Health Net Earnings Preview

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Investors braced for a bumpy ride ahead of Health Net's (NYS: HNT) earnings announcement, as the company has wavered between beating and falling short of analyst predictions during the past fiscal year. The company will unveil its latest earnings on Wednesday, Nov. 2. Health Net is an integrated managed care organization that delivers managed health-care services.

What analysts say:

  • Buy, sell, or hold?: Analysts think investors should stand pat on Health Net, with 11 of 15 analysts rating it hold. Analysts don't like Health Net as much as competitor WellCare Health Plans overall. Two out of 11 analysts rate WellCare Health Plans a buy compared to two out of 15 for Health Net. While analysts still rate the stock a hold, they are a little more optimistic about it compared to three months ago.
  • Revenue forecasts: On average, analysts predict $2.75 billion in revenue this quarter. That would represent a decline of 18.9% from the year-ago quarter.
  • Wall Street earnings expectations: The average analyst estimate is earnings of $0.83 per share. Estimates range from $0.67 to $0.97.

What our community says:
CAPS All-Stars are solidly backing the stock, with 83.9% giving it an outperform rating. The community at large agrees with the All-Stars, with 75.6% awarding it a rating of outperform. Fools have embraced Health Net, though the message boards have been quiet lately, with only 47 posts in the past 30 days. Health Net's bearish CAPS rating of two out of five stars falls short of the Fool community sentiment.

Management:

Now let's look at how efficient management is at running the business. Traditionally, margins represent the efficiency with which companies capture portions of sales dollars. The following table shows net margins over the past four quarters.

Quarter

Q2

Q1

Q4

Q3

Net Margin

2.1%

(3.1%)

2.4%

1.8%

One final thing: If you want to keep tabs on Health Net movements, and for more analysis on the company, make sure you add it to your Watchlist.

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At the time this article was published

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