Centene's (NYSE:CNC) Performance Is Even Better Than Its Earnings Suggest
Centene's (NYSE:CNC) Performance Is Even Better Than Its Earnings Suggest
Centene Corporation's (NYSE:CNC) strong earnings report was rewarded with a positive stock price move. We have done some analysis, and we found several positive factors beyond the profit numbers.
Centene Corporation(纽约证券交易所代码:CNC)强劲的收益报告获得了股价的积极走势的回报。我们做了一些分析,除了利润数字外,我们还发现了几个积极因素。
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Examining Cashflow Against Centene's Earnings
将现金流与Centene的收益进行比较
Many investors haven't heard of the accrual ratio from cashflow, but it is actually a useful measure of how well a company's profit is backed up by free cash flow (FCF) during a given period. In plain english, this ratio subtracts FCF from net profit, and divides that number by the company's average operating assets over that period. The ratio shows us how much a company's profit exceeds its FCF.
许多投资者尚未听说过现金流的应计比率,但它实际上是衡量公司在给定时期内自由现金流(FCF)在多大程度上支持利润的有用指标。简而言之,该比率从净利润中减去FCF,然后将该数字除以该时期公司的平均运营资产。该比率向我们显示了公司的利润超过其FCF的程度。
Therefore, it's actually considered a good thing when a company has a negative accrual ratio, but a bad thing if its accrual ratio is positive. While it's not a problem to have a positive accrual ratio, indicating a certain level of non-cash profits, a high accrual ratio is arguably a bad thing, because it indicates paper profits are not matched by cash flow. Notably, there is some academic evidence that suggests that a high accrual ratio is a bad sign for near-term profits, generally speaking.
因此,当公司的应计比率为负时,这实际上被认为是一件好事,但如果其应计比率为正,则是一件坏事。虽然正应计比率表明非现金利润达到一定水平不是问题,但高应计比率可以说是一件坏事,因为它表明纸面利润与现金流不匹配。值得注意的是,有一些学术证据表明,总的来说,高应计率对短期利润来说是个坏兆头。
Over the twelve months to December 2023, Centene recorded an accrual ratio of -0.18. That implies it has very good cash conversion, and that its earnings in the last year actually significantly understate its free cash flow. In fact, it had free cash flow of US$7.3b in the last year, which was a lot more than its statutory profit of US$2.70b. Centene shareholders are no doubt pleased that free cash flow improved over the last twelve months. However, that's not all there is to consider. We can see that unusual items have impacted its statutory profit, and therefore the accrual ratio.
在截至2023年12月的十二个月中,Centene的应计比率为-0.18。这意味着它的现金转化率非常好,而且其去年的收益实际上大大低估了其自由现金流。实际上,它去年的自由现金流为73亿美元,远远超过其27.0亿美元的法定利润。毫无疑问,Centene的股东对过去十二个月自由现金流的改善感到高兴。但是,这还不是要考虑的全部。我们可以看到,不寻常的项目影响了其法定利润,从而影响了应计比率。
That might leave you wondering what analysts are forecasting in terms of future profitability. Luckily, you can click here to see an interactive graph depicting future profitability, based on their estimates.
这可能会让你想知道分析师对未来盈利能力的预测。幸运的是,您可以单击此处查看根据他们的估计描绘未来盈利能力的交互式图表。
The Impact Of Unusual Items On Profit
不寻常物品对利润的影响
Centene's profit was reduced by unusual items worth US$685m in the last twelve months, and this helped it produce high cash conversion, as reflected by its unusual items. This is what you'd expect to see where a company has a non-cash charge reducing paper profits. It's never great to see unusual items costing the company profits, but on the upside, things might improve sooner rather than later. We looked at thousands of listed companies and found that unusual items are very often one-off in nature. And that's hardly a surprise given these line items are considered unusual. Assuming those unusual expenses don't come up again, we'd therefore expect Centene to produce a higher profit next year, all else being equal.
在过去的十二个月中,Centene的利润因价值6.85亿美元的不寻常物品而减少,这帮助其产生了很高的现金转化率,其不寻常的物品就反映了这一点。这就是你所期望看到的公司的非现金费用会减少纸面利润的情况。看到不寻常的项目使公司利润付出代价从来都不是一件好事,但从好的方面来看,情况可能迟早会好转。我们调查了数千家上市公司,发现不寻常的物品本质上往往是一次性的。鉴于这些单列项目被认为不寻常,这并不奇怪。假设这些不寻常的支出不会再次出现,因此,在其他条件相同的情况下,我们预计Centene明年将产生更高的利润。
Our Take On Centene's Profit Performance
我们对Centene盈利表现的看法
Considering both Centene's accrual ratio and its unusual items, we think its statutory earnings are unlikely to exaggerate the company's underlying earnings power. Based on these factors, we think Centene's earnings potential is at least as good as it seems, and maybe even better! While it's really important to consider how well a company's statutory earnings represent its true earnings power, it's also worth taking a look at what analysts are forecasting for the future. Luckily, you can check out what analysts are forecasting by clicking here.
考虑到Centene的应计比率及其不寻常的项目,我们认为其法定收益不太可能夸大公司的基础盈利能力。基于这些因素,我们认为Centene的盈利潜力至少和看起来一样好,甚至可能更好!尽管考虑公司的法定收益如何代表其真正的盈利能力非常重要,但也值得一看分析师对未来的预测。幸运的是,您可以点击此处查看分析师的预测。
Our examination of Centene has focussed on certain factors that can make its earnings look better than they are. And it has passed with flying colours. But there is always more to discover if you are capable of focussing your mind on minutiae. Some people consider a high return on equity to be a good sign of a quality business. So you may wish to see this free collection of companies boasting high return on equity, or this list of stocks that insiders are buying.
我们对Centene的审查侧重于某些可能使其收益看起来好于实际的因素。而且它已经以优异的成绩过去了。但是,如果你能够将注意力集中在细节上,总会有更多的事情需要发现。有些人认为高股本回报率是优质业务的好兆头。因此,你可能希望看到这份免费收藏的拥有高股本回报率的公司,或者这份内部人士正在购买的股票清单。
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Simply Wall St的这篇文章本质上是笼统的。我们仅使用公正的方法根据历史数据和分析师的预测提供评论,我们的文章无意作为财务建议。它不构成买入或卖出任何股票的建议,也没有考虑到您的目标或财务状况。我们的目标是为您提供由基本数据驱动的长期重点分析。请注意,我们的分析可能不考虑最新的价格敏感型公司公告或定性材料。简而言之,华尔街没有持有任何上述股票的头寸。