What Is Driving The Move In Centene Stock

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Centene (CNC) shares climbed 104.2% in the year to October 23, 2026, outpacing the 14.5% return for the S&P 500. Over that year, the health insurer swung from quarterly losses back to profits, and management raised its 2026 profit forecast on April 28 and again on July 28, 2026. What turned Centene's results around?

Centene Spent A Smaller Share Of Premiums On Care

Medical costs consumed a smaller portion of the premiums Centene collects. During the July 28 call, management said that share fell to 89.6% in the second quarter of fiscal 2026, down from 93% in the same quarter a year earlier. The commercial business, led by plans sold on the Marketplace, improved sharply: the portion of its premiums spent on care dropped to 79.2% from 90.6%.

Profit also recovered. Centene posted a 2.2% operating margin in the June quarter, rebounding from an operating loss in the same quarter of 2025.

Management turned that progress into a higher forecast. Centene set its 2026 forecast in February at adjusted earnings per share above $3.00, and raised the target to above $3.40 on April 28. On July 28, management lifted it again to above $4.80. The stock recorded its largest one-day gain of the year, 14.0%, on April 28, the day of the first raise. Industry peers advanced far less over the same year: UnitedHealth Group by 19.1%, Elevance Health by 30% and CVS Health by 18.8%. So the rise belonged to Centene rather than the entire group.

How Much Of Centene's Sales Now Become Profit?

Centene's operating margin over the twelve months to June 2026 stood at 0.796%, compared with 2.1% two years earlier. That trailing span still includes the two loss-making quarters from late 2025. The company has reported a lower margin at only three of the 40 quarter-ends since 2016.

Centene also continues to show a net loss of $5.1 billion over those twelve months. That period includes the third quarter of 2025, when a $6.7 billion goodwill write-down, a non-cash charge, left the company with a loss. Because this charge sits below operating profit in these figures, the operating margin remained positive. The recovery has returned Centene to quarterly profits, but not to the margins it earned before 2025.

Centene's Medicaid Business Is Still Losing Members

Medicaid, Centene's largest business, accounted for 56.7% of its revenue in fiscal 2025. Management now expects full-year Medicaid membership to fall 8% to 9%, compared with its earlier view of a 6% drop. The company also expects some states to keep trimming Medicaid rolls ahead of changes due in 2027.

Management said medical costs for the Medicaid business are on track with its forecast. Those expenses consumed 93.1% of premiums in the first quarter and 93.9% in the second, and executives still expect a rate of about 93.5% for the full year.

Medicaid membership, which stood at 12.1 million at the end of June, is the number to watch when Centene next reports.

How To Act On CNC?

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