Value
7.0/10data confidence 83%| Component | Sub-score |
|---|---|
| P/S | 10.0 |
| EV/EBITDA | 6.9 |
| Fwd P/E | 8.3 |
| PEG | 5.9 |
| Analyst target | 4.0 |
- ▸Forward P/E: 14.2x
- ▸PEG: 1.27
- ▸Attractively valued
CNC · Why this verdict
Why Centene (CNC) is rated SELL
Updated
Model-generated analysis — not investment advice. Not a registered investment advisor. Past performance does not guarantee future results.
Show full disclosure ▾Hide full disclosure ▴
About TrendMatrix. TrendMatrix is a publisher of general securities research and market commentary. We publish on a regular schedule. All content is the same for every subscriber in a tier — we do not provide personalized investment advice and we do not take into account any individual subscriber's financial situation, investment objectives, risk tolerance, tax situation, or holdings.
Not investment advice. TrendMatrix is not a registered investment adviser. Our content is for informational and educational purposes only. Consult your own licensed investment adviser, broker, or tax professional before making any investment decision.
Conflicts and positions. The TrendMatrix editorial team frequently holds personal long-term positions in securities discussed. We disclose positions held at the time of publication on each piece. We maintain a trading-window policy: we do not initiate or close positions in the same direction as a TrendMatrix publication within 24 hours before or 72 hours after publication.
No paid promotion. TrendMatrix does not accept payment from any issuer, broker, or third party in exchange for coverage of any security. Our sole compensation is subscription revenue.
No fiduciary duty. No fiduciary, advisory, or agency relationship is created between you and TrendMatrix by reading our content or subscribing to our service.
Performance. Past performance is not indicative of future results. Performance figures reflect the published model only and do not reflect any individual subscriber's actual results.
VerdictSELL
Overall score5.2/10
ConfidenceMEDIUM
MacroNEUTRAL
TrendMatrix Research · core thesis
Engine thesis — one sentence
Centene's business quality sits below the minimum investment threshold with no identified competitive advantage and deteriorating momentum, while a 57% revenue concentration in Medicaid creates meaningful policy risk; three consecutive earnings beats—including an extraordinary positive surprise—provide the only near-term constructive signal but are insufficient to offset the structural quality deficit.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
Business quality scores at 2.3 against a 4.0 minimum floor, with no identified competitive advantage and quality concerns flagged across multiple dimensions, indicating the company lacks a durable margin of safety at current prices. Quality breakdown | Quality score rises above 4.0 over the next two reporting periods, driven by improved margins, cash conversion, or competitive-position recognition. | →Stable |
| CounterA low quality score in managed care may partly reflect the sector's inherently thin margins and high pass-through revenue structure; if medical-loss ratios normalize and cash conversion improves, the score could recover faster than the current profile implies. | ||
A single government program accounts for 57% of product revenue, creating concentrated exposure to federal and state Medicaid policy decisions that can shift unpredictably and materially impair earnings. Bear case | Medicaid segment share of total revenue falls below 50% over the next 12 months, indicating meaningful diversification progress. | ↓Deteriorating |
| CounterHeavy Medicaid concentration also implies long-term enrollment growth tailwinds and managed-care penetration in government programs; a concentrated position in a growing segment need not be inherently harmful if pricing and rates remain constructive. | ||
After a significant miss at the oldest reported period, the company has delivered three consecutive beats—including extremely large positive surprises—suggesting management has re-established guidance discipline and the business is executing ahead of depressed expectations. Earnings | A fourth consecutive quarterly beat with earnings surprise staying above 5% in the next reporting period. | →Stable |
| CounterThe massive positive surprises likely reflect unusually depressed consensus estimates following the prior significant miss; as estimate revisions catch up to reality, maintaining large positive surprises will become structurally more difficult. | ||
Momentum has failed to clear its minimum gate—scoring 4.1 against a 4.5 requirement—while on-balance volume is in a distribution phase, indicating institutional selling pressure that has not yet shown up fully in price. Momentum breakdown | Momentum score rises above 4.5 and on-balance volume reverses to accumulation for 8 or more consecutive trading sessions. | ↓Deteriorating |
| CounterThe stock remains above its 200-day moving average, meaning the longer-term trend is intact; the falling volume signal may reflect temporary position reduction rather than a structural shift in investor conviction. | ||
Business quality scores at 2.3 against a 4.0 minimum floor, with no identified competitive advantage and quality concerns flagged across multiple dimensions, indicating the company lacks a durable margin of safety at current prices.
→StableQuality breakdown
- Expectation
- Quality score rises above 4.0 over the next two reporting periods, driven by improved margins, cash conversion, or competitive-position recognition.
CounterA low quality score in managed care may partly reflect the sector's inherently thin margins and high pass-through revenue structure; if medical-loss ratios normalize and cash conversion improves, the score could recover faster than the current profile implies.
A single government program accounts for 57% of product revenue, creating concentrated exposure to federal and state Medicaid policy decisions that can shift unpredictably and materially impair earnings.
↓DeterioratingBear case
- Expectation
- Medicaid segment share of total revenue falls below 50% over the next 12 months, indicating meaningful diversification progress.
CounterHeavy Medicaid concentration also implies long-term enrollment growth tailwinds and managed-care penetration in government programs; a concentrated position in a growing segment need not be inherently harmful if pricing and rates remain constructive.
After a significant miss at the oldest reported period, the company has delivered three consecutive beats—including extremely large positive surprises—suggesting management has re-established guidance discipline and the business is executing ahead of depressed expectations.
→StableEarnings
- Expectation
- A fourth consecutive quarterly beat with earnings surprise staying above 5% in the next reporting period.
CounterThe massive positive surprises likely reflect unusually depressed consensus estimates following the prior significant miss; as estimate revisions catch up to reality, maintaining large positive surprises will become structurally more difficult.
Momentum has failed to clear its minimum gate—scoring 4.1 against a 4.5 requirement—while on-balance volume is in a distribution phase, indicating institutional selling pressure that has not yet shown up fully in price.
↓DeterioratingMomentum breakdown
- Expectation
- Momentum score rises above 4.5 and on-balance volume reverses to accumulation for 8 or more consecutive trading sessions.
CounterThe stock remains above its 200-day moving average, meaning the longer-term trend is intact; the falling volume signal may reflect temporary position reduction rather than a structural shift in investor conviction.
Per-dimension breakdown
Quality
2.3/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 0.0 |
| ROA | 0.8 |
| Gross margin | 0.0 |
| Op margin | 2.0 |
| Net margin | 0.0 |
| Current ratio | 4.4 |
| Moat | 4.4 |
| Piotroski F | 6.7 |
- ▸No competitive moat
- ▸Quality concerns
Growth
4.8/10data confidence 67%| Component | Sub-score |
|---|---|
| Rev growth | 3.8 |
| EPS growth | 5.7 |
Momentum
2.7/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 5.5 |
| MACD | 0.0 |
| OBV | 1.0 |
| MA position | 6.0 |
| Volume | 1.1 |
- ▸Volume distribution (falling OBV)
- ▸Above 200-day MA
Sentiment
6.0/10data confidence 100%| Component | Sub-score |
|---|---|
| LLM sentiment | 5.0 |
| Analyst rating | 7.4 |
| Price target | 5.4 |
Insider
7.3/10data confidence 75%| Component | Sub-score |
|---|---|
| materiality | 5.0 |
| holder change | 10.0 |
| notable moves | 7.0 |
- ▸Insider selling (low materiality) — $5,164,000 (0.016% of mkt cap)
- ▸Institutions accumulating
Peer rank
4.4/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 9.1 |
| quality rank | 0.0 |
| growth rank | 4.5 |
Technical
9.0/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 9.4 |
| support resistance | 9.2 |
| 52w position | 8.3 |
Risk (lower is worse)
5.6/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 8.2 |
| days to cover | 8.2 |
| volatility | 2.9 |
| put call | 5.4 |
| implied vol | 1.6 |
| beta | 6.7 |
| debt equity | 6.4 |
- ▸High IV: 70%
- ▸Concentration risks: 1 HIGH (10-K Item 1A — sized via position_sizing, validated via buy_confidence)
Catalyst
7.1/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 6.0 |
| earnings history | 6.7 |
| earnings timing | 5.0 |
| surprise avg | 10.0 |
| news activity | 8.0 |
- ▸Strong earnings: 3B/1M
- ▸Earnings in 4 days
How the verdict was assembled
Engine trigger
Quality below minimum threshold.
Engine technical detail
verdict_path:
L1:HARD_BLOCK:QUALITY_FLOORPassed (4)
- INSIDER:OK
- NEWS_EVENTS:NONE_RECENT
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (3)
- MOMENTUM:2.7<4.5
- ASYMMETRY:-1.0=NEGATIVE
- EARNINGS_PROXIMITY:4d<=7d
Warning (1)
- 8K_CSUITE_CHANGE:5.02 (officer departure/appointment)
Reward-to-Risk
-0.97
Upside
-7.5%
Downside
7.7%
Sizing output
AVOID
Setup— — No clear chart pattern; technical signals are mixed
EdgeNo clear edge — No clear edge identified
SuitabilityModerate — Balanced profile
Investment implication
The SELL_IF_HOLDING verdict reflects the MOMENTUM gate's 2.7<4.5 outcome against Technical at 9.0 and asymmetric R:R of -0.97.
The strongest dimensions are Technical at 9.0, Insider at 7.3, and Catalyst at 7.1; the weakest are Quality at 2.3, Momentum at 2.7, and Peer rank at 4.4. The V9 engine flagged 3 failed gates with 1 warning, producing an asymmetric reward-to-risk of -0.97 and an engine sizing output of AVOID.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1Quality Below Threshold No Moat
Trip ifQuality score rises above 4.0 for 2 consecutive reporting periods.
- P2Medicaid Concentration Policy Risk
Trip ifMedicaid segment share of total revenue falls below 50% for 2 consecutive annual filings.
- P3Recent Earnings Improvement Streak
Trip ifEPS surprise falls below 0% for 2 consecutive quarters, breaking the recent beat streak.
- P4Momentum Failure Distribution Signal
Trip ifMomentum score rises above 4.5 and on-balance volume turns to accumulation for more than 8 consecutive trading sessions.