Centene Corporation's Upcoming Earnings Report: A Deep Dive

• Centene Corporation (NYSE:CNC) is expected to report a significant decline in EPS by 71.9% year over year, despite an anticipated revenue increase of 11.1%.
• The increase in medical costs by 17.8% year over year is a major factor contributing to the pressure on Centene's margins.
• Despite the downward revision in EPS estimates, Centene's valuation metrics such as a P/E ratio of approximately 4.23 and a price-to-sales ratio of about 0.09 suggest a potentially undervalued stock.

Centene Corporation (NYSE:CNC) is a major player in the healthcare sector, providing services to government-sponsored and commercial healthcare programs. As a managed care organization, Centene offers a range of services, including Medicaid, Medicare, and health insurance marketplace plans. The company competes with other healthcare giants like UnitedHealth Group and Anthem.

On July 25, 2025, Centene is set to release its quarterly earnings, with Wall Street estimating an earnings per share (EPS) of $0.68. This figure represents a significant 71.9% decline from the previous year's quarter, as highlighted by Zacks. Despite this, revenue is projected to be approximately $44.7 billion, marking an 11.1% increase from the same quarter last year.

The decline in EPS is largely attributed to rising medical costs, which are expected to increase by 17.8% year over year. This surge in costs is putting pressure on Centene's margins, even as premium revenues are projected to rise by 14%, driven by growth in the Commercial Marketplace business. The revenue estimate for the quarter is pegged at $43.9 billion, indicating a 10.3% increase from the same period last year.

Over the past 30 days, there has been a substantial downward revision of 57.3% in the consensus EPS estimate for the quarter. Such revisions often signal potential investor behavior regarding the stock, as empirical studies have shown a strong correlation between trends in earnings estimate revisions and short-term stock performance.

Centene's financial metrics reveal a relatively low valuation compared to its earnings, with a price-to-earnings (P/E) ratio of approximately 4.23. The company's price-to-sales ratio stands at about 0.09, suggesting that investors are paying less than 10 cents for every dollar of sales. Additionally, Centene maintains a moderate level of debt with a debt-to-equity ratio of approximately 0.66, indicating a balanced financial structure.