Centene Corp (CNC, Financial) experienced a daily loss of 2.67%, and a 3-month gain of 1.25%. The company's Earnings Per Share (EPS) is 4.85. With these figures in mind, the question arises: Is the stock significantly undervalued? This article aims to provide a comprehensive valuation analysis to answer this question. Let's delve into the details of Centene (CNC)'s intrinsic value.
Company Introduction
Centene is a managed-care organization focusing on government-sponsored healthcare plans, including Medicaid, Medicare, and individual exchanges. The company served 23 million medical members as of September 2022, primarily in Medicaid (70% of membership), individual exchanges (9%), Medicare Advantage (7%), and the balance in Tricare (West region), correctional facility, and commercial plans. The company also caters to 4 million users through the Medicare Part D pharmaceutical program.
With a current stock price of $62.72, Centene Corp (CNC, Financial) appears to be significantly undervalued compared to its GF Value of $89.92. This discrepancy paves the way for a deeper exploration of the company's value, ingeniously integrating financial assessment with essential company details.
Understanding GF Value
The GF Value represents the current intrinsic value of a stock derived from our exclusive method. It is calculated based on historical multiples (PE Ratio, PS Ratio, PB Ratio and Price-to-Free-Cash-Flow) that the stock has traded at, GuruFocus adjustment factor based on the company's past returns and growth, and future estimates of the business performance.
Centene (CNC, Financial) appears to be significantly undervalued based on GuruFocus' valuation method. If the stock's share price is significantly above the GF Value Line, the stock may be overvalued and have poor future returns. Conversely, if the stock's share price is significantly below the GF Value Line, the stock may be undervalued and have high future returns. Given its current price of $62.72 per share and a market cap of $34 billion, Centene seems to be significantly undervalued.
Because Centene is significantly undervalued, the long-term return of its stock is likely to be much higher than its business growth.
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