412 | $728 | $665 | $665 | $725 | $688 |
| Depreciation & Amort. (M) | $643 | $1,259 | $1,335 | $614 | $575 | $549 |
| Diluted Shares (M) | 420 | 579 | 591 | 582 | 546 | 524 |
| Earnings Per Share | $3.14 | $3.12 | $2.28 | $2.07 | $4.95 | $6.31 |
| EPS Growth | n/a | -0.64% | -26.92% | -9.21% | 139.13% | 27.47% |
| Avg. Price | $54.34 | $62.87 | $67.69 | $82.67 | $74.21 | $37.42 |
| P/E Ratio | 33.96 | 20.41 | 29.18 | 40.13 | 15.14 | 6.06 |
| Free Cash Flow (M) | $753 | $4,634 | $3,295 | $5,257 | $7,254 | -$490 |
| CAPEX (M) | $730 | $869 | $910 | $1,004 | $799 | $644 |
| EV / EBITDA | 19.28 | 9.92 | 14.6 | 28.14 | 11.93 | 6.63 |
| Total Debt (M) | $13,947 | $16,977 | $19,293 | $18,261 | $18,081 | $18,750 |
| Net Debt / EBITDA | 0.75 | 1.42 | 1.98 | 3.2 | 0.25 | 1.26 |
| Current Ratio | 1.57 | 1.08 | 1.11 | 1.06 | 1.11 | 1.11 |
Centene has rapidly growing revenues and decreasing reinvestment in the business, a strong EPS growth trend, and healthy leverage levels. However, the firm has positive cash flows. Finally, we note that Centene has just enough current assets to cover current liabilities, as shown by its current ratio of 1.11.
