Centene Corp

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CNC : NYSE : Health Care
$56.96 -0.52 | -0.9%
Today's Range: 56.55 - 58.03
Avg. Daily Volume: 1846500.0
12/05/16 - 4:03 PM ET

Financial Analysis


CENTENE CORP's gross profit margin for the third quarter of its fiscal year 2016 has increased 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 0.76 which shows a lack of ability to cover short-term cash needs. The company's liquidity has decreased from the same period last year.

At the same time, stockholders' equity ("net worth") has greatly increased by 178.40% 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 Q3 FY16 Q3 FY15
Net Sales ($mil)10846.05821.0
EBITDA ($mil)430.0231.0
EBIT ($mil)352.0202.0
Net Income ($mil)145.093.0


Balance Sheet Q3 FY16 Q3 FY15
Cash & Equiv. ($mil)3388.01827.0
Total Assets ($mil)19634.07322.0
Total Debt ($mil)4589.01281.0
Equity ($mil)5710.02051.0


Profitability Q3 FY16 Q3 FY15
Gross Profit Margin12.5411.51
EBITDA Margin3.963.96
Operating Margin3.253.47
Sales Turnover1.782.89
Return on Assets2.074.78
Return on Equity7.2117.06
Debt Q3 FY16 Q3 FY15
Current Ratio0.861.01
Debt/Capital0.450.38
Interest Expense57.011.0
Interest Coverage6.1818.36


Share Data Q3 FY16 Q3 FY15
Shares outstanding (mil)170.86119.2
Div / share0.00.0
EPS0.840.75
Book value / share33.4217.21
Institutional Own % n/a n/a
Avg Daily Volume1716522.01909056.0

Valuation


BUY. This stock's P/E ratio indicates a discount compared to an average of 22.67 for the Health Care Providers & Services industry and a discount compared to the S&P 500 average of 25.16. For additional comparison, its price-to-book ratio of 1.72 indicates a discount versus the S&P 500 average of 2.79 and a discount versus the industry average of 3.02. The current price-to-sales ratio is well below the S&P 500 average and is also below the industry average, indicating a discount. Upon assessment of these and other key valuation criteria, CENTENE CORP proves to trade at a discount 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 22.08 Peers 22.67   CNC 18.36 Peers 9.58

Average. An average P/E ratio can signify an industry neutral price for a stock and an average growth expectation.

CNC is trading at a valuation on par with its peers.

 

Premium. 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 premium 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 11.87 Peers 16.15   CNC 0.44 Peers 0.89

Discount. A lower price-to-projected earnings ratio than its peers can signify a less expensive stock or lower future growth expectations.

CNC is trading at a discount to its peers.

 

Discount. 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 trades at a significant discount to its peers.

 
Price/Book
1 2 3 4 5
premium   discount
  Earnings Growth
1 2 3 4 5
lower   higher
CNC 1.72 Peers 3.02   CNC -9.10 Peers 27.25

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

CNC is trading at a significant discount to its peers.

 

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

However, CNC is expected to significantly trail its peers on the basis of its earnings growth rate.

 
Price/Sales
1 2 3 4 5
premium   discount
  Sales Growth
1 2 3 4 5
premium   discount
CNC 0.28 Peers 0.78   CNC 65.22 Peers 13.43

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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