Centene Pulls 2025 Guidance as Marketplace Growth Falters
The decision comes after a thorough look at industry risk adjustment data from the independent actuarial firm Wakely, which analyzed 22 out of Centene's 29 Marketplace states, representing approximately 72% of its Marketplace membership. According to the company, these data show higher-than-expected overall market morbidity and a slower pace of market growth.
CNC is anticipating a shortfall of about $1.8 billion in net risk adjustment revenues, which would mean a $2.75 impact on adjusted diluted EPS for 2025. Although it does not have data from the other seven states, management anticipates a further decline in risk-adjusted revenues due to similar morbidity trends. Per the Wall Street Journal, shares of CNC plummeted in after-hours trading following the announcement, showcasing investors' anxiety over shrinking profit margins and the broader implications for managed care organizations.
Despite headwinds, CNC shared that the final 2024 risk-adjusted results from the Centers for Medicare and Medicaid Services aligned with their expectations, and its Medicare Advantage and Medicare PDP segments are performing better than its expectations in the second quarter of 2025. However, Medicaid is facing challenges due to rising costs in behavioral health, home care and expensive medications, particularly in states like New York and Florida.
As we look toward 2026, Centene is taking proactive steps to adjust its rates, aiming to account for a higher morbidity baseline. This adjustment is seen as a necessary move to help balance out potential losses. The company plans to make these pricing changes in the states where it conducts most of its marketplace business. The early refiling of 2026 rates by CNC suggests a more defensive pricing approach in the future.
A close look at second-quarter earnings and data analysis is required to move forward. CNC's second-quarter 2025 results are slated to be released on July 25.
Year to date, CNC shares have lost 43.3% compared with the industry's decline of 24.4%.
Image Source: Zacks Investment Research
CNC currently carries a Zacks Rank #2 (Buy).
Some other top-ranked stocks in the Medical space are Clover Health Investments Corp CLOV, Fresenius Medical Care AG & Co. FMS and BrightSpring Health Services, Inc. BTSG, each sporting a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today's Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Clover Health Investments' current-year earnings of 11 cents per share has witnessed one upward revision in the past 60 days against no movement in the opposite direction. Clover Health Investments beat earnings estimates in each of the trailing four quarters, with the average surprise being 114.6%. The consensus estimate for current-year revenues is pegged at $1.9 billion, indicating 37.7% year-over-year growth.
The Zacks Consensus Estimate for Fresenius Medical Care AG & Co.'s current-year earnings of $2.21 per share has witnessed two upward revisions in the past 30 days against no movement in the opposite direction. Fresenius Medical Care AG & Co. beat earnings estimates in three of the trailing four quarters and met once, with the average surprise being 6.6%. The consensus estimate for current-year revenues is pegged at $21.9 billion, implying 4.8% year-over-year growth.
The Zacks Consensus Estimate for BrightSpring Health Services' current-year earnings of 87 cents per share has witnessed four upward revisions in the past 60 days against no movement in the opposite direction. BrightSpring Health Services beat earnings estimates in two of the trailing four quarters and missed twice, with an average surprise being 17.5%. The consensus estimate for current-year revenues is pegged at $12.3 billion, indicating 9.1% year-over-year growth.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Fresenius Medical Care AG & Co. KGaA (FMS) : Free Stock Analysis Report
Centene Corporation (CNC) : Free Stock Analysis Report
Clover Health Investments, Corp. (CLOV) : Free Stock Analysis Report
BrightSpring Health Services, Inc. (BTSG) : Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).
Zacks Investment Research
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Yahoo
a few seconds ago
- Yahoo
12 Reverse Mortgage Pros and Cons To Help Retirees Avoid Financial Disaster
For many retirees, rising living costs and limited income can make financial stability feel out of reach. A reverse mortgage, also known as a home equity conversion mortgage (HECM), may offer a solution — allowing homeowners aged 62 and older to turn their home equity into cash without selling or making monthly payments. But while this option can provide much-needed relief, it also comes with risks that could impact your long-term financial health. Read Next: Find Out: In this guide, we break down 12 key pros and cons of reverse mortgages to help you make an informed decision — and avoid costly surprises down the road. Reverse Mortgage Qualifications In order to apply for a reverse mortgage, you must meet the following qualifications: You must be 62 years of age or older. You must live in the home you own. Your home must be paid off or have a low enough mortgage balance for you to pay it off with funds from the reverse mortgage transaction. You must have the financial means to pay your property taxes and insurance. You must receive consumer information, which is typically free or very inexpensive, from an HECM counselor before obtaining the loan. For You: The Upsides Seniors can use the payments from these specially structured loans to supplement their incomes, pay for healthcare and cover their expenses. Even better, the money is usually tax-free, even though it's used as income. You keep the title to your primary residence, and your Social Security benefits and Medicare benefits aren't affected. Perhaps most importantly to seniors concerned with security, you don't have to pay the money back for as long as you live in your home. Additional pros include: No mortgage payments: You don't have to make mortgage payments, like you would with a traditional mortgage. Thus, a reverse mortgage is an affordable option for seniors on a fixed income. Receive payments: Getting money through a reverse mortgage helps with cash flow. No taxes on proceeds: Money you receive from a reverse mortgage is not subject to taxes, which also helps if your income from other sources is inadequate. No need to sell your home: A reverse mortgage allows you to tap into the increase in your home's value without having to sell the home. Can delay using retirement savings: Using the money from a reverse mortgage to pay expenses keeps you from having to drum up cash by selling stocks and other investments. This gives such investments more time to grow. The Drawbacks If you do sell your home, or even if you just move out, you have to pay the money back. If you die first, your spouse or your estate picks up the tab for you, although in some cases, a non-borrowing spouse can remain in the home. Even in those cases, however, the surviving spouse will no longer receive payments since they weren't on the loan. In a lot of cases, the home must be sold to pay back the reverse mortgage loan. That's bad news for any heirs who were expecting a windfall of inheritance. Other cons include: You lose tax breaks: Interest paid on reverse mortgage loans is not tax-deductible, even in part, the way interest on a traditional mortgage is. The bill grows with time: With every reverse mortgage payment you accept, interest is added to your growing balance and the cumulative effect never ceases for the life of the loan. Expensive in the long run: Monthly servicing or origination fees, insurance premiums and mortgage interest are added to the amount you initially borrowed, and interest is then recalculated periodically on that amount. That means over time, the amount you owe grows. Involvement of all homeowners required: Everyone listed on the title for the property must also be named on the reverse mortgage, and at least one of you must be age 62 or older. Homeownership costs: A reverse mortgage requires you to stay up to date on property taxes, utilities and insurance premiums. The terms can be complicated for many homeowners to understand. Residence required: You cannot have a reverse mortgage on a property unless you live in the home. So if you move — to a nursing home, for example — the reverse mortgage will come due. Possible impact on Medicaid payments: Reverse mortgage loans might impact your payments from Medicaid or other public assistance programs. Final Take To GO: Now, the Lender Pays You If you go with this financial plan, you'll be able to stay in your home for many years, and if you're confident you'll be able to afford the ongoing homeownership costs, it could be a good deal for you. Simply put, reverse mortgages are just another way for homeowners to tap their equity. Like home equity loans, home equity lines of credit (HELOC) and cash-out refinances, reverse mortgages are loans borrowed against equity — but they're structured differently than the rest. With regular mortgages, borrowers increase their home equity with each monthly payment they make to their lenders. Just as the name would have you believe, reverse mortgages do the opposite — the lender takes part of the equity in the home and converts it into payments made to the borrower. So, if you're wondering if it is a good idea for you, here are some key questions to consider: Are you willing to pay the up-front and long-term costs of a reverse mortgage? Upfront costs include lender fees, your initial mortgage insurance payment and closing costs. Loan interest and recurring mortgage insurance payments represent long-term costs. A lower interest rate from a mortgage company like SecurityNational Mortgage Company — an HUD-approved lender for reverse mortgages — can save you hundreds or thousands of dollars over the life of the loan. Locate the best reverse mortgage interest rates by shopping a wide range of reverse mortgage lenders. Do you plan on staying in your home? If you don't plan on staying in your house for the long haul, the upfront costs won't be worth it. Do you live on a fixed income with few financial resources? If you're approved for a reverse mortgage and can't pay your property taxes or insurance, you'll risk the possibility of a foreclosure. Will your partner or spouse who lives with you be a co-borrower? Your significant other must be a co-borrower or they'll have to vacate the home. The co-borrower must repay the loan if you die. Is it important to leave your home to your children or other heirs? If this is important to you, a reverse mortgage might not be a good choice because you could have to sell your home to repay the loan. Andrew Lisa and Cynthia Measom contributed to the reporting for this article. More From GOBankingRates 3 Luxury SUVs That Will Have Massive Price Drops in Summer 2025 7 Ways To Tell If You're Rich or Middle Class -- It's More Than Your Paycheck 9 Downsizing Tips for the Middle Class To Save on Monthly Expenses This article originally appeared on 12 Reverse Mortgage Pros and Cons To Help Retirees Avoid Financial Disaster Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
a few seconds ago
- Yahoo
Factbox-Healthcare firms see growing activist investor involvement in the past year
(Reuters) -Activist investors have targeted major healthcare companies over the past year to push them to improve their performance, with some campaigns only coming to light after announcements of board changes. Below are some notable healthcare companies that came under activist pressure in the last 12 months. MEDTRONIC In August 2025, the medical device maker appointed two new independent directors to its board and created independent committees focused on improving its performance, after Elliott Investment Management took a large stake, making it one of the company's biggest shareholders. AVANTOR Engine Capital targeted the life sciences firm in August 2025, urging it to bring in new board directors, cut costs and even consider a sale. CHARLES RIVER LABORATORIES The contract research firm settled with Elliott Investment Management in May 2025 by agreeing to add four new board directors and launch a strategic review of the business. NOVO NORDISK Activist hedge fund Parvus Asset Management is building a stake in the company, as investors have grown concerned that the Danish drugmaker has lost its first-mover advantage in the lucrative weight-loss drug market, the Financial Times reported in June 2025. Reuters has not independently verified the report. GERRESHEIMER London-based investment fund Asset Value Investors in June 2025 pressed the German medical packaging maker to find ways to restore its market value. AVI, with a 3.5% stake in Gerresheimer, said the company needs a new financial leadership to regain its credibility. ILLUMINA In March 2025, the gene-sequencing maker said activist investor Keith Meister would join its board. HENRY SCHEIN In January, private equity firm KKR built a large stake in the medical and dental supplies distributor and reached a deal to add members to the company's board. Henry Schein was also under pressure from other investors, including Ananym Capital Management. PFIZER Activist hedge fund Starboard Value in October 2024 called for management accountability for the company's underperformance. This month, Starboard increased its holding in the drugmaker to 8.5 million shares, which represented about 0.15% of the outstanding shares as of June end. KENVUE In October 2024, Starboard Value took a significant stake in the Band-Aid maker, criticizing the weak performance of its skin health segment, which houses Neutrogena, Aveeno and other brands. After a proxy battle, the companies reached a deal in early 2025 that gave Starboard CEO Jeffrey Smith and two independent directors board seats. CVS HEALTH In November, CVS Health added Glenview Capital's top boss and three others to its board as part of a deal with the hedge fund. The company had been under pressure from investors, including Glenview, to improve operations after missing financial targets several times due to rising medical costs in its health insurance business. Glenview reduced its stake in the company after CVS posted strong results in May. Sign in to access your portfolio
Yahoo
a few seconds ago
- Yahoo
BrainsWay Acquires Minority-Stake in Axis Integrated Mental Health
The Investment is part of BrainsWay's ongoing strategy to acquire minority positions in leading U.S. mental health providers to help them raise awareness for and expand access to transformative care BURLINGTON, Mass. and JERUSALEM, Aug. 20, 2025 (GLOBE NEWSWIRE) -- BrainsWay Ltd. (NASDAQ & TASE: BWAY) ('BrainsWay' or the 'Company'), a global leader in advanced noninvasive neurostimulation treatments for mental health disorders, today announced that it has entered into a strategic equity financing agreement with Axis Management Company, Inc. ('Axis Integrated Mental Health' or 'Axis'), a management services organization servicing several mental health clinics in Colorado. Under the terms of the agreement, BrainsWay will invest $2.3 million initially, and an additional potential $1 million milestone-based investment, for a minority position in Axis in the form of a preferred, annually compounding security. The agreement also provides for a redemption mechanism relating to the shares. 'Our minority-stake investment in Axis follows our previous investment in Stella, and is part of BrainsWay's broader initiative to accelerate access to and awareness of innovative mental health treatments, including Deep TMS Therapy, while continuing to maintain our core focus on advancing our scientific and technological capabilities to ensure best-in-class support for all our customers. Within this strategy, our investments provide capital injections into high performing healthcare providers, which then allows these businesses to invest in growth drivers and launch new locations,' said Hadar Levy, Chief Executive Officer of BrainsWay. 'We see tremendous opportunities for these healthcare providers to offer expanded services and grow their businesses once they secure the necessary capital.' 'Axis offers a robust clinical services platform and is committed to achieving rapid growth and excellent patient outcomes. We are thrilled to support and collaborate with them as their business continues to scale from a well-respected regional platform to one with a larger footprint, enhancing their delivery of life-changing care to additional patients,' concluded Mr. Levy. 'Our partnership with BrainsWay was born out of a mutual desire to deliver the best cutting-edge mental health treatments to the communities we serve,' stated Chris Perez, Chief Executive Officer of Axis. 'Given the peerless reputation of BrainsWay and its proprietary Deep TMS technology, we realize the value this strategic partnership will provide as we further advance in our mission of putting patients first through our best-in-class support.' About BrainsWay BrainsWay is a global leader in advanced noninvasive neurostimulation treatments for mental health disorders. The Company is advancing neuroscience with its proprietary Deep Transcranial Magnetic Stimulation (Deep TMS™) platform technology to improve health and transform lives. BrainsWay is the first and only TMS company to obtain three FDA-cleared indications backed by pivotal clinical studies demonstrating clinically proven efficacy. Current indications include major depressive disorder (including reduction of anxiety symptoms, commonly referred to as anxious depression), obsessive-compulsive disorder, and smoking addiction. The Company is dedicated to leading through superior science and building on its unparalleled body of clinical evidence. Additional clinical trials of Deep TMS in various psychiatric, neurological, and addiction disorders are underway. Founded in 2003, with operations in the United States and Israel, BrainsWay is committed to increasing global awareness of and broad access to Deep TMS. For the latest news and information about BrainsWay, please visit About Axis Axis Integrated Mental Health services its leading mental health practices, which are dedicated to transforming lives through a truly comprehensive, integrative model of care. With a team of board-certified specialists combining modern psychiatry and psychotherapy with advanced treatments including Deep TMS™ and Spravato®, Axis utilizes an evidence-based, holistic therapeutic approach to treat patients, all through a single, coordinated care experience under one roof. For more information, please visit Forward-Looking Statement This press release contains 'forward-looking statements' within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements may be preceded by the words 'intends,' 'may,' 'will,' 'plans,' 'expects,' 'anticipates,' 'projects,' 'predicts,' 'estimates,' 'aims,' 'believes,' 'hopes,' 'potential' or similar words, and also includes any financial guidance and projections contained herein. These forward-looking statements and their implications are based on the current expectations of the management of the Company only and are subject to a number of factors and uncertainties that could cause actual results to differ materially from those described in the forward-looking statements. In addition, historical results or conclusions from scientific research and clinical studies do not guarantee that future results would suggest similar conclusions or that historical results referred to herein would be interpreted similarly in light of additional research or otherwise. The following factors, among others, could cause actual results to differ materially from those described in the forward-looking statements: the failure of our investments in management services organizations and/or other clinic-related entities to produce profitable returns; inadequacy of financial resources to meet future capital requirements; changes in technology and market requirements; delays or obstacles in launching and/or successfully completing planned studies and clinical trials; failure to obtain approvals by regulatory agencies on the Company's anticipated timeframe, or at all; inability to retain or attract key employees whose knowledge is essential to the development of Deep TMS products; unforeseen difficulties with Deep TMS products and processes, and/or inability to develop necessary enhancements; unexpected costs related to Deep TMS products; failure to obtain and maintain adequate protection of the Company's intellectual property, including intellectual property licensed to the Company; the potential for product liability; changes in legislation and applicable rules and regulations; unfavorable market perception and acceptance of Deep TMS technology; inadequate or delays in reimbursement from third-party payers, including insurance companies and Medicare; inability to commercialize Deep TMS, including internationally, by the Company or through third-party distributors; product development by competitors; inability to timely develop and introduce new technologies, products and applications, which could cause the actual results or performance of the Company to differ materially from those contemplated in such forward-looking statements. Any forward-looking statement in this press release speaks only as of the date of this press release. The Company undertakes no obligation to publicly update or review any forward-looking statement, whether as a result of new information, future developments or otherwise, except as may be required by any applicable securities laws. More detailed information about the risks and uncertainties affecting the Company is contained under the heading 'Risk Factors' in the Company's filings with the U.S. Securities and Exchange Commission. Contacts: BrainsWay:Ido MaromChief Financial Investors:Brian RitchieLifeSci Advisors LLCbritchie@ in to access your portfolio
