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Centene Corp
CNC : NYSE : Health Care
$74.44 | %
Today's Range: 73.81 - 83.00
Avg. Daily Volume: 1,516,800
07/02/15 - 4:02 PM ET

Financial Analysis


CENTENE CORP's gross profit margin for the first quarter of its fiscal year 2015 is essentially unchanged when compared to the same period a year ago. The company has grown sales and net income significantly, outpacing the average growth rates of competitors within its industry. CENTENE CORP has weak liquidity. Currently, the Quick Ratio is 0.92 which shows a lack of ability to cover short-term cash needs. The liquidity decreased from the same period a year ago, despite already having weak liquidity to begin with. This would indicate deteriorating cash flow.

At the same time, stockholders' equity ("net worth") has greatly increased by 30.03% from the same quarter last year. Overall, the key liquidity measurements indicate that the company is in a position in which financial difficulties could develop in the future.

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Income Statement Q1 FY15 Q1 FY14
Net Sales ($mil)5131.03459.89
EBITDA ($mil)146.090.35
EBIT ($mil)119.070.03
Net Income ($mil)63.032.98


Balance Sheet Q1 FY15 Q1 FY14
Cash & Equiv. ($mil)1817.01317.7
Total Assets ($mil)6696.04446.45
Total Debt ($mil)1128.0817.08
Equity ($mil)1837.01412.67


Profitability Q1 FY15 Q1 FY14
Gross Profit Margin10.8911.15
EBITDA Margin2.842.61
Operating Margin2.322.02
Sales Turnover2.722.65
Return on Assets4.493.93
Return on Equity16.2312.2
Debt Q1 FY15 Q1 FY14
Current Ratio1.071.13
Debt/Capital0.380.37
Interest Expense10.07.02
Interest Coverage11.99.97


Share Data Q1 FY15 Q1 FY14
Shares outstanding (mil)118.89115.31
Div / share0.00.0
EPS0.520.29
Book value / share15.4512.25
Institutional Own % n/a n/a
Avg Daily Volume1393761.0819498.0

Valuation


BUY. This stock's P/E ratio indicates a premium compared to an average of 27.80 for the Health Care Providers & Services industry and a significant premium compared to the S&P 500 average of 20.31. Conducting a second comparison, its price-to-book ratio of 5.24 indicates a significant premium versus the S&P 500 average of 2.80 and a premium versus the industry average of 3.85. The current price-to-sales ratio is well below the S&P 500 average and is also below the industry average, indicating a discount. After reviewing these and other key valuation criteria, CENTENE CORP proves to trade at a premium to investment alternatives within the industry.


Price/Earnings
1 2 3 4 5
premium   discount
  Price/Cash Flow
1 2 3 4 5
premium   discount
CNC 32.95 Peers 27.80   CNC 9.50 Peers 16.90

Premium. A higher P/E ratio than its peers can signify a more expensive stock or higher growth expectations.

CNC is trading at a premium to its peers.

 

Discount. The P/CF ratio, a stock’s price divided by the company's cash flow from operations, is useful for comparing companies with different capital requirements or financing structures.

CNC is trading at a significant discount to its peers.

 
Price/Projected
Earnings
1 2 3 4 5
premium   discount
  Price to
Earnings/Growth
1 2 3 4 5
premium   discount
CNC 25.05 Peers 22.47   CNC NM Peers 1.40

Premium. A higher price-to-projected earnings ratio than its peers can signify a more expensive stock or higher future growth expectations.

CNC is trading at a significant premium to its peers.

 

Neutral. The PEG ratio is the stock’s P/E divided by the consensus estimate of long-term earnings growth. Faster growth can justify higher price multiples.

CNC's negative PEG ratio makes this valuation measure meaningless.

 
Price/Book
1 2 3 4 5
premium   discount
  Earnings Growth
1 2 3 4 5
lower   higher
CNC 5.24 Peers 3.85   CNC 63.12 Peers 49.29

Premium. A higher price-to-book ratio makes a stock less attractive to investors seeking stocks with lower market values per dollar of equity on the balance sheet.

CNC is trading at a significant premium to its peers.

 

Higher. Elevated earnings growth rates can lead to capital appreciation and justify higher price-to-earnings ratios.

CNC is expected to have an earnings growth rate that significantly exceeds its peers.

 
Price/Sales
1 2 3 4 5
premium   discount
  Sales Growth
1 2 3 4 5
premium   discount
CNC 0.53 Peers 0.93   CNC 54.53 Peers 15.23

Discount. In the absence of P/E and P/B multiples, the price-to-sales ratio can display the value investors are placing on each dollar of sales.

CNC is trading at a significant discount to its industry on this measurement.

 

Higher. A sales growth rate that exceeds the industry implies that a company is gaining market share.

CNC has a sales growth rate that significantly exceeds its peers.

 

 

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