Centene Corporation (CNC) vs Salesforce, Inc. (CRM): Which Is the Better Buy in 2026?
As of 2026-06-19, CNC is undervalued at $61, with a DCF intrinsic value of $892 and a margin of safety of 93%. CRM is undervalued at $152, with an intrinsic value of $274 and a margin of safety of 45%. Of the two, CNC has the wider margin of safety.
Rewards
- ★Share count has been reduced by 11% over the past 4 years through buybacks, increasing each share's claim on earnings.
- ★FCF yield of 22.7% is historically attractive — the business generates significant cash relative to its price.
- ★Net debt/EBITDA of -2.5x means the company holds more cash than debt — a net cash position.
- ★Gross margin of 77.6% indicates strong pricing power — typical of businesses with significant intellectual property or brand strength.
- ★Free cash flow has grown at a 31.6% CAGR over the past 4 years, demonstrating strong earnings power growth.
- ★Each dollar of retained earnings has created $5.53 of earning power — management is an exceptional capital allocator.
Risks
- ⚠ROIC has declined by 5.5 percentage points over the past 4 years, which may signal competitive erosion.
- ⚠Gross margin of 10.6% is low, suggesting a competitive or commodity-like market with limited pricing power.
- ⚠Insiders have sold $5.2M worth of stock in the past 3 months — significant insider liquidation.
Key Valuation Metrics
Learn more →Historical Fundamentals
Learn more →Price ÷ Earnings Per Share — how many years of current earnings you're paying for at today's price. Lower P/E may indicate undervaluation. The dashed forward point is the forward P/E — today's price ÷ analyst consensus EPS.
Price ÷ Earnings Per Share — how many years of current earnings you're paying for at today's price. Lower P/E may indicate undervaluation. The dashed forward point is the forward P/E — today's price ÷ analyst consensus EPS.
Price ÷ Earnings Per Share — how many years of current earnings you're paying for at today's price. Lower P/E may indicate undervaluation. The dashed forward point is the forward P/E — today's price ÷ analyst consensus EPS.
$1 Retained Earnings Test
Learn more →> $1 created per $1 retained = Value Creator · < $1 created = Value Destroyer
> $1 created per $1 retained = Value Creator · < $1 created = Value Destroyer
Buffett's "$1 Test": For every $1 of earnings retained, has management created at least $1 of market value?
> $1 created per $1 retained = Value Creator · < $1 created = Value Destroyer
Discounted Cash Flow (DCF) Analysis
Learn more →Reverse DCF — Market-Implied Growth
Learn more →What growth rate is the market pricing in at $61?
Market below historical growth — potential opportunity.
What growth rate is the market pricing in at $152?
The market implies +3.6% Owner Earnings growth, below historical trends — potential opportunity.
Standard FCF implies a more demanding -2.8%, reflecting heavy growth investment expected to generate future returns.
Economic Moat Score
Learn more →Narrow moat with reinvestment efficiency as the key competitive advantage. Improving margin stability would strengthen the moat.
Narrow moat with revenue predictability as the key competitive advantage. Improving roic consistency would strengthen the moat.
Forensic Accounting
Learn more →M-Score Trend
M-Score Trend
Beneish's 8-variable model estimates the probability of earnings manipulation. An M-Score above -1.78 signals elevated risk — companies in this range have historically been 3-5× more likely to be manipulating earnings. Scores between -2.22 and -1.78 fall in a grey zone warranting further investigation.
Ownership Breakdown
Learn more →High insider ownership aligns management incentives with shareholders. Institutional concentration can indicate smart-money conviction but also crowding risk.
Insider Buying Activity
Learn more →Open market purchases · includes direct & indirect ownership · excludes option exercises.
Insider Selling Activity
Learn more →Direct ownership only · excludes indirect, option exercises, planned (10b5-1) sales & derivatives.
🎭 Mr. Market's Mood
Learn more →"Market is pricing this stock without strong emotion in either direction"
"Mr. Market is panicking — potential buying opportunity if fundamentals are strong"
Composite sentiment score based on market signals. Inspired by Buffett’s "Mr. Market" allegory — fear = potential opportunity, greed = potential risk. Must be used alongside fundamental analysis, not in isolation.
⚖️ Buffett Signal
Learn more →The Buffett Signal cross-references market sentiment with DCF valuation. Configure the DCF Analysis above to generate a signal.
The Buffett Signal cross-references market sentiment with DCF valuation. Configure the DCF Analysis above to generate a signal.
Frequently Asked Questions: CNC vs CRM
Is Centene Corporation or Salesforce, Inc. more undervalued in 2026?▼
Based on our discounted cash flow model, CNC trades at a 93.2% margin of safety (intrinsic value $892 vs. price $61), compared to CRM's 44.5% margin of safety (intrinsic $274 vs. $152).
Which stock has a wider economic moat, Centene Corporation or Salesforce, Inc.?▼
CRM scores 58/100 (Narrow moat), while CNC scores 41/100 (Narrow moat). The moat score measures competitive advantage durability across ROIC consistency, margin stability, revenue predictability, and reinvestment efficiency.
Is Salesforce, Inc. in financial distress?▼
CRM's Altman Z-Score of 2.4 places it in the Grey zone, signaling elevated bankruptcy risk. CNC scores 3.0 (Grey zone). The Altman Z-Score is a five-factor model that predicts insolvency within two years; scores below 1.81 indicate significant distress.
Which company has better free cash flow, Centene Corporation or Salesforce, Inc.?▼
Centene Corporation (CNC) generates a 22.7% free cash flow yield, compared to Salesforce, Inc.'s 13.3%. A higher FCF yield means the business converts more of its market value into cash that can be returned to shareholders or reinvested.
Which stock has higher return on invested capital, Centene Corporation or Salesforce, Inc.?▼
CNC earns 18.8% ROIC versus CRM's 9.6%. A higher ROIC means the company generates more profit per dollar of capital employed, a hallmark of durable competitive advantage in Buffett-style analysis.