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What to Expect for WellCare Health's (WCG) Earnings in Q3

Zacks Equity Research

WellCare HealthPlans, Inc.'s WCG is scheduled to release third-quarter 2019 results on Oct 30.

The Zacks Consensus Estimate for earnings is pegged at $3.93, indicating 18% rise from the year-ago reported figure. The consensus estimate for third-quarter revenues stands at $6.8 billion, suggesting a 34.8% surge from the year-earlier reported number.

In the last reported quarter, WellCare Health delivered adjusted operating earnings of $4.31 per share, beating the Zacks Consensus Estimate by 5.1% on the back of solid revenues and higher membership. Also, the bottom line improved nearly 17% year over year.

The company flaunts an impressive surprise history, having delivered an earnings beat in all the trailing four quarters, the average being 9.36%.

What to Expect for Q3 Earnings

The company’s third-quarter results are likely to reflect higher membership, leading to revenue growth. Its overall performance is expected to have been supported by organic growth across all its businesses, thus retaining the momentum from the sequential quarter.

WellCare Health is also likely to have benefited from a rise in its quarterly premiums. The consensus mark for the metric implies an uptick of 32% from the prior-year reported figure.

Its Medicaid membership is expected to have increased in the third quarter owing to organic growth in the markets like Florida and Arizona. WellCare Health is also likely to have witnessed growth in Medicaid premium revenues on the back of its strategic moves.

However, the company’s hiked expenses are expected to partly reflect on its earnings numbers in the impending release.

Key Developments in Q3

WellCare Health’s Missouri and Nebraska Medicaid plans will be sold to Anthem, Inc. This move is related to the $17-billion worth pending merger of Centene Corporation with WellCare Health, which will be closed in the first half of 2020. Subject to certain pending approvals, this deal will help Anthem add around 300000 Medicaid members to its portfolio.

In September, WellCare Health and Centene announced that both got nods from the insurance departments of 17 states related to the pending merger.

What the Quantitative Model Predicts

Our proven model does not conclusively predict an earnings beat for WellCare Health this season. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. But that’s not the case here. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Earnings ESP: WellCare Health has an Earnings ESP of -1.61%. This is because the Most Accurate Estimate is pegged at $3.87, lower than the Zacks Consensus Estimate of $3.93.  You can see the complete list of today’s Zacks #1 Rank stocks here.

WellCare Health Plans, Inc. Price and EPS Surprise

WellCare Health Plans, Inc. Price and EPS Surprise

WellCare Health Plans, Inc. price-eps-surprise | WellCare Health Plans, Inc. Quote

Zacks Rank: WellCare Health carries a Zacks Rank #3, which increases the predictive power of ESP. However, the company’s negative ESP makes surprise prediction difficult for the stock this time around.

Stocks to Consider

Some stocks worth considering from the medical sector with the perfect mix of elements to surpass estimates in the next releases are as follows:

Mednax, Inc MD is set to report third-quarter earnings on Nov 1. The stock has a Zacks Rank of 3 and an Earnings ESP of +1.10%.

AmerisourceBergen Corporation ABC is slated to announce third-quarter earnings on Nov 7. The stock has an Earnings ESP of +0.55% and is Zacks #3 Ranked.

Acadia Healthcare Company, Inc. ACHC is set to report third-quarter earnings on Nov 5. The stock is Zacks #3 Ranked and an Earnings ESP of +1.34%.

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WellCare Health Plans, Inc. (WCG) : Free Stock Analysis Report
 
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