CNC US S&P 500Russell 1000 Earnings call · transcribed from the recording
Centene Corporation (CNC) · Q3 2026 results and valuation
Share price: $70.48 · 2026-11-11
Centene Corporation provides managed healthcare products and services, including Medicaid, Medicare, and commercial health plans. The company serves underserved populations, individuals, and families across the United States. Its operations include pharmacy services, vision and dental care, and clinical healthcare. Source: 10-K annual report (2026-02-17)
Results Q3 2026 vs Q2 2026 · previous quarter · published 27 Oct 2026 and 28 Jul 2026
Net income turned to a loss from a profit last quarter. Management sounded about as positive as a typical company call, in its script and in answers to analysts.
1 · Numbers
Turned loss
Net income vs Q2 2026
Outlook given
Net income -71.0M vs 1.09B
Revenue −5.5%
Why Against the same quarter last year (loss narrowed), net income increased because the exclusion of $480 million in workforce and enterprise optimization costs from the prior year and favorable medical cost experience in Medicare Advantage drove the result.
2 · How management spoke
Typical
Less upbeat than 61% of company calls
Answers to analysts: restrained, in line with the script.
Similar to last call.
3 · What stood out
Centene Corporation is on track to achieve break-even financial results in 2026, which is one year ahead of previous expectations.
Valuation
Is Centene Corporation undervalued?
Reverse DCF. Free cash flow from the last full fiscal year (2025-12-31), grown for 10 years, discounted back, plus a terminal value. “Implied growth” is the rate the current price assumes.
At 10.5% growth a year (3-year revenue growth), the model's fair value is $236.20 a share — the stock trades 70% below it. Today's price assumes −10.6% growth a year.
Current price
$70.48
close of 2026-11-11
Market implies growth of iThe yearly free-cash-flow growth, for the next 10 years, that today’s share price already assumes. If you believe the company grows faster than this, the stock is cheap under this model; slower, and it is expensive.
-10.6% for 10 yrs
Fair value / share
$236.20
Buy below
$177.15
Price vs fair value
Undervalued 70%
Price vs buy-below price
Undervalued 60%
Management expects
Growth +5% · from the Q3 2026 report: “The company forecasted its pre-tax margin to increase from -1% last year to 5% this year.”
A guidance figure for growth, usually one year ahead, not a 10-year free-cash-flow rate.
Read between the lines
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Guidance
The company raised its full year adjusted EPS guidance to greater than five dollars and 20 cents per diluted share because performance was better than expectations.
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Figure
Centene believes the appropriate jump-off point upon which to apply 2027 tailwinds and headwinds is approximately $4.70 of adjusted EPS.
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Guidance
The company now expects Marketplace to produce a full-year pre-tax margin at the top of the 4.5% to 5% range due to the strength of the underlying business.
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Key theme
Execution against the turnaround plan put the company on track to achieve break-even financial results in 2026, which is one year ahead of previous expectations.
Source quote
“As a result of strong execution against our turnaround plan, we are now on track to achieve break-even financial results in 2026, a year ahead of expectations.”
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Guidance
The company raised its PDP pre-tax margin forecast from greater than 3% in July to the mid to high threes based on year-to-date results.
4 more
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Key theme
The company expects the observed acuity shift in 2026 to continue into Q4 as a pull forward of shifts that would have occurred due to work requirements.
Source quote
“I do think, as we've looked at it, that the acuity shifting largely that we've seen in 26 so far and expect to continue into Q4 is really a pull forward of acuity shift that would have otherwise happened as a function of work requirements.”
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Guidance
Management does not expect a significant impact from the 11-15 waivers.
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Guidance
The company forecasted its pre-tax margin to increase from -1% last year to 5% this year.
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Guidance
The Medicaid HBR improved by 30 basis points to 93.6 in Q3 2026, keeping pace with the trajectory to achieve a full-year Medicaid HBR of 93.5.
Tone
How upbeat the language was, compared with other companiesiTone counts positive minus negative finance words, adjusted for length. Executives mostly speak positively, so the labels compare each call with every company's latest call: “typical” is the middle third, “very upbeat” the top tenth, “cautious” the bottom tenth.. Dot: Q3 2026. Ring: Q2 2026.
Script and answers carried a similar tone, so the script's message held up under questioning.
Sentences that drove the tone
“As we remain focused on disciplined execution to finish the year strong, we are excited excited to carry the positive momentum we are producing across our businesses into 2027.”
“Over the last two quarters, we've completed analyses of these member cohorts and saw that members with higher healthy food benefits had almost $200 per member per month in lower...”
“You have worked tirelessly over the last year to prove how strong and resilient this company is, and in doing so, you made sure we never lost sight of our...”
Full figures
USD · SEC EDGAR XBRL (10-Q, period end 2026-09-30)
| Metric | Q3 2026period end 2026-09-30 | Q2 2026period end 2026-06-30 | Change | Q3 2025 | YoY |
|---|---|---|---|---|---|
| Revenue | 50.65B | 53.58B | −5.5% | 49.69B | +1.9% |
| Gross profit | 3.30B | 4.62B | −28.5% | 3.35B | −1.3% |
| Operating income | -307.0M | 1.20B | Turned loss | -6.95B | Loss narrowed |
| Net income | -71.0M | 1.09B | Turned loss | -6.63B | Loss narrowed |
| EPS | -0.14 | 2.19 | Turned loss | -13.50 | Loss narrowed |
| P/E today 24.0 | 21.3 | 12-mo loss | — | 12-mo loss | — |
Topics
Most discussed now
- That's, again, consistent with the acuity shifts that Centene has been seeing.
- Because a lot of the work the states have done to prepare for the process has required them to go...
Faded since Q2 2026
- Fading As Centene looks at core medical cost drivers in the quarter, the big rocks remained consistent with past quarters, with...
- Fading Centene saw a slight uptick acuity in Q2 around that attrition.
- Fading States starting to tighten those criteria and starting to prepare and sort of categorize populations and, in some ways, I...
Latest announcements
Official filings, newest first. Summaries are generated from each filing and its attachment; every figure is checked against the source.
- Results of operations · SEC 8-K
Centene Corporation reported third-quarter premium and service revenues of $45.1 billion, an increase of 0.5% compared to $44.9 billion in the same period of 2025.
- Other events · SEC 8-K
Centene Corporation issued a notice to redeem all remaining $568,664,000 of its outstanding 4.25% Notes due December 15, 2027, on October 23, 2026.
- Regulation FD disclosure · SEC 8-K
The filing is a Regulation FD disclosure containing forward-looking statements regarding Centene Corporation's 2026 full year guidance and future operating performance.
- Director or officer change; Regulation FD disclosure · SEC 8-K
Centene Corporation announced that Drew Asher will step down as CFO in December 2026, with Chris Neczypor named as successor effective January 1, 2027.
- Other events · SEC 8-K
Centene Corporation issued a notice to redeem $500,000,000 of its outstanding 4.25% Notes due December 15, 2027, on August 13, 2026.
- Results of operations; Director or officer change; Regulation FD disclosure · SEC 8-K
- Director or officer change; Regulation FD disclosure · SEC 8-K
Centene Corporation appointed Lauren M. Tyler to its Board of Directors, effective June 19, 2026, where she will serve on the Audit and Compensation and Talent Committees.
- Director or officer change; Shareholder vote results · SEC 8-K
Centene Corporation held its Annual Meeting on May 12, 2026, where shareholders voted on the election of nine directors with 412,968,059 shares of common stock represented.
Catalyst calendar
management-stated targets — from the latest earnings call; plans, not promises.
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2026
adjusted diluted earnings per share
Source quote
“We now expect 2026 adjusted diluted earnings per share of greater than $5.20.”
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year-end 2026
membership attrition
Source quote
“We continue to expect an incremental step down in Q4, in line with our previous view that year-end 2026 membership would reflect attrition of roughly 8 to 9 percent compared to year-end 2025.”
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2026
break-even financial results in Medicare Advantage
Source quote
“As a result of strong execution against our turnaround plan, we are now on track to achieve break-even financial results in 2026, a year ahead of expectations.”
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2027
Medicare Advantage membership expected to be down year over year
Source quote
“We expect Medicare Advantage membership to be down year over year in 2027 as we construct a footprint that will allow us to advance margin expansion in 2027 and beyond while delivering high-quality service and benefits to our members.”
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2026
Marketplace product margin restoration
Source quote
“Finally, our Marketplace team continues to deliver, positioning the product for meaningful year-over-year margin restoration in 2026.”