Jim Cramer On Centene's 40% Crash: Fewer ACA Signups, Sicker Patients, Pulled Guidance And Major Earnings Hit Trigger Selloff: 'This Is Horrifying'

Shares of managed care provider Centene Corp. CNC dropped over 40% on Wednesday, marking the worst single-day performance in the company's history.

Check out the current price of CNC stock here.

What Happened: On CNBC’s Mad Money, Jim Cramer referred to the collapse as “a huge hit,” resulting from a combination of factors such as weak Affordable Care Act enrollments, an actuarial report pointing to sicker patients, and the company’s decision to pull its 2025 outlook.

“Companies make forecasts, they’re supposed to try and beat them,” Cramer says, however, “they rarely pull them.”

According to Cramer, Centene disclosed data from an independent actuarial firm covering 22 of the 29 states where it operates ACA exchange plans.

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The findings showed that overall marketplace enrollment growth was lower than expected and that those who did enroll were in poorer health than projected, a combination that significantly affects the company's bottom line, thus prompting the company to pull its guidance.

As a result, the company now expects a $1.8 billion reduction in its projected risk adjustment revenue from the federal government. This drop is expected to slash its 2025 earnings by $2.75 per share.

“This is horrifying,” Cramer said, referring to the sharp revision in Centene’s EPS, from $7.25 per share projected earlier. “We’re talking about a 35% to 40% hit to their numbers,” Cramer says, “no wonder the stock was eviscerated.”

Why It Matters: Centene’s decision to withdraw its guidance, citing the independent actuarial report, led to a sector-wide selloff on Wednesday.

All of Centene’s peers and competitors in the managed care business, such as Molina Healthcare Inc. MOH, Elevance Health Inc. ELV, UnitedHealth Group Inc. UNH, and Cigna Group CI, among others, all falling in tandem during the day.

This comes amid a potential amendment in the Affordable Care Act, which could lead to an additional $313 billion in spending cuts by blocking able-bodied adults without dependent children in Medicaid expansion states from receiving the enhanced 9-to-1 Federal Medical Assistance Percentage (FMAP).

Insurers have also warned of higher premiums in 2026, placing the blame on President Donald Trump’s tariffs, which are expected to increase the cost of prescription drugs, medical devices, and other medical products and services.

Price Action: Shares of Centene dropped 40.37% on Wednesday, closing at $33.78, but are up 1.10% after hours.

According to Benzinga’s Edge Stock Rankings, Centene scores well on Value and Growth, but has an unfavorable price trend in the short, medium and long term. Click here for deeper insights on the stock, as well as its peers and competitors in the managed care space.

Photo courtesy: katz / Shutterstock.com

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