CNC Should I Buy
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Centene Corp (CNC) is not a strong buy for a beginner, long-term investor at this moment. The stock's recent financial performance shows significant losses, and technical indicators do not suggest a clear upward trend. While analysts have raised price targets, the sentiment remains mixed, and the stock lacks strong positive catalysts for immediate growth. Given the investor's preference for long-term investments, it would be prudent to wait for clearer signs of recovery or stabilization in financial performance and stock price trends before committing funds.
The technical indicators suggest a neutral to bearish outlook. The MACD is below zero and negatively contracting, indicating weak momentum. RSI is at 36.135, which is in the neutral zone but leaning toward oversold. The stock is trading below the pivot level of 40.178, with key support at 37.164 and resistance at 43.192. Moving averages are converging, signaling indecision in the market.
Analysts have raised price targets recently, with some seeing potential for margin recovery in Medicare Advantage and Medicaid sectors. Community initiatives like playground building and student programs enhance brand reputation.
Q4 2025 financials showed a significant loss of $1.19 per share, a 489.05% YoY drop in net income, and a 500% YoY drop in EPS. Gross margin also declined sharply. The stock price has dropped 3.09% in the regular market and 0.10% post-market, reflecting weak investor sentiment.
In Q4 2025, Centene's revenue increased by 21.86% YoY to $49.73 billion. However, net income dropped to -$1.101 billion, and EPS fell to -$2.24, indicating severe profitability challenges. Gross margin also declined by 48.50% YoY to 4.3%.
Analyst sentiment is mixed. While some firms like Barclays and Bernstein are optimistic about future margin recovery and have raised price targets, others like Truist and Mizuho have highlighted uncertainties in Medicaid and Marketplace sectors. The average price target ranges from $39 to $59, with ratings varying from Hold to Outperform.
