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    CNC · NYQ · Healthcare

    Centene Corporation

    Also onShortfallConsensus DriftCrosscheck

    Implied value per share

    USD 64.72

    Market price

    USD 66.53

    Implied upside

    -2.7%

    10-year forecast · Perpetuity growth terminal value · Mid-year discounting · Base case · Price 2026-11-02 · Accounts to 2025-12-31

    AdjustedReported capital expenditure averages just 0.50% of revenue, which is too low to be the company's real investment - property trusts and similar structures invest through lines that are not reported as capex. Capex has been set to 1.00% of revenue so the forecast is not handed free growth. The accounts do not separate depreciation from amortisation, so the combined charge is used - if a large part of it is amortisation of an acquisition, the reported capex is probably right and this substitution is not. Override it if the reported figure is right.

    Current EV/EBITDA of 32.0x sits outside a defensible 3-20x band, so the exit multiple is capped at 20.0x. A multiple that far out usually means EBITDA is the wrong denominator for this business.

    Value Per Share

    Perpetuity growth
    USD 64.72-2.7%
    Exit multiple
    USD 128.22+92.7%
    Market price
    USD 66.53

    Same forecast, different terminal treatment. Percentages vs price.

    Forecast Cashflows

    Reporting currency (USD). Outflows negative.

    0bn1bn2bnFY26FY27FY28FY29FY30FY31FY32FY33FY34FY35
    Nominal FCFFDiscounted to todayUSD
    LineFY26FY27FY28FY29FY30FY31FY32FY33FY34FY35CAGR
    RevenueUSD 199.9bnUSD 195.1bnUSD 191.6bnUSD 189.3bnUSD 188.2bnUSD 188.3bnUSD 189.6bnUSD 192.0bnUSD 195.6bnUSD 200.5bn+0.0%
    EBITUSD 3.3bnUSD 3.2bnUSD 3.1bnUSD 3.1bnUSD 3.1bnUSD 3.1bnUSD 3.1bnUSD 3.1bnUSD 3.2bnUSD 3.3bn+0.0%
    NOPATUSD 2.6bnUSD 2.5bnUSD 2.5bnUSD 2.5bnUSD 2.4bnUSD 2.4bnUSD 2.5bnUSD 2.5bnUSD 2.5bnUSD 2.6bn+0.0%
    Add depreciation & amortisationUSD 1.6bnUSD 1.6bnUSD 1.6bnUSD 1.5bnUSD 1.5bnUSD 1.5bnUSD 1.5bnUSD 1.6bnUSD 1.6bnUSD 1.6bn+0.0%
    Less capital expenditureUSD -2.0bnUSD -2.0bnUSD -2.0bnUSD -2.0bnUSD -2.1bnUSD -2.1bnUSD -2.2bnUSD -2.2bnUSD -2.3bnUSD -2.4bn+2.2%
    Capex, % of revenue1.0%1.0%1.0%1.1%1.1%1.1%1.1%1.2%1.2%1.2%-
    Less increase in working capitalUSD -128.1mUSD 120.6mUSD 87.7mUSD 56.7mUSD 26.9mUSD -2.2mUSD -31.2mUSD -60.5mUSD -90.8mUSD -122.6m-0.5%
    Free cashflow to firmUSD 2.1bnUSD 2.2bnUSD 2.1bnUSD 2.0bnUSD 1.9bnUSD 1.9bnUSD 1.8bnUSD 1.7bnUSD 1.7bnUSD 1.7bn-2.5%
    Discount factor0.96240.89150.82570.76480.70840.65620.60780.56300.52150.4830-
    Present valueUSD 2.0bnUSD 2.0bnUSD 1.7bnUSD 1.5bnUSD 1.4bnUSD 1.2bnUSD 1.1bnUSD 978.3mUSD 883.4mUSD 801.0m-
    Present Value Of The ForecastUSD 13.6bn

    Discount Rate

    Source shown per component. All overridable above.

    Risk-free rate4.89%US 10-year Treasury (^TNX), 2026-11-02
    Equity risk premium4.23%Damodaran, January 2026
    Beta1.053Reported 1.079, pulled toward 1.0 (Blume)
    Cost of equity9.35%Risk-free + beta x equity risk premium
    Cost of debt6.89%Risk-free + 200bp, the spread for a D rating at -0.5x interest cover, capped at 200bp because one year's cover is too noisy to charge more. Book interest / average debt was lower, at 3.6%.
    Market capitalisationUSD 32.9bn64.5% of capital
    Total debtUSD 18.2bn35.5% of capital, book value as a proxy
    Tax rate21.0%Effective, capped at statutory
    WACC7.96%E/V x Re + D/V x Rd x (1 - t)

    Terminal Value

    Perpetuity growth is intrinsic. The exit multiple defaults to the company's current EV/EBITDA, so it answers a different question - what the shares are worth if today's rating holds and EBITDA grows as forecast.

    Perpetuity growth at 2.50%

    Value per shareUSD 64.72

    54% of EV

    Forecast FCFF, final year
    USD 1.7bn
    Capex at depreciation, working capital in reinvestment
    USD 2.6bn
    Less reinvestment at g/ROIC (31.4% of NOPAT)
    USD -815.3m
    Capitalised
    USD 1.8bn
    ROIC (WACC floor)
    8.0%
    Terminal value, undiscounted
    USD 33.4bn
    Terminal value, discounted
    USD 16.1bn
    Enterprise value
    USD 29.8bn
    Less net debt
    USD -2.2bn
    Equity value
    USD 31.9bn

    Exit at 20.0x EBITDA

    Value per shareUSD 128.22

    78% of EV

    Terminal value, undiscounted
    USD 98.3bn
    Terminal value, discounted
    USD 47.5bn
    Enterprise value
    USD 61.1bn
    Less net debt
    USD -2.2bn
    Equity value
    USD 63.2bn

    Spread between methods: 66%.

    Sensitivity

    Value per share (USD) by discount rate and long-run growth.

    Long-run growth
    Discount rate1.50%2.00%2.50%3.00%3.50%
    5.96%88.0587.3586.7786.3986.30
    6.96%75.1674.2073.2472.2871.32
    7.96%66.3165.5164.7263.9263.13
    8.96%59.4558.7858.1157.4456.77
    9.96%53.9753.4052.8352.2651.69

    Outlined: this model. Green text: above today's price of 66.53. Shading: distance from this model's own value.

    Priced In

    What each input would have to be to justify the current price, one at a time.

    InputActualModelImplied
    Revenue growth, a year10.5%0.3%0.7%
    EBIT margin2.5%1.6%1.7%
    Discount rate-8.0%7.7%
    Download as Excel

    Live formulas, not pasted numbers - edit a driver and the workbook reprices.

    Yahoo Finance and RBA data. General information, not advice. Methodology.