Assessing Centene (CNC) Valuation After Raised 2026 Guidance And Strong First Quarter Momentum

Centene (CNC) is back in focus after first quarter 2026 earnings, as the company paired higher revenue and net income with margin improvement in Medicaid and raised full year revenue and earnings guidance.

See our latest analysis for Centene.

The strong first quarter and raised 2026 guidance have come alongside a sharp shift in sentiment, with a 51.4% 1 month share price return and 42.9% 3 month share price return contrasting with a 1 year total shareholder return of 11.9% decline. This suggests momentum has recently picked up after a weak multi year experience.

If Centene’s recent move has you thinking about where else earnings upgrades might be surfacing in healthcare, this could be a useful moment to look at 35 healthcare AI stocks

With Centene trading near analyst price targets, yet carrying a high intrinsic discount score and a mixed long term return record, should you interpret recent earnings momentum as a fresh opportunity, or as a sign that the market already anticipates future growth?

Preferred Price-to-Sales of 0.2x: Is it justified?

On a P/S basis, Centene looks inexpensive, with the stock trading on 0.2x sales compared with both peers and the broader US Healthcare sector. That gap sits alongside a last close price of $54.98 and a company value score of 5 out of 6.

The P/S ratio compares the company’s market value with its annual revenue. For a large managed care business like Centene, where earnings can be volatile and currently sit in loss territory, revenue based measures often give investors an anchor that is less affected by short term profit swings.

Here, the story is that Centene is trading at 0.2x sales while the peer group average is 1.6x and the US Healthcare industry average is 1.2x. The estimated fair P/S ratio from regression analysis is 0.8x, so present pricing implies a level of pessimism versus both peers and that fair ratio level the market could move toward if sentiment improves or forecasts are met.

Explore the SWS fair ratio for Centene

Result: Price-to-sales of 0.2x (UNDERVALUED)

However, there are clear risks, including Centene’s recent net income loss of US$6.4b and a mixed 3 to 5 year total shareholder return record.

Find out about the key risks to this Centene narrative.

Another View: What Does The SWS DCF Model Say?

While the low 0.2x P/S ratio points to a cheap stock, the SWS DCF model goes even further, with an estimated future cash flow value of $197.69 versus the current $54.98 share price. That wide gap also signals undervaluation, but it raises a key question: how confident are you in the cash flow assumptions behind it?

Look into how the SWS DCF model arrives at its fair value.

Simply Wall St performs a discounted cash flow (DCF) on every stock in the world every day (check out Centene for example). We show the entire calculation in full. You can track the result in your watchlist or portfolio and be alerted when this changes, or use our stock screener to discover 51 high quality undervalued stocks. If you save a screener we even alert you when new companies match - so you never miss a potential opportunity.

Next Steps

If this combination of low multiples and high implied value has you interested, do not wait. Pull up the full data set and assess the 3 key rewards

Looking for more investment ideas?

If Centene has sparked your interest, this is the moment to widen your search and line up a few more candidates that fit your style before the crowd arrives.

• Target dependable income by reviewing companies in the 12 dividend fortresses and see which yields line up with your cash flow goals.
• Spot potential value opportunities early by scanning the 51 high quality undervalued stocks and compare how their fundamentals stack up against Centene.
• Prioritize resilience by checking stocks in the 72 resilient stocks with low risk scores that may better match your comfort with volatility.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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