Share count
493Mpeak FY2021
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CNC, Centene Corporation
Managed Care financial
Centene is a health insurer that mostly covers people in government programs — Medicaid and Medicare — along with families who buy coverage on the Health Insurance Marketplace. It collects premiums, largely from the state and federal governments that pay it to manage members' care, and out of that money it pays the members' medical claims. What is left after claims and overhead is the profit, so the business is a bet that the premium will cover the doctor and hospital bills that follow.
Centene provides access to high-quality healthcare, innovative programs and a wide range of health solutions that help families and individuals get well, stay well and be well.
Our data and insights give us a powerful opportunity to anticipate needs, personalize care, and build a more affordable and effective healthcare system for tomorrow.
The business
What it sells, where the money comes from, the kind of company it is.
Revenue · FY2025
$194.8B
+19.4% YoY · 12% 5-yr CAGR
Vital signs · TTM, with 5-yr average
Revenue $198.1B 5-yr avg $156.5B
Revenue $49.9B +7.1% vs yr-ago qtr
Operating margin 3.7% yr-ago 3.3%
Net income $1.5B yr-ago $1.3B
Net margin 3.1% yr-ago 2.8%
The business in brief
read the 10-K →What this business is and what moves its needle, from its own SEC filings.
- What it is
- Revenue is led by Medicaid (57%) and Commercial (22%), with 2 more segments behind.
- What moves the needle
- For a government-program insurer the outcome turns on two things: whether it can price medical risk — set premiums above the claims it will actually owe — and whether it can win and keep the state and federal contracts that supply most of its members. Scale is the moat to test here, since spreading fixed costs and bargaining with providers is what lets a thin-margin, regulated insurer earn its keep; look to the record below for whether that scale shows up in the numbers. The bad case is plain and is the filing's own worry: a stroke of the government's pen can rewrite the rules — the company points to the Inflation Reduction Act reshaping Medicare Part D — a lost contract can remove a block of members at once, and claims that run ahead of premiums turn the spread negative. Watch the medical-cost spread, the contract book, and the debt load in the figures below.
- Is it a good business?
- The split between premiums and medical costs is not cleanly tagged in the filings. That leaves a thin operating margin, a median of about 2.2%, the sign of a volume-and-cost-control business rather than a high-margin one, though turns that sliver over fast enough to earn roughly 9% on equity. Whether membership keeps growing and medical costs stay below premiums, especially as the Medicare Advantage and Medicaid mix shifts, is what the 10-K decides, not an earnings multiple.
Drafted from the company's filings and reviewed by hand; every number is shown in full in the sections below.
Where the money comes from
read the 10-K →Revenue spreads across 4 segments, the largest Medicaid at 57%.
Revenue by reportable segment, FY2025
- Medicaid57%$110.4B
- Commercial22%$42.0B
- Medicare19%$37.2B
- Other3%$5.1B
From the segment footnote of the company's own 10-K. Shares are of total revenue; the profit bar shows each segment's share of segment operating profit, before unallocated corporate costs.
The record
Ten years of arithmetic, read across the cycle.
The record, 2016–2025
realized figures from each filing · older years to the left| 2016’16 | 2017’17 | 2018’18 | 2019’19 | 2020’20 | 2021’21 | 2022’22 | 2023’23 | 2024’24 | 2025’25 | TTMTTMMar 2026 | |
|---|---|---|---|---|---|---|---|---|---|---|---|
| Income statement | |||||||||||
| $40.6B | $48.4B | $60.1B | $74.6B | $111.1B | $126.0B | $144.5B | $154.0B | $163.1B | $194.8B | $198.1B | RevenueRevenue |
| $35.4B | $43.4B | — | — | — | — | — | — | — | — | $44.6B | Premiums earnedPremiums |
| 3.1% | 2.5% | 2.4% | 2.4% | 2.8% | 1.4% | 0.9% | 1.9% | 1.9% | −3.9% | −3.7% | Operating marginOp. mgn |
| $562M | $828M | $900M | $1.3B | $1.8B | $1.3B | $1.2B | $2.7B | $3.3B | ($6.7B) | ($6.4B) | Net incomeNet inc. |
| 52% | 28% | 34% | 26% | 35% | 26% | 39% | 25% | 23% | — | — | Effective tax rateTax rate |
| Cash flow & returns | |||||||||||
| 10% | 12% | 8% | 11% | 7% | 5% | 5% | 10% | 13% | -33% | -30% | Return on equityROE |
| 10% | 12% | 8% | 11% | 7% | 5% | 5% | 10% | 13% | −33% | −30% | Retained to equityRetained/eq |
| Balance sheet | |||||||||||
| $20.2B | $21.9B | $30.9B | $41.0B | $68.7B | $78.4B | $76.9B | $84.6B | $82.4B | $76.7B | $81.2B | Total assetsAssets |
| $5.9B | $6.8B | $10.9B | $12.6B | $25.8B | $26.8B | $24.1B | $25.8B | $26.4B | $20.0B | $21.4B | Shareholders’ equityEquity |
| Per share | |||||||||||
| 328M | 353M | 399M | 420M | 579M | 591M | 582M | 546M | 524M | 493M | 496M | Shares out (diluted)Shares |
| $123.82 | $136.90 | $150.85 | $177.54 | $191.86 | $213.34 | $248.35 | $282.20 | $311.36 | $394.99 | $399.73 | Revenue / shareRev/sh |
| $1.71 | $2.34 | $2.26 | $3.14 | $3.12 | $2.28 | $2.07 | $4.95 | $6.31 | $-13.53 | $-13.00 | EPS (diluted)EPS |
| $17.98 | $19.38 | $27.39 | $29.85 | $44.50 | $45.38 | $41.33 | $47.35 | $50.43 | $40.46 | $43.24 | Book value / shareBVPS |
Per-share growththe realized rate an owner's share compounded
| 9-yr | 5-yr | |
|---|---|---|
| Revenue / share | +13.8%/yr | +15.5%/yr |
| Owner earnings / share | +7.1%/yr | +1.8%/yr |
| Capital spending / share | +5.8%/yr | +0.7%/yr |
| Book value / share | +9.4%/yr | −1.9%/yr |
The year, in the company's words
the filing →Verbatim from the 10-K's management discussion. Each sentence is shown only because its subject, direction, and stated figures check out against the filed numbers on this page. The words are the company's; the arithmetic is the record's.
- Medicaid+8.9%
“Medicaid Total revenues increased 9% in the year ended December 31, 2025, compared to the corresponding period in 2024. The increase in total revenues was primarily driven by increased premium tax revenue and rate increases, partially offset by lower membership, primarily due to redeterminations.”
✓ figure matches the filed record - Commercial+24.6%
“Commercial Total revenues increased 25% in the year ended December 31, 2025, compared to the corresponding period in 2024 primarily driven by 26% membership growth in the Marketplace business, partially offset by lower estimated risk adjustment revenue.”
✓ figure matches the filed record - Medicare+61.6%
“Medicare Total revenues increased 62% in the year ended December 31, 2025, compared to the corresponding period in 2024, primarily driven by increased PDP premium yield and membership, partially offset by lower Medicare Advantage membership.”
✓ figure matches the filed record
The record, charted
FY2016–2025Each measure over its full record; the current point and the worst year marked.
Revenue
$194.8Blow FY2016
Quality & stewardship
Returns, the balance sheet, capital allocation, and pay.
Owner’s Scorecard
FY2025 10-K · source on SEC EDGAR →
Is it a good business?
- Not enough dataIndustry peers: median 85%
What this means
Premiums or medical claims weren't cleanly tagged in the filing data.
- Operating margin −3.9%Very thin (<2%)Operating income ($7.6B) ÷ revenue $194.8BIndustry peers: median 4%
What this means
Health plans earn a sliver on enormous revenue, so a few points of margin is the norm and the business is really a volume-and-cost-control game. Because the margin is so thin, a small miss on medical costs swings profit hard, which is why membership scale and cost management matter more than price.
- Return on equity −33%Loss on equityNet income ($6.7B) ÷ equity $20.0BIndustry peers: median 14%
What this means
The thin margin turns over fast on a modest capital base, so a plan earning its keep still shows a good return on equity. Durably above the ~10% cost of equity is what compounds value; a year below it usually means medical costs outran premiums.
Does AI threaten the moat?
Low contestabilityThe moat is physical, regulated or balance-sheet-funded, the kind AI cuts costs within but does not contest.
In its own filing Raised, but not as a competitor
The filing raises AI among its risks, but in other terms (security, regulation, energy or the like), not as a competitor to its product; it frames AI mainly as a capability.
AI is unlikely to contest a moat that is physical, regulated or balance-sheet-funded; here it reads more as a cost tool than a threat, and the company is using it that way.
Read from the filing's own risk factors, paired with the industry's structure under its SIC code; the durability is read above, the price below.
All figures as filed; the source filing is linked above.
Current Position
as of the latest quarter, Mar 31, 2026Can the business pay what it owes this year, off the freshest balance sheet: the quality of the assets, the debt actually coming due, and what a low ratio means here.
Current assets$45.0B
- Cash & short-term investments$23.7B
- Other current assets$21.2B
Current liabilities$40.0B
- Debt due within a year$63M
- Accounts payable$16.8B
- Other current liabilities$23.1B
Current ratio1.12×all current assets ÷ what's due · Graham looked for 2×
Quick ratio1.12×stricter: inventory excluded
Cash ratio0.59×strictest: cash alone against what's due
Working capital$4.9Bthe cushion left after near-term bills
Debt due this year vs. cash$63M due · $23.7B cash
covered by cash on hand, no refinancing forced · both figures from the Mar 31, 2026 balance sheet
Revenue, latest quarter vs. a year ago+7.1%the freshest read on whether the business is still growing
Current ratio, recent quarters1.2× → 1.1×
Deeper floors
Tangible book value$6.2Bequity stripped of goodwill & intangibles
Net current asset value($14.7B)Graham's net-net: current assets less all liabilities
Debt incl. operating leases$17.1B$761M of it operating leases
Deferred revenue$953Mcustomer cash collected before delivery; operating float
From the company's latest filing.
Debt maturity
the debt note, SEC EDGAR →Not how much it owes, but when it falls due, and against what. The ladder the company files, beside cash on hand and a year's owner earnings.
Bars scaled to the largest single year; “later” is everything due after 2030, shown apart since it dwarfs the years.
Due in the next 12 months$50Mthe first rung: what must be repaid or rolled over within the year
Within two years$2.4Bthe near wall, the part most exposed to today’s credit conditions
Biggest single year$5.8Bin 2030the lumpiest maturity, where a refinancing, if needed, is largest
Total scheduled principal$17.5Bevery year plus what lies beyond, as the footnote totals it
Against what the business has and earns
Cash & short-term investments, Mar 31, 2026$23.7B
One year of owner earnings (FY2025)$4.3B
Together, against $50M due next year561.2×
Cash on hand as of Mar 31, 2026 plus a year’s owner earnings comes to $28.1B against the $50M due in the twelve months after the Dec 31, 2025 schedule: 561 times it.
Maturity schedule extracted from the company’s Dec 31, 2025 annual report and reconciled to the total the table states.
Acquisitions & goodwill
from the balance sheet & the 10-year cash-flow recordGoodwill grows only when a company acquires and falls only when it concedes it overpaid. The size of that bet, the cash put into buying rather than building, and how much has already been written off.
Goodwill & intangibles$15.4B20% of all assets; the premium carried on the balance sheet for businesses acquired
Against book equity54%goodwill is this share of book equity; the rest is the company’s own retained and paid-in capital
Cash spent acquiring$9.5Bover 10 years buying other businesses, against $7.1B of capital spent building
$1.0B written down across 4 years (2019, 2020, 2022, 2023): goodwill the company has already conceded it overpaid for, charged against earnings. A write-down costs no cash (the cash went out when the deal was signed), but it is management marking its own past judgment to market.
Goodwill, acquired intangibles and equity from the latest balance sheet; acquisition spend and write-downs summed across the 10-year record, from the company's own filings.
Management, ownership & pay
read the proxy →From the proxy: how much of the business the people running it own, and how they are paid, beside what the business earned for its owners in the same years.
| Fiscal year | Chief executive | Pay, as filed | “Actually paid” | Owner earnings |
|---|---|---|---|---|
| 2021 | Neidorf | $20.6M | $42.3M | $3.3B |
| 2022 | London | $13.2M | $12.6M | $5.3B |
| 2022 | Neidorf | $7.6M | $6.8M | $5.3B |
| 2023 | London | $18.6M | $14.0M | $7.3B |
| 2024 | London | $20.6M | $5.4M | ($490M) |
| 2025 | London | $19.5M | $4.6M | $4.3B |
Both pay figures are the company’s own, from the pay-versus-performance table its proxy statement files. “As filed” is the Summary Compensation Table total: salary, bonus, and equity awards at their value on the day of grant. “Actually paid” is the SEC’s prescribed recalculation, which re-marks those equity awards to what they became as they vested; it can swing far above or below the filed figure in either direction, and negative years occur. Owner earnings are the whole business's, from the record above, for the same fiscal years.
- Insider ownership<1%
The stake all directors and executive officers hold together, per the 2026 proxy: skin in the game, the first thing Munger reads.
- Stock-based compensation$204M
The slice of the business handed to employees in shares this year, 0% of revenue. Buffett's oldest accounting fight: this is compensation, compensation is an expense, real whether or not the headline earnings admit it. One trap: the cash-flow statement adds SBC back, so the operating cash, and the owner earnings drawn from it, are flattered by exactly this amount; counted as the cost it is, what an owner keeps is lower.
What an owner would ask, FY2025
read the 10-K →- Which reported numbers are a judgment call?Management names Revenue recognition, Acquisitions, Insurance reserves as critical estimates
each rests partly on management's judgment; the filing's note sets out the assumptionsverify →
The questions the record and the charts do not answer on their own; each carries the figure and the place to look.
Peers, Managed Care
The same industry, side by side on the medical-loss-ratio lens. Each figure is a through-cycle median, so a peak or trough year can’t distort it; the group median at the foot is the line to read each against.
| Company | Revenue | Medical loss ratio | Op. margin | ROE |
|---|---|---|---|---|
| UNHUnitedhealth Group Incorporated | $447.6B | 84% | 8.1% | 22% |
| CIThe Cigna Group | $274.9B | 80% | 4.9% | 13% |
| ELVElevance Health Inc. | $199.1B | 87% | 5.3% | 14% |
| CNCCentene Corporation | $194.8B | — | 2.2% | 9% |
| HUMHumana Inc. | $129.7B | 89% | 3.9% | 17% |
| MOHMolina Healthcare | $45.4B | — | 3.9% | 26% |
| OSCROscar Health | $11.7B | 85% | -14.9% | -41% |
| ALHCAlignment Healthcare | $3.9B | — | -3.9% | -69% |
| Group median | — | — | 3.9% | 13% |
The price
What a price has to assume.
What the price implies
reverse-DCFType today's close and see the owner-earnings growth you'd have to believe to justify it, beside what Centene Corporation has delivered.
$
Through the cycle, Centene Corporation earns about $4.7B on its 2.4% median owner-earnings margin. This year’s 2.2% margin runs in line with that. Normalize, below, values the price on that through-cycle figure rather than the latest year.
Base
—
The assumptions
9.0% = the 4.55% 10-year Treasury (Jul 15, 2026) + 4.45 points of equity premium. The rate you require is yours to set.
Enter a price above to run it.
A dated snapshot of the price you typed, the assumptions you set, and what the page showed for them. A snapshot is never edited after it is saved. Your notebook is yours alone — the commitment states what is stored and what we will never do.
Implied by the price—
Owner-earnings growth · ’21→’25−18%/yr
Owner-earnings growth · ’16→’25+4%/yr
Owner-earnings growth · ’16→’25+4%/yr
Owner-earnings yield—
What a growth belief costs, in multiples
The growth each return requires, at your price
P/E (3-yr earnings ’23–’25)—
P/B—
Graham’s price gate—
Graham capped the multiple at 15×; Buffett and Munger let that rule go: a wonderful business can deserve 50× if the thesis holds. The gate marks the bargain-hunter's floor.
Against a high-grade bond: Graham’s yardstick bond yield%
Prefilled with the 10-year Treasury (4.55%, as of Jul 15, 2026). Edit it for today’s exact figure, or a AAA corporate yield.
Graham measured a stock against the bond you could own instead, the heart of his margin of safety. Enter a price above to weigh the owner-earnings yield against this bond.
Owner-earnings yield—
High-grade bond yield—
Margin over the bond—
Owner earnings $7.1B on 494M shares outstanding, per the 10-Q cover, as of 2026-04-24; net cash $7.4B. The base is the latest year by default; Normalize values it on the through-cycle median owner-earnings margin (to avoid paying on a peak year). Net of stock comp treats option pay as the expense it is. The dials set the multiple a growth belief justifies; the price, and every dollar on this page, is yours.
Cite: Owner Scorecard, "Centene Corporation (CNC), the owner's record," https://ownerscorecard.com/c/CNC, data as of 2026-07-09.
Manual order: ← CNA its page in the Manual CNH →
Industry order: ← CLOV the Managed Care chapter ELV →