NYSE:CNC appears to be flying under the radar despite its strong fundamentals.

Last update: Oct 16, 2023

Uncover the potential of CENTENE CORP (NYSE:CNC) as our stock screener's choice for an undervalued stock. NYSE:CNC maintains a strong financial position and offers an appealing valuation. We'll delve into the specifics below.

Looking at the Valuation

ChartMill employs its own Valuation Rating system for all stocks. This score, ranging from 0 to 10, is determined by evaluating different valuation factors, including price to earnings and free cash flow, both in absolute terms and relative to the market and industry. NYSE:CNC has earned a 8 for valuation:

A Price/Earnings ratio of 11.16 indicates a reasonable valuation of CNC.
Based on the Price/Earnings ratio, CNC is valued cheaper than 89.57% of the companies in the same industry.
The average S&P500 Price/Earnings ratio is at 25.61. CNC is valued rather cheaply when compared to this.
With a Price/Forward Earnings ratio of 10.51, the valuation of CNC can be described as very reasonable.
Compared to the rest of the industry, the Price/Forward Earnings ratio of CNC indicates a rather cheap valuation: CNC is cheaper than 87.83% of the companies listed in the same industry.
When comparing the Price/Forward Earnings ratio of CNC to the average of the S&P500 Index (18.74), we can say CNC is valued slightly cheaper.
CNC's Enterprise Value to EBITDA ratio is rather cheap when compared to the industry. CNC is cheaper than 89.57% of the companies in the same industry.
Based on the Price/Free Cash Flow ratio, CNC is valued cheaper than 94.78% of the companies in the same industry.
The low PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a rather cheap valuation of the company.

How do we evaluate the Profitability for NYSE:CNC?

ChartMill employs its own Profitability Rating system for stock evaluation. This score, ranging from 0 to 10, is derived from an analysis of diverse profitability metrics and margins. In the case of NYSE:CNC, the assigned 5 is noteworthy for profitability:

CNC has a Return On Assets of 3.27%. This is in the better half of the industry: CNC outperforms 70.43% of its industry peers.
CNC has a better Return On Equity (10.57%) than 76.52% of its industry peers.
CNC has a Return On Invested Capital of 4.72%. This is in the better half of the industry: CNC outperforms 65.22% of its industry peers.
CNC's Profit Margin of 1.83% is fine compared to the rest of the industry. CNC outperforms 62.61% of its industry peers.

A Closer Look at Health for NYSE:CNC

Every stock is evaluated by ChartMill, receiving a Health Rating on a scale of 0 to 10. This assessment considers different health aspects, including liquidity and solvency, both in absolute terms and relative to industry peers. NYSE:CNC has achieved a 5 out of 10:

CNC has a Altman-Z score of 2.58. This is in the better half of the industry: CNC outperforms 65.22% of its industry peers.
CNC has a debt to FCF ratio of 2.36. This is a good value and a sign of high solvency as CNC would need 2.36 years to pay back of all of its debts.
CNC has a better Debt to FCF ratio (2.36) than 80.00% 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.

Growth Assessment of NYSE:CNC

ChartMill assigns a Growth Rating to each stock, ranging from 0 to 10. This rating is determined by analyzing different growth elements, including EPS and revenue growth, spanning both historical and future figures. In the case of NYSE:CNC, the assigned 6 reflects its growth potential:

The Earnings Per Share has grown by an nice 8.52% over the past year.
The Earnings Per Share has been growing by 18.03% on average over the past years. This is quite good.
The Revenue has been growing by 24.47% on average over the past years. This is a very strong growth!
The Earnings Per Share is expected to grow by 11.86% on average over the next years. This is quite good.

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

Check the latest full fundamental report of CNC for a complete fundamental analysis.

Keep in mind

This is not investing advice! The article highlights some of the observations at the time of writing, but you should always make your own analysis and invest based on your own insights.