CVS Health (CVS) AI Stock Analysis

• Market Cap: $99.49B
• Dividend Yield: 3.41%
• Average Volume (3M): 9.40M
• Price to Earnings (P/E): 56.2
• Beta (1Y): 0.47
• Revenue Growth: 6.71%
• EPS Growth: -90.11%
• Country: US
• Employees: 219,000
• Sector: Healthcare
• Sector Strength: 45
• Industry: Medical - Healthcare Plans
• EPS (TTM): 1.09
• Shares Outstanding: 1,272,211,000
• 10 Day Avg. Volume: 8,189,434
• 30 Day Avg. Volume: 9,400,586
• PEG Ratio: -0.92
• Price to Book (P/B): 1.34
• Price to Sales (P/S): 0.25
• P/FCF Ratio: 12.88
• Enterprise Value/Market Cap: 1.85
• Enterprise Value/Revenue: 0.46
• Enterprise Value/Gross Profit: 3.33
• Enterprise Value/Ebitda: 18.67
• 1Y Price Target: $96.24
• Price Target Upside: 23.78% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 18
• EPS Forecast (FY): 7.17
• Revenue Forecast (FY): $405.78B

• Rating: 55 Neutral
• Price Target: $78.00 ▲(0.32% Upside)

The score is held back primarily by sharply weakened profitability and a very high P/E valuation, despite solid cash generation. Reaffirmed 2026 guidance and operational improvements (notably Aetna and pharmacy momentum) provide support, while technical indicators point to mildly negative near-term momentum.

Positive Factors

Diversified business model and scale

CVS’s integrated mix of retail pharmacy, PBM (Caremark) and Aetna insurance creates durable revenue diversification and large scale. Record revenues reflect cross-selling and operational synergies that support stable cash flows and resilience to single-segment shocks over coming quarters.

Strong free cash flow generation

Material FCF growth improves CVS’s ability to fund investments, pay dividends, and service debt. Robust cash generation enhances strategic optionality for technology, clinic investments and buybacks, and provides a buffer against episodic margin pressure or regulatory-driven cost increases.

Medicare Advantage quality leadership

Strong Star ratings translate into higher quality bonus payments, better beneficiary retention, and competitive positioning in Medicare Advantage. This structural advantage supports durable membership growth and steadier risk-adjusted revenue versus lower-rated peers.

Negative Factors

Severe profitability compression and low ROE

Sharp margin compression and near-zero ROE indicate weak conversion of sales into shareholder returns despite scale. Sustained low profitability reduces reinvestment returns, limits margin of safety for strategic moves, and makes long-term EPS growth targets harder to achieve without efficiency gains.

Large goodwill impairment in Health Care Delivery

A sizable goodwill write-down signals overpaid acquisitions or execution shortfalls in the Health Care Delivery segment. This weakens book equity, constrains future return on invested capital, and suggests structural challenges integrating or scaling clinic assets profitably over the medium term.

Regulatory and antitrust scrutiny of PBM practices

Intensified antitrust scrutiny of PBM conduct risks regulatory remedies, restrictions on contracting practices, and legislative changes that could structurally reduce PBM margin and negotiating leverage. Potential remedies would affect long-term revenue and competitive positioning in drug distribution.

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 primarily through three key streams: retail pharmacy sales, pharmacy benefits management (PBM), and health insurance services. Retail pharmacy sales contribute significantly to revenue through the dispensing of prescription medications and over-the-counter products. The PBM segment, which manages prescription drug benefits for employers and health plans, generates revenue through service fees and rebates from drug manufacturers. The health insurance division, primarily through Aetna, earns revenue from premiums paid by members for various health plans. Additionally, CVS Health benefits from strategic partnerships with pharmaceutical companies, healthcare providers, and other stakeholders, enhancing its service offerings and revenue potential.

CVS Health Financial Statement Overview

Summary

Revenue is growing, and cash generation is solid (2025 operating cash flow $10.6B; free cash flow $7.8B), but profitability has deteriorated sharply (net income down to $1.8B in 2025 and margins compressed). The balance sheet is serviceable yet meaningfully levered (~$80B debt; debt-to-equity ~1.06), making earnings recovery important.

Income Statement

Revenue has grown steadily over the last several years (about +4% in 2024 and accelerating to ~+8% in 2025), but profitability has deteriorated sharply. Net income fell from $8.3B (2023) to $4.6B (2024) and then to $1.8B (2025), driving net margins down to ~0.4% in 2025 versus ~2.3% in 2023. Gross margin has also compressed (roughly 18% in 2020–2021 to ~13.8% in 2024–2025), and operating profitability is notably weaker than prior years, which weighs heavily on earnings quality despite ongoing top-line expansion.

Balance Sheet

The balance sheet looks serviceable but levered. Total debt is sizable at ~$80B in 2025, with debt running slightly above equity (debt-to-equity ~1.06 in 2025), broadly in line with recent years. Equity has remained relatively stable (~$75B), which supports financial flexibility, but returns on equity have dropped meaningfully (from ~11% in 2021–2023 to ~6% in 2024 and ~2% in 2025), reflecting weaker profitability rather than balance sheet expansion. Leverage is manageable for the scale of the business, but the declining returns increase risk if earnings don’t recover.

Cash Flow

Cash generation remains a relative strength. Operating cash flow was $10.6B in 2025 (up from $9.1B in 2024) and free cash flow increased to $7.8B (strong growth vs. 2024), indicating improved cash conversion year over year. However, free cash flow is still below earlier peaks (e.g., ~$13–$16B in 2020–2022), and free cash flow as a share of net income fell to ~0.73 in 2025 (from ~0.83–0.86 in 2020–2022), suggesting cash flow is not fully keeping pace with reported earnings dynamics. Overall, the company is still producing solid cash, but the trend is less consistent versus earlier years.

Breakdown	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	402.07B	372.81B	357.78B	322.47B	292.11B
Gross Profit	55.36B	51.40B	54.43B	54.50B	52.12B
EBITDA	9.86B	13.68B	18.20B	12.35B	17.53B
Net Income	1.77B	4.61B	8.34B	4.31B	8.00B
Balance Sheet
Total Assets	261.06B	253.22B	249.73B	228.28B	233.00B
Cash, Cash Equivalents and Short-Term Investments	10.66B	10.99B	11.46B	15.72B	12.53B
Total Debt	93.59B	82.92B	79.39B	70.73B	76.00B
Total Liabilities	185.68B	177.49B	173.09B	156.51B	157.62B
Stockholders Equity	75.21B	75.56B	76.46B	71.47B	75.08B
Cash Flow
Free Cash Flow	7.81B	6.33B	10.39B	13.45B	15.74B
Operating Cash Flow	10.64B	9.11B	13.43B	16.18B	18.27B
Investing Cash Flow	-5.87B	-7.61B	-20.89B	-5.05B	-5.26B
Financing Cash Flow	-4.94B	-1.14B	2.68B	-10.52B	-11.36B

CVS Health Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 77.75
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

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 77.75 is above the 20-day moving average (MA) of 77.42, below the 50-day MA of 78.13, and above the 200-day MA of 71.62, indicating a neutral trend. The MACD of -0.22 indicates Negative momentum. The RSI at 50.44 is Neutral, neither overbought nor oversold. The STOCH value of 79.13 is Neutral, 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
UNH	65 Neutral	$261.87B	21.84	―	2.69%	10.48%	24.25%
ELV	65 Neutral	$76.09B	13.68	13.29%	1.99%	11.96%	-11.11%
CVS	55 Neutral	$99.49B	56.22	2.35%	3.41%	6.71%	-90.11%
Sector *	51 Neutral	$7.86B	-0.30	-43.30%	2.27%	22.53%	-2.21%
CNC	51 Neutral	$20.27B	-3.16	-28.79%	―	14.92%	-286.72%
MOH	48 Neutral	$6.99B	16.67	11.02%	―	13.71%	-18.02%
HUM	46 Neutral	$22.25B	18.80	6.98%	1.38%	9.87%	-5.58%

CVS Health Corporate Events

CVS Health Unveils Strategic Vision at Investor Day

On December 9, 2025, CVS Health held its 2025 Investor Day, where it updated its financial guidance for 2025 and provided projections for 2026, highlighting a strategic focus on transforming consumer experiences and leveraging its enterprise capabilities. The company aims for a mid-teens Adjusted EPS CAGR through 2028 and announced a new open consumer engagement platform to simplify care and improve health. This strategic direction is expected to enhance CVS Health’s role in the healthcare sector, offering significant value to stakeholders and positioning the company as a central player in shaping the future of healthcare.

The most recent analyst rating on (CVS) stock is a Buy with a $87.00 price target. To see the full list of analyst forecasts on CVS Health stock, see the CVS Stock Forecast page.

CVS Health Appoints J. David Joyner as Board Chair

On November 20, 2025, CVS Health announced the appointment of J. David Joyner as Chair of the Board, effective January 1, 2026. Joyner, who became President and CEO in October 2024, has driven significant improvements in the company’s performance. The Board believes his leadership will help execute long-term strategies and create stockholder value. This move reflects CVS Health’s commitment to simplifying healthcare and delivering better health outcomes across the country.

The most recent analyst rating on (CVS) stock is a Buy with a $102.00 price target. To see the full list of analyst forecasts on CVS Health stock, see the CVS Stock Forecast page.