Centene Corporation (NYSE:CNC) Poised For Near-Term Technical Upswing Despite Negative Margins

Centene presents contrasting signals: improving technical momentum suggests a near-term lift, while negative profitability metrics reinforce a valuation gap that investors must weigh.

Recent News

Feb. 17–18, 2026: Reports indicate Centene completed a divestiture of its remaining Magellan Health businesses and has continued contract starts for subsidiary-managed dual-eligible (FIDE SNP) plans in multiple states during January 2026; analysts issued fresh ratings and updated price targets through March 2026.

Technical Analysis

The ADX at 24.78 signals an emerging trend in price strength rather than a mature directional trend. DI+ sits at 22.75 and shows an increasing trajectory, while DI- at 28.95 has been decreasing; those DI movements together constitute a bullish directional shift in momentum.

MACD reads -1.01 and has been increasing, with the MACD line now above its signal line (-1.63). That cross above the signal line constitutes a bullish momentum confirmation for shorter-term price action.

MRO at -28.19 indicates the market price remains below the WMDST target, implying upside potential toward that target; the negative value suggests a higher probability of price convergence upward from current levels.

RSI stands at 46.99 and is rising, remaining below 50 but showing improving relative-strength conditions consistent with a short-term recovery rather than an overbought condition.

Price sits at $37.55 near the 200-day average of $36.58 and above the 20-day average of $34.19; the 12-day EMA shows a dip-and-reversal pattern while the 50-day average remains higher at $38.87. That combination places the stock in a consolidation band between immediate support and medium-term resistance levels.

Bollinger bands place the 1x lower band at $32.08 and the 1x upper band at $36.30; current price trading above the 1x upper band baseline indicates the recent move has exited the narrow consolidation band. The super trend lower at $34.06 provides a technical support reference below current price.

Volume at 3.66M trails 10- and 50-day averages, suggesting this momentum advance lacks broad intraday participation so far; lower-than-average volume tempers the strength of the technical breakout signal.

 


Fundamental Analysis

Profitability shows meaningful stress. EBIT registered at -$1,375,000,000, producing an EBIT margin of -2.765%. That margin sits well below the industry peer mean and median for EBIT margin and below the industry peer higher bound, indicating profitability lags typical managed-care peers. QoQ change in EBIT margin registers -78.875%, and YoY change reads -317.374%, reflecting sizable margin contraction over both intervals.

Net income equaled -$1,101,000,000 and operating income totaled -$1,232,000,000. EBITDA reached -$1,046,000,000. Earnings per share came in at -$1.19 versus an estimate of -$1.22, an EPS surprise of approximately 2.46% in the reported period; forward EPS stands at $1.019, which produces a forward P/E of 37.67 based on consensus forward earnings.

Liquidity and capital structure provide offsetting strengths. Cash and short-term investments total $20.32B against total debt of $18.162B, and cash alone equals $17.888B. The current ratio reads 1.10 and the cash ratio 0.554, showing available near-term liquidity. Debt-to-equity at 0.91 sits slightly below the industry peer mean and near the industry peer median, indicating leverage sits within a typical peer band.

Revenue dynamics remain muted: total revenue measured $49.725B with revenue growth essentially flat at 0.07% overall; revenue growth QoQ shows a sharp negative swing (-96.401%) and revenue growth YoY reads -102.415%, reflecting significant short-term timing or seasonal effects rather than sustained top-line expansion.

Cash generation shows positive signals: operating cash flow reached $437M with free cash flow of $224M and a free cash flow yield roughly 1.11%. Cash flow margin sits at 1.981% and the company increased cash during the period (cash flow delta $772M). Cost of debt remains low at ~0.961%, and interest expense totaled $168M, though interest coverage reads negative due to operating losses.

WMDST values the stock as under-valued based on the firm’s current mix of tangible liquidity, negative near-term profitability, and forward earnings expectations; that valuation assessment reflects available cash versus near-term operating losses and forward EPS projections.

MOST-RECENT QUARTERLY REPORT
REPORT PERIOD ENDING: 2025-12-31
REPORT DATE: 2026-02-06
NEXT REPORT DATE: 2026-05-08
CASH FLOW  Begin Period Cash Flow 17.2 B
 Operating Cash Flow 437.0 M
 Capital Expenditures -213.00 M
 Change In Working Capital 723.0 M
 Dividends Paid
 Cash Flow Delta 772.0 M
 End Period Cash Flow 18.0 B
 
INCOME STATEMENT REVENUE
 Total Revenue 49.7 B
 Forward Revenue -5.66 B
COSTS
 Cost Of Revenue 47.3 B
 Depreciation 160.0 M
 Depreciation and Amortization 329.0 M
 Research and Development
 Total Operating Expenses 51.0 B
PROFITABILITY
 Gross Profit 2.5 B
 EBITDA -1.05 B
 EBIT -1.38 B
 Operating Income -1.23 B
 Interest Income
 Interest Expense 168.0 M
 Net Interest Income -168.00 M
 Income Before Tax -1.54 B
 Tax Provision -443.00 M
 Tax Rate 28.71 %
 Net Income -1.10 B
 Net Income From Continuing Operations -1.10 B
EARNINGS
 EPS Estimate -1.22
 EPS Actual -1.19
 EPS Difference 0.03
 EPS Surprise 2.459 %
 Forward EPS 1.02
 
BALANCE SHEET ASSETS
 Total Assets 76.7 B
 Intangible Assets 15.4 B
 Net Tangible Assets 4.6 B
 Total Current Assets 40.4 B
 Cash and Short-Term Investments 20.3 B
 Cash 17.9 B
 Net Receivables 18.1 B
 Inventory
 Long-Term Investments 1.6 B
LIABILITIES
 Accounts Payable 13.6 B
 Short-Term Debt 50.0 M
 Total Current Liabilities 36.7 B
 Net Debt
 Total Debt 18.2 B
 Total Liabilities 56.7 B
EQUITY
 Total Equity 20.0 B
 Retained Earnings 8.7 B
VALUATION & PER-SHARE METRICS EQUITY & PER-SHARE METRICS
 Book Value Per-Share 40.57
 Shares Outstanding 491.757 M
 Revenue Per-Share 101.12
VALUATION
 Market Capitalization 20.3 B
 Enterprise Value 18.1 B
 Enterprise Multiple -17.31
Enterprise Multiple QoQ 588.607 %
Enterprise Multiple YoY -198.204 %
Enterprise Multiple IPRWA high: 169.984
median: 51.214
mean: 46.412
CNC: -17.31
low: -93.578
 EV/R 0.364
CAPITAL STRUCTURE
 Asset To Equity 3.846
 Asset To Liability 1.354
 Debt To Capital 0.477
 Debt To Assets 0.237
Debt To Assets QoQ 10.481 %
Debt To Assets YoY 17693.233 %
Debt To Assets IPRWA high: 0.927
mean: 0.353
median: 0.264
CNC: 0.237
low: 0.007
 Debt To Equity 0.91
Debt To Equity QoQ 8.445 %
Debt To Equity YoY 21728.297 %
Debt To Equity IPRWA high: 3.121
mean: 0.976
CNC: 0.91
median: 0.754
low: -1.835
PRICE-BASED VALUATION
 Price To Book (P/B) 1.016
Price To Book QoQ 23.642 %
Price To Book YoY -14.192 %
Price To Book IPRWA high: 9.281
mean: 2.163
median: 1.75
CNC: 1.016
low: -0.324
 Price To Earnings (P/E) -34.628
Price To Earnings QoQ -149.448 %
Price To Earnings YoY -143.95 %
Price To Earnings IPRWA high: 223.057
median: 71.489
mean: 61.092
CNC: -34.628
low: -73.764
 PE/G Ratio 0.102
 Price To Sales (P/S) 0.408
Price To Sales QoQ 17.685 %
Price To Sales YoY -46.8 %
Price To Sales IPRWA high: 14.8
mean: 2.598
median: 1.008
CNC: 0.408
low: 0.027
FORWARD MULTIPLES
Forward P/E 37.668
Forward PE/G -0.111
Forward P/S -3.535
EFFICIENCY OPERATIONAL
 Operating Leverage -1119.575
ASSET & SALES
 Asset Turnover Ratio 0.626
Asset Turnover Ratio QoQ 6.149 %
Asset Turnover Ratio YoY 26.435 %
Asset Turnover Ratio IPRWA high: 1.261
CNC: 0.626
mean: 0.544
median: 0.415
low: 0.013
 Receivables Turnover 2.413
Receivables Turnover Ratio QoQ 8.44 %
Receivables Turnover Ratio YoY 12.339 %
Receivables Turnover Ratio IPRWA high: 6.521
median: 3.758
mean: 3.62
CNC: 2.413
low: 0.053
 Inventory Turnover
Inventory Turnover Ratio QoQ
Inventory Turnover Ratio YoY
Inventory Turnover Ratio IPRWA
 Days Sales Outstanding (DSO) 37.816
CASH CYCLE
 Cash Conversion Cycle Days (CCC)
Cash Conversion Cycle Days QoQ
Cash Conversion Cycle Days YoY
Cash Conversion Cycle Days IPRWA high: 33.528
CNC: 0
mean: -1.551
median: -7.057
low: -17.884
CAPITAL DEPLOYMENT
 Cash Conversion Ratio 13.534
 CapEx To Revenue -0.004
 CapEx To Depreciation -1.331
 
CAPITAL, LIQUIDITY & COVERAGE CAPITAL STRUCTURE
 Total Capital 37.3 B
 Net Invested Capital 37.4 B
 Invested Capital 37.4 B
 Net Tangible Assets 4.6 B
 Net Working Capital 3.7 B
LIQUIDITY
 Cash Ratio 0.554
 Current Ratio 1.1
Current Ratio QoQ 1.443 %
Current Ratio YoY -0.81 %
Current Ratio IPRWA high: 2.726
CNC: 1.1
mean: 1.075
median: 0.965
low: 0.244
 Quick Ratio
Quick Ratio QoQ
Quick Ratio YoY
Quick Ratio IPRWA
COVERAGE & LEVERAGE
 Debt To EBITDA -17.363
 Cost Of Debt 0.961 %
 Interest Coverage Ratio -8.185
Interest Coverage Ratio QoQ -78.607 %
Interest Coverage Ratio YoY -371.241 %
Interest Coverage Ratio IPRWA high: 26.873
mean: 7.588
median: 5.671
CNC: -8.185
low: -9.664
 Operating Cash Flow Ratio 0.027
TIMING / LIQUIDITY
 Days Payables Outstanding (DPO) 29.968
DIVIDENDS
 Dividend Coverage Ratio
 Dividend Payout Ratio
 Dividend Rate
 Dividend Yield
PERFORMANCE GROWTH
 Asset Growth Rate -6.505 %
 Revenue Growth 0.07 %
Revenue Growth QoQ -96.401 %
Revenue Growth YoY -102.415 %
Revenue Growth IPRWA high: 13.35 %
median: 2.743 %
mean: 2.433 %
CNC: 0.07 %
low: -7.264 %
 Earnings Growth -338.0 %
Earnings Growth QoQ -18.061 %
Earnings Growth YoY 567.76 %
Earnings Growth IPRWA high: 220.0 %
median: -5.274 %
mean: -21.507 %
low: -249.457 %
CNC: -338.0 %
MARGINS
 Gross Margin 4.961 %
Gross Margin QoQ -24.179 %
Gross Margin YoY -45.585 %
Gross Margin IPRWA high: 96.255 %
mean: 25.775 %
median: 12.836 %
CNC: 4.961 %
low: -5.777 %
 EBIT Margin -2.765 %
EBIT Margin QoQ -78.875 %
EBIT Margin YoY -317.374 %
EBIT Margin IPRWA high: 20.352 %
mean: 5.696 %
median: 2.026 %
CNC: -2.765 %
low: -39.27 %
 Return On Sales (ROS) -2.478 %
Return On Sales QoQ 483.059 %
Return On Sales YoY -294.811 %
Return On Sales IPRWA high: 20.384 %
mean: 7.502 %
median: 1.998 %
CNC: -2.478 %
low: -10.112 %
CASH FLOW
 Free Cash Flow (FCF) 224.0 M
 Free Cash Flow Yield 1.105 %
Free Cash Flow Yield QoQ -83.393 %
Free Cash Flow Yield YoY -146.605 %
Free Cash Flow Yield IPRWA high: 7.984 %
mean: 1.578 %
CNC: 1.105 %
median: 1.041 %
low: -12.708 %
 Free Cash Growth -80.437 %
Free Cash Growth QoQ 193.63 %
Free Cash Growth YoY 133.266 %
Free Cash Growth IPRWA high: 184.763 %
mean: -61.846 %
median: -72.187 %
CNC: -80.437 %
low: -369.889 %
 Free Cash To Net Income -0.203
 Cash Flow Margin 1.981 %
 Cash Flow To Earnings -0.895
VALUE & RETURNS
 Economic Value Added 0.03
 Return On Assets (ROA) -1.386 %
Return On Assets QoQ -82.391 %
Return On Assets YoY -504.082 %
Return On Assets IPRWA high: 9.352 %
mean: 1.289 %
median: 1.157 %
CNC: -1.386 %
low: -13.174 %
 Return On Capital Employed (ROCE) -3.433 %
 Return On Equity (ROE) -0.055
Return On Equity QoQ -82.568 %
Return On Equity YoY -614.739 %
Return On Equity IPRWA high: 0.486
median: 0.023
CNC: -0.055
mean: -0.055
low: -0.604
 DuPont ROE -5.383 %
 Return On Invested Capital (ROIC) -2.624 %
Return On Invested Capital QoQ -84.357 %
Return On Invested Capital YoY 3.839 %
Return On Invested Capital IPRWA high: 7.875 %
mean: 2.576 %
median: 2.088 %
CNC: -2.624 %
low: -4.467 %

Six-Week Outlook

Technical momentum favors a near-term upside bias: DI movements, a MACD cross above its signal, an increasing RSI, and an improving MRO probability all point toward continued mean-reversion toward WMDST’s target. Price trading near the 200-day average with immediate technical support around $34.06 and the lower Bollinger bands suggests a constrained upside window toward the 50-day average (~$38.87) absent a volume pickup. Fundamental weakness—negative margins and recurring operating losses—creates asymmetric risk if broader market sentiment shifts. Over the next six weeks expect price to test short-term resistance zones while remaining sensitive to any renewed deterioration in margins or changes in trading volume.

About Centene Corporation

Centene Corporation (NYSE:CNC) delivers comprehensive healthcare services, primarily targeting under-insured and uninsured populations across the United States. Established in 1984 and based in St. Louis, Missouri, Centene develops a wide array of health plans through its Medicaid, Medicare, and Commercial segments. The Medicaid segment offers expanded health plans, children’s health insurance programs, and long-term services. In the Medicare segment, Centene addresses the needs of seniors with special needs plans, Medicare supplements, and prescription drug plans. The Commercial segment provides marketplace insurance products for individuals and businesses, ensuring extensive access to healthcare services. Centene actively participates in government healthcare contracts, including the TRICARE program for military families, highlighting its dedication to diverse communities. The company also manages clinical healthcare services, pharmacies, and provides dental and speech therapy, promoting a holistic healthcare approach. By collaborating with primary and specialty care physicians, hospitals, and ancillary providers, Centene aims to deliver personalized, high-quality care to millions of Americans, emphasizing innovation and community well-being.



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