CVS Health (CVS) AI Stock Analysis

• Market Cap: $90.43B
• Dividend Yield: 3.73%
• Average Volume (3M): 8.27M
• Price to Earnings (P/E): 19.9
• Beta (1Y): 0.48
• Revenue Growth: 6.27%
• EPS Growth: -36.28%
• Country: US
• Employees: 219,000
• Sector: Healthcare
• Sector Strength: 47
• Industry: Medical - Healthcare Plans
• EPS (TTM): 1.81
• Shares Outstanding: 1,268,326,400
• 10 Day Avg. Volume: 6,375,493
• 30 Day Avg. Volume: 8,272,289
• PEG Ratio: N/A
• Price to Book (P/B): 0.00
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 0.00
• Enterprise Value/Market Cap: 1.73
• Enterprise Value/Revenue: 0.40
• Enterprise Value/Gross Profit: 2.92
• Enterprise Value/Ebitda: 12.01
• 1Y Price Target: $83.13
• Price Target Upside: 16.59% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 15

• Rating: 77 Outperform
• Price Target: $81.00 ▲(13.60% Upside)

CVS Health's strong technical momentum and positive earnings outlook are the most significant factors driving the score. While financial performance is solid, there is room for improvement in profitability. The valuation is reasonable, and the earnings call provided a positive outlook despite some challenges.

Positive Factors

Analyst Upgrade

Analyst upgrades CVS from Neutral to Buy, following two strong consecutive quarters of execution and early signs that the Healthcare Benefits (HCB) segment fixes are on track.

Contract Wins

CVS Caremark wins contract from OptumRx, providing outpatient prescription drug benefits for approximately 587K members enrolled in Basic or Medicare HMO and PPO plans.

Earnings Guidance

Management has increased the adjusted EPS guidance for 2025, indicating confidence in future performance.

Negative Factors

Operating Income Decline

There is an expectation of a decline in adjusted operating income for PCW in the second half of the year.

Stars Results and Drug Pricing

There remain several key risks to the stock, with Stars results and potential most favored nation drug pricing being immediate concerns.

CVS Health Business Overview & Revenue Model

Company Description

CVS Health Corporation provides health services in the United States. The company's Health Care Benefits segment offers traditional, voluntary, and consumer-directed health insurance products and related services. It serves employer groups, individuals, college students, part-time and hourly workers, health plans, health care providers, governmental units, government-sponsored plans, labor groups, and expatriates. Its Pharmacy Services segment offers pharmacy benefit management solutions, including plan design and administration, formulary management, retail pharmacy network management, mail order pharmacy, specialty pharmacy and infusion, clinical, and disease and medical spend management services. It serves employers, insurance companies, unions, government employee groups, health plans, prescription drug plans, Medicaid managed care plans, plans offered on public health insurance and private health insurance exchanges, other sponsors of health benefit plans, and individuals. This segment operates retail specialty pharmacy stores; and specialty mail-order, mail-order dispensing, and compounding pharmacies, as well as branches for infusion and enteral nutrition services. The company's Retail/LTC segment sells prescription and over-the-counter drugs, consumer health and beauty products, and personal care products; and provides health care services through its MinuteClinic walk-in medical clinics. This segment also distributes prescription drugs; and provides related pharmacy consulting and other ancillary services to care facilities and other care settings. As of December 31, 2021, it operated approximately 9,900 retail locations and 1,200 MinuteClinic locations, as well as online retail pharmacy websites, LTC pharmacies, and onsite pharmacies. The company was formerly known as CVS Caremark Corporation and changed its name to CVS Health Corporation in September 2014. CVS Health Corporation was founded in 1963 and is headquartered in Woonsocket, Rhode Island.

How the Company Makes Money

CVS Health generates revenue through multiple streams. The retail pharmacy segment earns money by selling prescription medications and a wide range of health and wellness products in its stores. The pharmacy services segment derives income from managing prescription drug benefits for employers, insurance companies, and other health plan sponsors. Additionally, CVS Health's health care benefits segment, which includes its Aetna subsidiary, provides health insurance products and services, contributing significantly to overall revenue. Key partnerships with pharmaceutical manufacturers and collaborations with various healthcare providers enhance its service offerings and can lead to increased earnings. The integration of in-store clinics and telehealth services also plays a role in diversifying revenue and attracting more customers.

CVS Health Financial Statement Overview

Summary

CVS Health demonstrates solid revenue growth and effective cash management, though profitability margins and return on equity could be improved. The balance sheet is stable, with moderate leverage, supporting long-term financial health. Overall, CVS Health is positioned well in the healthcare sector but should focus on enhancing profitability metrics.

Income Statement

CVS Health has shown consistent revenue growth over recent periods, with a TTM revenue increase of 3.71% compared to the previous year. The company's gross profit margin remains steady at around 13.8% and the EBIT margin improved slightly to 2.3%. However, net profit margins are relatively low at 1.2%, indicating room for profitability enhancement.

Balance Sheet

The balance sheet reflects a stable equity base with a debt-to-equity ratio of approximately 1.07, suggesting moderate leverage. The equity ratio stands at 29.9%, pointing to a solid capital structure. Return on equity is modest at 5.9%, indicating potential for improved shareholder returns.

Cash Flow

Cash flows are robust, with a TTM operating cash flow to net income ratio of 1.67, showing strong cash generation relative to earnings. Free cash flow has decreased, but the free cash flow to net income ratio is healthy at 1.05, suggesting efficient cash utilization despite recent declines.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	386.64B	372.81B	357.78B	322.47B	292.11B	268.71B
Gross Profit	53.45B	51.40B	54.43B	54.50B	52.12B	49.05B
EBITDA	13.01B	13.68B	18.20B	12.35B	17.53B	17.12B
Net Income	4.53B	4.61B	8.34B	4.31B	8.00B	7.18B
Balance Sheet
Total Assets	258.34B	253.22B	249.73B	228.28B	233.00B	230.72B
Cash, Cash Equivalents and Short-Term Investments	14.22B	10.99B	11.46B	15.72B	12.53B	10.85B
Total Debt	82.72B	82.92B	79.39B	70.73B	76.00B	85.04B
Total Liabilities	180.79B	177.49B	173.09B	156.51B	157.62B	161.01B
Stockholders Equity	77.38B	75.56B	76.46B	71.47B	75.08B	69.39B
Cash Flow
Free Cash Flow	4.78B	6.33B	10.39B	13.45B	15.74B	13.43B
Operating Cash Flow	7.57B	9.11B	13.43B	16.18B	18.27B	15.87B
Investing Cash Flow	-5.68B	-7.61B	-20.89B	-5.05B	-5.26B	-5.53B
Financing Cash Flow	-2.68B	-1.14B	2.68B	-10.52B	-11.36B	-7.70B

CVS Health Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 71.30
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Negative
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For CVS, the sentiment is Positive. The current price of 71.3 is above the 20-day moving average (MA) of 65.52, above the 50-day MA of 65.12, and above the 200-day MA of 60.13, indicating a bullish trend. The MACD of 2.10 indicates Negative momentum. The RSI at 73.47 is Negative, neither overbought nor oversold. The STOCH value of 90.64 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for CVS.

CVS Health Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
CVS	77 Outperform	$90.43B	19.89	5.95%	3.73%	6.27%	-36.28%
UNH	73 Outperform	$278.42B	13.32	23.14%	2.77%	9.98%	52.31%
HUM	71 Outperform	$36.02B	22.99	9.03%	1.18%	9.88%	-7.25%
ELV	71 Outperform	$69.72B	13.18	12.48%	2.11%	10.21%	-17.79%
MOH	70 Outperform	$9.37B	8.60	23.93%	―	16.12%	10.99%
CNC	63 Neutral	$14.44B	7.27	7.50%	―	12.96%	-23.25%
Sector *	51 Neutral	$7.88B	-0.12	-39.83%	2.18%	21.38%	-1.56%

CVS Health Corporate Events

CVS Health Issues $4 Billion in Senior Notes

On August 11, 2025, CVS Health Corporation entered into an Underwriting Agreement to issue and sell $4 billion in senior notes with varying maturity dates and interest rates, including 5.000% Senior Notes due 2032 and 6.250% Senior Notes due 2065. The issuance, completed on August 15, 2025, is expected to yield net proceeds of approximately $3.96 billion, which may impact the company’s financial strategy and market positioning by potentially enhancing its capital structure.