Why Centene (CNC) Stock Is Gaining Today

NEW YORK (TheStreet) -- Centene (CNC) was gaining 13.1% to $64.80 Tuesday after beating analysts' estimates for the first quarter.

The company posted earnings of 57 cents a share for the first quarter, beating the Capital IQ Consensus of 45 cents a share by 12 cents. Revenue rose 31.9% to $3.35 billion, beating analysts' estimates of $3.25 billion.

Looking to the full-year 2014 Centene expects earnings of between $3.60 and $3.90 a share, while analysts expect earnings of $3.62 a share for the year. The company expects revenue of between $14.2 billion and $14.8 billion for 2014. Analysts expect revenue of $14.58 billion for the year.

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TheStreet Ratings team rates CENTENE CORP as a Buy with a ratings score of B+. TheStreet Ratings Team has this to say about their recommendation:

"We rate CENTENE CORP (CNC) a BUY. This is driven by multiple strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its robust revenue growth, solid stock price performance, impressive record of earnings per share growth, compelling growth in net income and reasonable valuation levels. We feel these strengths outweigh the fact that the company shows low profit margins."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • The revenue growth came in higher than the industry average of 10.5%. Since the same quarter one year prior, revenues rose by 22.3%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • Compared to where it was a year ago today, the stock is now trading at a higher level, reflecting both the market's overall trend during that period and the fact that the company's earnings growth has been robust. Looking ahead, unless broad bear market conditions prevail, we still see more upside potential for this stock, despite the fact that it has already risen over the past year.
  • CENTENE CORP reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, CENTENE CORP increased its bottom line by earning $2.86 versus $0.01 in the prior year. This year, the market expects an improvement in earnings ($3.60 versus $2.86).
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Health Care Providers & Services industry. The net income increased by 487.6% when compared to the same quarter one year prior, rising from $9.06 million to $53.24 million.
  • You can view the full analysis from the report here: CNC Ratings Report

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Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer or Stephanie Link.

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