Give me a comprehensive analysis of CNC

``` The deep research logic is organized as follows: Okay, let's tackle this comprehensive analysis of Centene Corporation (CNC). The user is interested in a detailed breakdown, so I need to cover all the key areas. First, I'll start by looking at the financial data provided in the references. The latest quarterly results show a revenue of $46.62 billion, net income of $1.31 billion, and diluted EPS of $2.63. The year-over-year growth rates are 15.38% for revenue, 13.47% for net income, and 21.76% for EPS. That's solid growth, but I need to check if this aligns with the 3-year CAGR numbers. The 3-year revenue CAGR is 6.21%, which is lower than the recent YoY growth, indicating acceleration. The net income and EPS CAGRs are much higher at 65.54% and 74.59%, respectively. That's impressive, but I should note that these are compounded annual growth rates over three years, so the recent quarter's performance might be a continuation of that trend. Next, the user mentioned CNC's withdrawal of 2025 guidance. The references highlight that this was due to lower-than-expected risk adjustment revenue from the Health Insurance Marketplace. The $1.8 billion reduction in net risk adjustment revenue translates to a $2.75 impact on adjusted EPS. This is a significant hit and explains the recent stock price drop. The user is interested in megacap stocks, so I should compare CNC's market cap and financials to other large companies in their portfolio, like CRWD or KNW, but CNC is in the healthcare sector, which is different. However, the user's interest in Berkshire Hathaway might relate to their investment in healthcare stocks, so that's a point to touch on. The technical analysis from the references shows a MACD of -1.99, RSI at 11.1, KDJ at 30.39, and Bollinger Bands at 53.77. The RSI is extremely low, indicating oversold conditions, which might be a buying opportunity. The MACD is negative, suggesting a bearish trend, but the recent stock price drop could be a technical bounce point. The user uses technical analysis, so this part is crucial. The 120-day, 200-day, and 250-day moving averages are all above the current price, which is bearish. However, the 5-day, 10-day, and 20-day averages (from reference 37) are also above the current price, showing short-term resistance. The user's focus on technicals means I should highlight these indicators and their implications. The user's investment style includes a preference for blue-chip stocks with low risk tolerance. CNC is a Fortune 500 company, so it fits the blue-chip criteria. However, the recent withdrawal of guidance and stock price volatility might concern a low-risk investor. The dividend yield is zero, which is a red flag for income-focused investors. The user's profile doesn't mention dividends, but it's worth noting since CNC doesn't pay dividends, which might not align with their interests if they seek income. Analyst ratings and price targets vary widely. The average target is around $74, with some as high as $84 and others as low as $47. The recent downgrades from JPMorgan and others to Neutral or Hold reflect the uncertainty. The user follows news-driven strategies, so the recent downgrade and guidance withdrawal are critical points. The stock is trading near its 52-week low, which could be a buying opportunity if the user believes in a turnaround, but the fundamentals are shaky right now. The user's sectors of interest include fintech and software outsourcing, but CNC is in healthcare. However, the user's interest in Berkshire Hathaway might mean they're open to healthcare stocks if they fit the value criteria. The user's focus on megacaps and all-time highs doesn't fit CNC, which is currently undervalued with a P/E ratio of 8.46. This could be a contrarian play, but the risks are high given the recent challenges. In conclusion, CNC presents a mix of potential value and significant risks. The user's long-term horizon might allow for holding through the volatility, but the lack of dividends and recent financial setbacks could be drawbacks. The technicals suggest oversold conditions, which might appeal to the user's technical analysis approach. However, the fundamental issues in the Marketplace and Medicaid segments need to be carefully weighed against the potential upside from analyst targets and the company's market position. ``` ### Comprehensive Analysis of Centene Corporation (CNC) 📊 #### **Key Takeaways** 🎯 1. **Financial Health**: CNC faces significant headwinds due to a $1.8B reduction in risk adjustment revenue, impacting 2025 EPS by $2.75 . 2. **Market Sentiment**: Stock price plummeted 38.39% to $34.9, hitting a 52-week low . 3. **Analyst Outlook**: Mixed ratings with a **$74.32 average price target** (range: $61–$84) . 4. **Technicals**: Oversold (RSI=11.1), bearish MACD (-1.99), and below key moving averages . --- ### **1. Financial Performance** 📊 | Metric | Q1 2025 (MRQ) | YoY Growth | 3-Year CAGR | |--------------------------|----------------------|-------------|-------------| | **Revenue** | $46.62B | +15.38% | +6.21% | | **Net Income** | $1.31B | +13.47% | +65.54% | | **Diluted EPS** | $2.63 | +21.76% | +74.59% | **Analysis**: - **Revenue Growth**: Steady but slowing (3-year CAGR=6.21%). - **Profitability**: Net income and EPS show **accelerating growth** (3-year CAGRs=65.54% & 74.59%). - **Risks**: Withdrawal of 2025 guidance due to $1.8B risk adjustment shortfall . --- ### **2. Market Position & Risks** 🛡️ | Segment | Key Challenges | Recent Data | |------------------------|----------------|--------------| | **Marketplace** | Lower enrollment, higher morbidity | $1.8B revenue reduction | | **Medicaid** | Rising costs (behavioral health, drugs) | Q2 HBR > Q1 | | **Medicare** | Outperforming expectations | Positive cost leverage | **Analysis**: - **Marketplace**: Core business under pressure; 72% of membership impacted . - **Medicaid**: Cost inflation threatens margins, especially in NY & FL . - **Medicare**: Bright spot with better-than-expected performance . --- ### **3. Technicals & Valuation** 📉 | Metric | Current (2025-07-02) | Implications | |--------------------------|------------------------|--------------| | **Price** | $34.9 (-38.39% YTD) | Oversold (RSI=11.1) | | **Moving Averages** | Below 5-day (50.64), 10-day (52.37), 20-day (53.77) | Bearish short-term | | **Bollinger Bands** | 53.77 (upper), 33.77 (lower) | Near lower band (oversold) | | **P/E Ratio** | 8.46x | Undervalued vs. peers | **Analysis**: - **Oversold Signal**: RSI=11.1 (extremely low) . - **Valuation**: P/E=8.46x vs. sector average (~15x) . - **Risk**: High volatility (52-week low) . --- ### **4. Analyst Consensus** 📊 | Metric | Data (2025-07-02) | |--------------------------|--------------------| | **Price Target** | Avg: $74.32 (Upside: +132%) | | **Rating** | Mixed (Buy/Neutral/Hold) | | **Key Concerns** | Marketplace risks, Medicaid costs | **Analysis**: - **Bull Case**: Potential upside to $84 . - **Bear Case**: Risks of further guidance cuts . --- ### **5. Conclusion** 🚨 **Final Verdict**: **Hold with Caution**. - **Why?** CNC is undervalued (P/E=8.46x) but faces significant execution risks in its Marketplace and Medicaid segments . - **For Investors**: Suitable for **long-term, risk-tolerant** portfolios with a focus on **value stocks** . **Key Takeaway**: CNC’s recent challenges (guidance withdrawal, stock crash) present a **high-risk, high-reward opportunity** for contrarian investors. |code|Ticker|Name|Date|Net Income YoY|Total Revenue YoY|Diluted EPS YoY|market_code| |---|---|---|---|---|---|---|---| |CNC|CNC.N|Centene|2024 Q2|8.625592417061611|5.924271431610296|12.50000000000001|169| |CNC|CNC.N|Centene|2024 Q3|49.473684210526315|10.464749487408653|56.32183908045978|169| |CNC|CNC.N|Centene|2024 Q4|617.948717948718|3.4085149518499747|600|169| |CNC|CNC.N|Centene|2025 Q1|13.471502590673575|15.3760487044324|21.75925925925925|169| |code|Ticker|Name|Date|Total Revenue YoY|Total Revenue|market_code| |---|---|---|---|---|---|---| |CNC|CNC.N|Centene|2024 Q2|5.924271431610296|3.9836E10|169| |CNC|CNC.N|Centene|2024 Q3|10.464749487408653|4.2023E10|169| |CNC|CNC.N|Centene|2024 Q4|3.4085149518499747|4.0805E10|169| |CNC|CNC.N|Centene|2025 Q1|15.3760487044324|4.662E10|169| |code|Ticker|Name|Date|Net Income YoY|Net Income|market_code| |---|---|---|---|---|---|---| |CNC|CNC.N|Centene|2024 Q2|8.625592417061611|1.146E9|169| |CNC|CNC.N|Centene|2024 Q3|49.473684210526315|7.1E8|169| |CNC|CNC.N|Centene|2024 Q4|617.948717948718|2.8E8|169| |CNC|CNC.N|Centene|2025 Q1|13.471502590673575|1.314E9|169| |code|Ticker|Name|Date|Diluted EPS YoY|Diluted EPS|market_code| |---|---|---|---|---|---|---| |CNC|CNC.N|Centene|2024 Q2|12.50000000000001|2.16|169| |CNC|CNC.N|Centene|2024 Q3|56.32183908045978|1.36|169| |CNC|CNC.N|Centene|2024 Q4|600|0.56|169| |CNC|CNC.N|Centene|2025 Q1|21.75925925925925|2.63|169|