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Centene Corp (CNC) Earnings Insights and Market Response

Centene Corporation's quarterly earnings report is approaching, with projections indicating a slight uptick in EPS. However, projected full-year earnings for 2025 are down, creating mixed sentiment among investors.

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AI Rating:   5
Earnings per Share (EPS)
Centene is expected to report a non-GAAP EPS of $2.32 for the upcoming quarter, representing a 2.7% increase from the previous year. However, the forecasted EPS for fiscal 2025 is a decrease to $7.03, down nearly 2% from $7.17 in 2024, indicating potential headwinds for investor sentiment.

Revenue Growth
The healthcare provider projected revenue growth for fiscal 2025, estimating total premium and service revenues to range between $158 billion to $160 billion, a substantial increase from $145.5 billion in 2024. This suggests that Centene is expanding its revenue base, which could mitigate some concerns stemming from the EPS decline.

Net Income
Although exact figures for net income weren't reported directly in the analysis, the significant increase in overall revenues and past EPS performance suggests that net income may remain stable or improve despite full-year EPS projections.

Free Cash Flow (FCF)
There is a notable risk regarding Centene's cash flow. A severe drop from $8.1 billion in fiscal 2023 to just $154 million, coupled with a $587 million operating cash outflow in Q4, raises concerns. Investors should be wary of how this impacts liquidity and operational efficiency going forward.

Market Reaction
Despite exceeding previous financial expectations and achieving solid revenue growth, Centene's stock dropped 5.5% after its Q4 results were released, highlighting potential misalignment between actual performance and market expectations. The stock has seen a decline of nearly 10.9% over the past year, underperforming compared to both the S&P 500 and the Health Care Select Sector SPDR Fund.

In summary, while analysts maintain a "Moderate Buy" rating, significant attention should be focused on the contrasting outlooks regarding EPS and cash flow, which could cause volatility in stock performance in the near term.
Stocks:  CNC