• Bleichmar Fonti & Auld LLP announced that a lawsuit has been filed against Centene Corporation and certain executives for alleged violations of federal securities laws, following the company’s withdrawal of prior financial guidance in response to an independent actuarial report revealing lower enrollment growth and higher morbidity rates in key states.
• This legal action highlights investor concerns about the accuracy of Centene’s public statements regarding its core business fundamentals in government-sponsored healthcare programs.
• We'll examine how the lawsuit and questions around prior guidance may alter Centene's investment narrative and confidence in its long-term outlook.

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Centene Investment Narrative Recap

To believe in Centene as a shareholder, you need confidence that its core government-sponsored healthcare business can recover margins through improved rate adjustments and growth in Medicaid and Medicare Advantage enrollment. However, the recent lawsuit and withdrawal of financial guidance have put a spotlight on the accuracy of management’s disclosures, raising questions about near-term confidence and amplifying the risk that enrollment and morbidity trends could weigh on earnings recovery this year.

The withdrawal of Centene’s 2025 financial guidance on July 1, following an independent actuarial report, is central to this recent legal action. This announcement directly impacts the short-term catalyst of margin recovery in Medicaid, as both enrollment growth and morbidity rates now appear less favorable than earlier communications suggested.

But investors should also keep in mind the possibility that, despite recent guidance withdrawals and legal uncertainties, there are longer-term risks to be aware of if...

Read the full narrative on Centene (it's free!)

Centene's outlook anticipates $194.4 billion in revenue and $2.3 billion in earnings by 2028. This scenario assumes a 6.8% annual revenue growth rate and a $0.2 billion increase in earnings from the current $2.1 billion.

Uncover how Centene's forecasts yield a $35.31 fair value, a 38% upside to its current price.

Exploring Other Perspectives

Eleven individual fair value estimates from the Simply Wall St Community range between US$35.05 and US$173.72 per share. With such a wide spread of views, recent setbacks around enrollment and margin recovery remind you that company outlooks can shift sharply, so be sure to compare multiple viewpoints before making decisions.

Explore 11 other fair value estimates on Centene - why the stock might be worth just $35.05!

Build Your Own Centene Narrative

Disagree with existing narratives? Create your own in under 3 minutes - extraordinary investment returns rarely come from following the herd.

• A great starting point for your Centene research is our analysis highlighting 3 key rewards and 2 important warning signs that could impact your investment decision.
• Our free Centene research report provides a comprehensive fundamental analysis summarized in a single visual - the Snowflake - making it easy to evaluate Centene's overall financial health at a glance.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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