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Despite its impressive fundamentals, NYSE:CNC remains undervalued.

By Mill Chart

Last update: Apr 8, 2024

CENTENE CORP (NYSE:CNC) has caught the attention of our stock screener as a great value stock. NYSE:CNC excels in profitability, solvency, and liquidity, all while being very reasonably priced. Let's delve into the details.

Valuation Analysis for NYSE:CNC

To assess a stock's valuation, ChartMill utilizes a Valuation Rating on a scale of 0 to 10. This comprehensive assessment considers various valuation aspects, comparing price to earnings and cash flows, while factoring in profitability and growth. NYSE:CNC has achieved a 7 out of 10:

  • CNC is valuated reasonably with a Price/Earnings ratio of 10.93.
  • CNC's Price/Earnings ratio is rather cheap when compared to the industry. CNC is cheaper than 93.10% of the companies in the same industry.
  • The average S&P500 Price/Earnings ratio is at 26.07. CNC is valued rather cheaply when compared to this.
  • Based on the Price/Forward Earnings ratio of 10.64, the valuation of CNC can be described as reasonable.
  • CNC's Price/Forward Earnings ratio is rather cheap when compared to the industry. CNC is cheaper than 93.97% of the companies in the same industry.
  • When comparing the Price/Forward Earnings ratio of CNC to the average of the S&P500 Index (22.35), we can say CNC is valued rather cheaply.
  • Based on the Enterprise Value to EBITDA ratio, CNC is valued cheaper than 90.52% of the companies in the same industry.
  • Compared to the rest of the industry, the Price/Free Cash Flow ratio of CNC indicates a rather cheap valuation: CNC is cheaper than 93.10% of the companies listed in the same industry.
  • CNC has a very decent profitability rating, which may justify a higher PE ratio.

Profitability Insights: NYSE:CNC

Discover ChartMill's exclusive Profitability Rating, a proprietary metric that assesses stocks on a scale of 0 to 10. It takes into consideration various profitability ratios and margins, both in absolute terms and relative to industry peers. Notably, NYSE:CNC has achieved a 6:

  • CNC has a Return On Assets of 3.19%. This is in the better half of the industry: CNC outperforms 71.55% of its industry peers.
  • CNC has a better Return On Equity (10.46%) than 75.86% of its industry peers.
  • The Return On Invested Capital of CNC (5.13%) is better than 64.66% of its industry peers.
  • The last Return On Invested Capital (5.13%) for CNC is above the 3 year average (5.02%), which is a sign of increasing profitability.
  • CNC has a better Profit Margin (1.75%) than 66.38% of its industry peers.
  • In the last couple of years the Profit Margin of CNC has grown nicely.

Looking at the Health

To gauge a stock's financial health, ChartMill utilizes a Health Rating on a scale of 0 to 10. This comprehensive evaluation encompasses liquidity and solvency, both in absolute terms and in comparison to industry peers. NYSE:CNC has earned a 6 out of 10:

  • With a decent Altman-Z score value of 2.61, CNC is doing good in the industry, outperforming 67.24% of the companies in the same industry.
  • The Debt to FCF ratio of CNC is 2.47, which is a good value as it means it would take CNC, 2.47 years of fcf income to pay off all of its debts.
  • CNC has a Debt to FCF ratio of 2.47. This is amongst the best in the industry. CNC outperforms 81.90% of its industry peers.
  • Although CNC does not score too well on debt/equity it has very limited outstanding debt, which is well covered by the FCF. We will not put too much weight on the debt/equity number as it may be because of low equity, which could be a consequence of a share buyback program for instance. This needs to be investigated.

A Closer Look at Growth for NYSE:CNC

ChartMill assigns a proprietary Growth Rating to each stock. The score is computed by evaluating various growth aspects, like EPS and revenue growth. We take into account the history as well as the estimated future numbers. NYSE:CNC was assigned a score of 5 for growth:

  • CNC shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 15.63%, which is quite good.
  • Measured over the past years, CNC shows a quite strong growth in Earnings Per Share. The EPS has been growing by 13.28% on average per year.
  • The Revenue has been growing by 20.70% on average over the past years. This is a very strong growth!
  • CNC is expected to show quite a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 9.92% yearly.

Our Decent Value screener lists more Decent Value stocks and is updated daily.

Our latest full fundamental report of CNC contains the most current fundamental analsysis.

Disclaimer

This article should in no way be interpreted as advice in any way. The article is based on the observed metrics at the time of writing, but you should always make your own analysis and trade or invest at your own responsibility.

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CENTENE CORP

NYSE:CNC (5/29/2024, 7:04:00 PM)

Premarket: 68.49 -2.01 (-2.85%)

70.5

-2.22 (-3.05%)

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