CNC

Based on the provided data, here is a comprehensive analysis of CNC.

Technical Analysis CNC exhibits exceptionally strong momentum, significantly outperforming the market over the past one and three months. The stock is in a steady uptrend, trading comfortably above key moving averages without appearing overbought. Its position in the middle of its 52-week range suggests there is potential room for further growth.

Fundamental Analysis The fundamentals reveal severe challenges. While revenue is stable, the company has swung to a substantial operating loss, with key profitability and operational efficiency metrics deeply negative. This indicates significant value destruction. Although the balance sheet shows moderate leverage, negative interest coverage and weak cash flow generation point to underlying operational distress.

Valuation and Risk Valuation metrics based on book value and sales suggest CNC is deeply undervalued, but this is overshadowed by negative forward-looking earnings multiples. The stock's low beta offers some defensive characteristic against market volatility, but the massive -61.74% maximum drawdown in the past year underscores its potential for severe downside risk, particularly from operational or regulatory headwinds.

Buy Recommendation

While the technical momentum is compelling and the stock appears cheap on certain valuation metrics, these positives are substantially outweighed by critically weak fundamentals. The severe profitability collapse and negative returns indicate deep operational issues that momentum alone may not sustain. Given the high fundamental risk and history of significant price declines, CNC is not a recommended buy for risk-averse investors at this time. A recovery is highly dependent on a successful turnaround of its core profitability.

*Note: This is not investment advice, for reference only.*

RockFlow Model Forecast: Three Scenarios for 2026

Based on the comprehensive analysis provided, here is a 12-month outlook for CNC (Centene Corp.):

Over the next 12 months, the outlook for CNC is highly uncertain and contingent on a successful operational turnaround. The primary positive catalyst would be a meaningful improvement in profitability metrics, reversing the current trend of substantial operating losses and value destruction. Conversely, the key risks are deeply entrenched, centered on the persistence of its severe fundamental challenges, weak cash flow, and the potential for further significant price declines, as evidenced by its history of a -61.74% drawdown. Given the lack of an analyst target price and the overshadowing of its apparent undervaluation by negative earnings, a definitive target range is difficult to establish; the stock's path will be binary, driven entirely by evidence of a fundamental recovery or further deterioration.

Wall Street Consensus

Most Wall Street analysts are optimistic about CNC's 12-month outlook, with consensus target around $46.17, indicating expected upside potential.

Overall, CNC has investment potential but also faces challenges. Here are key factors to weigh before investing.

CNC has delivered exceptional momentum across all timeframes, significantly outperforming market benchmarks. The stock maintains a powerful uptrend characterized by consistent multi-month gains.

Over the past three months, CNC has surged 20.96%, dramatically exceeding the broader market's performance by 17.59 percentage points of relative strength. This remarkable short-term momentum builds upon equally impressive one-month gains of 13.1%, reflecting sustained bullish investor momentum despite the stock's relatively low beta of 0.48 indicating below-average volatility.

Currently trading near $45.76, CNC positions itself approximately in the middle of its 52-week range between $25.08 and $66.81, presenting neither overbought nor oversold technical conditions. While shares trade comfortably above key moving averages, the steady uptrend momentum persists without entering extreme overbought zones, this underlying condition appears stable enough considering current positioning versus long-term averages.

Revenue & Profitability CNC demonstrates concerning profitability trends despite modest revenue growth from $48.7B to $49.7B quarter-over-quarter. The company swung to a significant operating loss of -$6.95B in Q3 2025, with gross margins deteriorating from 6.0% to 16.4% while operating margins plummeted from -0.9% to -14.0%. This profitability collapse resulted in a net income ratio of -13.3%, indicating substantial operational challenges.

Financial Health The company maintains moderate leverage with a debt ratio of 21.4% and debt-to-equity of 0.84, though interest coverage turned deeply negative at -40.9x. Cash flow coverage ratios appear weak at 0.08, suggesting potential liquidity strain despite a current ratio of 1.08. The cash ratio of 0.42 indicates adequate immediate liquidity, but operating cash flow generation relative to sales is minimal at 2.7%.

Operational Efficiency CNC exhibits severe operational inefficiency with a return on equity of -31.7% and return on assets of -8.1%. Asset turnover of 0.61 suggests modest utilization of the asset base, while the negative return on capital employed of -16.8% indicates value destruction. The company's equity multiplier of 3.92 shows reasonable financial leverage, but operational metrics reflect fundamental performance challenges.

Valuation Level: CNC appears undervalued based on traditional valuation metrics. A PE ratio of 11.15 is inexpensive, though the negative forward PE and EV/EBITDA ratios indicate potential bottom-line losses that merit caution. The company trades below both its book value (PB 0.83) and at a minimal revenue multiple (PS 0.13), suggesting the market prices it at a significant discount to its asset and sales base.

Comparative Analysis: Without industry average data, a comprehensive peer comparison cannot be made. The metrics imply the company may be struggling with profitability or growth, as evidenced by the negative forward-looking multiples. This profile would warrant a deeper qualitative investigation into the company's specific business model and recent financial performance versus its peers.

Based on a Beta of 0.48, CNC exhibits low volatility risk relative to the broader market. This suggests the stock is less sensitive to market swings and could be considered a more defensive holding. However, the significant maximum drawdown of -61.74% over the past year highlights a substantial historical decline, indicating that while the stock may be less volatile on a daily basis, it has experienced severe price depreciation during a specific period. This drawdown represents a considerable loss of capital for investors who held the stock during that downturn.

The absence of notable short interest suggests that there is not a significant portion of the market actively betting on the stock's price to decline, which can be viewed as a positive sentiment indicator. However, this does not preclude stock-specific risks such as changes in government healthcare reimbursement rates, which are critical for CNC's operations as a managed care provider. Execution risk on growth strategy and potential for increased medical costs or regulatory changes remain key concerns that could impact future performance.