CNC Financial Analysis

Analysis Date: 1/24/2025

Business Model

Centene generates revenue primarily through government-sponsored and commercial healthcare programs

Revenue Sources

• Medicaid (Traditional and High Acuity) - Primary revenue source
• Commercial (Marketplace and Group)
• Medicare (Medicare Advantage, Medicare PDP)
• TRICARE

Income Statement Analysis

• Revenue increased 10.5% YoY driven by Marketplace growth
• Medical costs increased due to higher utilization, HBR up to 89.2% from 87.0%
• Operating income declined 9.5% YoY due to higher medical costs

Balance Sheet Analysis

• Strong liquidity position with $36.7B in cash and investments
• Medical claims liability stable at $18.0B
• Days in claims payable at 51 days

Cash Flow Analysis

• Operating cash flow decreased due to timing of claims payments and premium receipts
• Share repurchases of $1.2B in Q3 2024

Capital Allocation

Centene maintains balanced capital deployment with $2.4B in share repurchases YTD through October 2024, while maintaining strong liquidity position for operations and growth investments

Management Commentary

Diversified portfolio successfully navigating dynamic landscape

Notable RFP wins and Medicare Stars improvements

Confident in full year adjusted EPS guidance of >$6.80

Overall Sentiment: Positive with strong execution on strategic initiatives and operational improvements

Recommendation

Rating: Buy

Reason for Rating: Strong execution, improving metrics, and attractive valuation

Disclaimer: This analysis is based on company filings and public information. It is for informational purposes only and not financial advice. Past performance does not guarantee future results.

Generated on: 1/24/2025, 1:40:06 PM