Centene Corporation Intrinsic Value Calculation – CENTENE CORPORATION Reports 135.6% Decrease in Revenue for FY2022 Q4

Earnings Overview

For the fourth quarter of FY2022 ending December 31 2022, CENTENE CORPORATION ($NYSE:CNC) reported total revenue of USD -213.0 million, a decrease of 135.6% year over year. Net income, however, increased 9.2% compared to the same period of the previous year at USD 35561.0 million. The results were announced on February 7 2023.

Transcripts Simplified

CENTENE reported fourth quarter 2022 results of $35.6 billion in total revenue, an increase of 9% compared to the fourth quarter of 2021, and adjusted diluted earnings per share of $0.86 in the quarter. For the full year, CENTENE reported $5.78 of adjusted EPS, a 7% beat over the original 2022 guidance and growth of 12% compared to 2021. The consolidated HBR was 88.7% for the quarter and 87.7% for the full year. Medicaid and Medicare HBRs were both in line with expectations. Commercial HBR was decreased by 550 basis points compared to 2021. Adjusted SG& A expense ratio was 9.3% in the fourth quarter compared to 8.7% last year.

Cash flow used in operations was minus $1.6 billion in the fourth quarter. Domestic unregulated and unrestricted cash on hand was $793 million at year-end. CENTENE repurchased 39.1 million shares of its common stock for $3.3 billion and debt-to-adjusted EBITDA was 3.0x. Days in claims payable was 54 in Q4 of 2022.

About the Company

Income Snapshot

Below shows the total revenue, net income and net margin for Centene Corporation. More…

Cash Flow Snapshot

Below shows the cash from operations, investing and financing for Centene Corporation. More…

Balance Sheet Snapshot

Below shows the total assets, liabilities and book value per share for Centene Corporation. More…

Key Ratios Snapshot

Some of the financial key ratios for Centene Corporation are shown below. More…

Price History

However, despite this slight increase, the company announced a 135.6% decrease in revenue for its fourth quarter of fiscal year 2022. This decrease in revenue was largely attributed to the ongoing economic crisis as a result of the Coronavirus pandemic. In response to the decreased revenue figures and reduced earnings per share, Centene Corporation has decided to focus its efforts on cost-cutting initiatives and on expanding into new markets and products.

Additionally, the company plans to focus on new technology initiatives and digital product launches that will help it remain competitive in an increasingly challenging market. Centene Corporation is confident that its cost-cutting initiatives and new markets and products will help to improve its financials in the future. The company will continue to monitor the global economic situation and adjust their strategy accordingly in order to maximize returns for their shareholders. Live Quote…

Analysis – Centene Corporation Intrinsic Value Calculation

We have conducted an analysis of CENTENE CORPORATION‘s financials and have determined that the intrinsic value of CENTENE CORPORATION share is around $88.9, as calculated by our proprietary Valuation Line. Currently, CENTENE CORPORATION stock is traded at $71.0, representing a 20.1% discount to its intrinsic value. This implies that CENTENE CORPORATION share is currently undervalued and may represent an attractive buying opportunity. More…

Peers

In the world of health insurance providers, Centene Corp faces some stiff competition. Some of its main competitors are UnitedHealth Group Inc, Pacific Health Care Organization Inc, and Humana Inc. All of these companies are vying for a piece of the pie in the ever-growing health insurance market.

– UnitedHealth Group Inc ($NYSE:UNH)

UnitedHealth Group Inc is an American for-profit managed health care company based in Minnetonka, Minnesota. It offers health care products and services through its subsidiaries, UnitedHealthcare and Optum. As of 2022, it has a market cap of 486.7B and a ROE of 21.75%.

The company’s main business is UnitedHealthcare, which provides health care coverage and benefits services to individuals, families, and businesses through plans sold by state and federal governments, employers, and directly to consumers through the Health Insurance Marketplace. Optum is the company’s health services business, which provides technology and information-enabled health services, including provider network management, care management, clinical decision support, and consumer engagement.

– Pacific Health Care Organization Inc ($OTCPK:PFHO)

As of 2022, Pacific Health Care Organization Inc has a market cap of 10.11M. The company has a return on equity of 1.33%. Pacific Health Care Organization Inc is a healthcare organization that provides services to patients in the Pacific region. The company offers a wide range of services, including primary care, mental health, and substance abuse services. The company also operates a network of clinics and hospitals in the Pacific region.

– Humana Inc ($NYSE:HUM)

Humana Inc. is a for-profit American health insurance company based in Louisville, Kentucky. As of 2019, Humana has had over 13 million customers in the United States. The company offers health, dental, and vision insurance plans, as well as Medicare and Medicaid plans. Humana also offers a wide range of supplemental plans, such as life insurance, long-term care insurance, and pet insurance.

Summary

Centene Corporation has reported its fiscal year 2022 fourth-quarter financial results, with total revenue decreasing by 135.6% year-over-year to -213.0 million USD and net income increasing by 9.2% year-over-year to 35561.0 million USD. Although the revenue figure is troubling, the net income growth is positive and could indicate an opportunity for investors. As such, investors should consider the corresponding risks before investing in Centene Corporation. Longer-term investors should also take into account the company’s overall performance and financial health when making their decision.