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CVS Health Corp (CVS)
NYSE:CVS
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CVS Health
(NYSE:CVS)
67Neutral
Positive Factors
Earnings Guidance
CVS beat Q1 and increased guidance, but has modestly underperformed despite what was seen as a very constructive update.
Financial Performance
CVS's improving profitability could drive multiple expansion, with more positive fundamental momentum and more tailwinds than headwinds across the business.
Health Care Benefits
CVS is well positioned to see material Health Care Benefits upside due to its conservative view on trends and favorable first-quarter results.
Negative Factors
Earnings Quality
Uncertainty around earnings quality is likely a reason for CVS's modest underperformance.
Operational Challenges
There are still some moving pieces like elevated utilization and challenges with Oak Street/Signify.
PBM Reform
Headline risk could arise around PBM reform/legislation seeking to break up PBM ownership of pharmacies.
CVS Health (CVS) vs. S&P 500 (SPY)
Market Cap
$79.10B
Dividend Yield4.25%
Average Volume (3M)11.81M
Price to Earnings (P/E)14.9
Beta (1Y)0.49
Revenue Growth4.84%
EPS Growth-26.54%
CountryUS
Employees219,000
SectorHealthcare
Sector Strength41
IndustryMedical - Healthcare Plans
Share Statistics
EPS (TTM)2.25
Shares Outstanding1,265,019,400
10 Day Avg. Volume11,798,213
30 Day Avg. Volume11,814,217
Financial Highlights & Ratios
PEG Ratio1.11
Price to Book (P/B)1.10
Price to Sales (P/S)0.00
P/FCF Ratio14.26
Enterprise Value/Market Cap1.97
Enterprise Value/Revenue0.11
Enterprise Value/Gross Profit2.93
Enterprise Value/Ebitda2.61
Forecast
1Y Price Target
$80.13Price Target Upside28.15% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering17
CVS Health Business Overview & Revenue Model
Company DescriptionCVS 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 MoneyCVS Health generates revenue through multiple channels. The Pharmacy Services segment, which includes pharmacy benefit management services, specialty pharmacy, and mail order pharmacy, is a significant source of income. The Retail/LTC segment encompasses the sale of prescription drugs, over-the-counter medications, beauty products, and general merchandise through CVS Pharmacy stores and Long-Term Care facilities. The Health Care Benefits segment, primarily driven by Aetna, offers a wide array of health insurance products and services, including Medicare, Medicaid, and commercial health insurance plans. Revenue is further bolstered by strategic partnerships with healthcare providers and organizations, as well as initiatives aimed at integrating and expanding healthcare services across its platforms.
CVS Health Key Performance Indicators (KPIs)
Any
Revenue by Segment
Shows how much revenue each business segment contributes, highlighting which areas drive growth and profitability. This can indicate strategic focus and potential areas for expansion or divestment.
Shows how much revenue each business segment contributes, highlighting which areas drive growth and profitability. This can indicate strategic focus and potential areas for expansion or divestment.
Data provided by:
Main Street Data
Main Street DataCVS Health Financial Statement Overview
Summary
CVS Health demonstrates strong revenue growth and stable profitability, though challenged by rising operational costs and leverage. The company's solid equity position and cash flow generation support future growth prospects.Income Statement
CVS Health demonstrates strong revenue growth with a 17.5% increase from 2022 to 2025 TTM. The company's gross profit margin and net profit margin are stable, reflecting robust operational efficiency. However, the decline in EBIT margin from 2023 to 2025 TTM indicates rising operational costs. Despite this, EBITDA margin remains favorable, showcasing consistent earnings before major deductions.78
Positive
Balance Sheet
The balance sheet reflects a solid equity base with an equity ratio of approximately 30% in 2025 TTM, suggesting financial stability. However, the debt-to-equity ratio is relatively high at 1.06, indicating leverage risks. ROE is healthy, demonstrating efficient use of shareholder funds to generate net income.70
Positive
Cash Flow
CVS Health shows stable cash flow generation, with positive free cash flow and a high operating cash flow to net income ratio. However, free cash flow has decreased from 2022 to 2025 TTM, reflecting increased capital expenditures and potential challenges in maintaining cash flow growth.65
Positive
| Breakdown | |||||
| TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|
| Income Statement | Total Revenue | ||||
| 378.96B | 372.81B | 357.78B | 322.47B | 292.11B | 268.71B | Gross Profit |
| 53.24B | 51.40B | 54.43B | 54.50B | 52.12B | 49.05B | EBIT |
| 9.62B | 8.52B | 13.74B | 7.95B | 13.31B | 13.91B | EBITDA |
| 14.82B | 13.68B | 18.20B | 12.35B | 17.53B | 17.12B | Net Income Common Stockholders |
| 5.28B | 4.61B | 8.34B | 4.31B | 8.00B | 7.18B |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | ||||
| 12.65B | 10.99B | 11.46B | 15.72B | 12.53B | 10.85B | Total Assets |
| 255.59B | 253.22B | 249.73B | 228.28B | 233.00B | 230.72B | Total Debt |
| 81.21B | 82.92B | 79.39B | 70.73B | 76.00B | 85.04B | Net Debt |
| 71.14B | 74.33B | 71.19B | 57.79B | 66.59B | 77.19B | Total Liabilities |
| 178.47B | 177.49B | 173.09B | 156.51B | 157.62B | 161.01B | Stockholders Equity |
| 76.93B | 75.56B | 76.46B | 71.47B | 75.08B | 69.39B |
| Cash Flow | Free Cash Flow | ||||
| 5.94B | 6.33B | 10.39B | 13.45B | 15.74B | 13.43B | Operating Cash Flow |
| 8.76B | 9.11B | 13.43B | 16.18B | 18.27B | 15.87B | Investing Cash Flow |
| -6.28B | -7.61B | -20.89B | -5.05B | -5.26B | -5.53B | Financing Cash Flow |
| -2.24B | -1.14B | 2.68B | -10.52B | -11.36B | -7.70B |
CVS Health Technical Analysis
Positive
62.53
Price Trends
65.97
Negative
60.26
Positive
58.17
Positive
Market Momentum
-1.10
Positive
42.43
Neutral
21.35
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 62.53 is below the 20-day moving average (MA) of 65.18, below the 50-day MA of 65.97, and above the 200-day MA of 58.17, indicating a neutral trend. The MACD of -1.10 indicates Positive momentum. The RSI at 42.43 is Neutral, neither overbought nor oversold. The STOCH value of 21.35 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for CVS.
CVS Health Risk Analysis
CVS Health disclosed 47 risk factors in its most recent earnings report. CVS Health reported the most risks in the “Ability to Sell” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
CVS Health Peers Comparison
Overall Rating
UnderperformOutperform
Sector (52)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
77 Outperform | $30.74B | 9.20 | 12.59% | ― | 8.85% | 33.30% | |
74 Outperform | $85.74B | 17.78 | 12.37% | 1.78% | 25.21% | -29.37% | |
71 Outperform | $91.12B | 15.74 | 14.24% | 1.64% | 6.63% | -3.26% | |
67 Neutral | $79.10B | 14.94 | 7.00% | 4.25% | 4.84% | -26.54% | |
67 Neutral | $28.72B | 16.83 | 10.09% | 1.49% | 10.09% | -12.18% | |
66 Neutral | $264.80B | 12.20 | 24.33% | 2.88% | 8.68% | 45.24% | |
52 Neutral | $5.15B | 3.02 | -44.64% | 2.83% | 16.44% | -0.47% |
* Healthcare Sector Average
Performance Comparison
CVS
CVS Health
62.53
7.67
13.98%
CNC
Centene
61.78
-15.79
-20.36%
CI
Cigna
320.94
-6.80
-2.07%
HUM
Humana
237.96
-113.03
-32.20%
UNH
UnitedHealth
291.91
-217.18
-42.66%
ELV
Elevance Health
403.29
-130.64
-24.47%
CVS Health Earnings Call Summary
Earnings Call Date:May 01, 2025
(Q1-2025)
| % Change Since: -6.27%|
Next Earnings Date:Jul 30, 2025
Earnings Call Sentiment Neutral
CVS Health delivered strong financial results in Q1 2025 and increased its full-year EPS guidance, reflecting solid performance across all segments. The company is leading in market innovation with expanded access to GLP-1 medications and growth in pharmacy market share. However, challenges persist in individual exchange products, legislative impacts in Arkansas, and elevated medical cost trends. The overall sentiment is cautiously optimistic with strong highlights, but significant lowlights remain.Q1-2025 Updates
Positive Updates
Strong Financial Performance in Q1 2025
CVS Health reported first quarter adjusted earnings per share of $2.25 and adjusted operating income of $4.6 billion. Revenue for the quarter was nearly $95 billion, marking a 7% increase over the prior year.
Increased Full Year 2025 EPS Guidance
The company raised its full year 2025 adjusted EPS guidance to a range of $6 to $6.20, up from the previous range of $5.75 to $6, reflecting solid performance and execution across all business segments.
Expansion in GLP-1 Access
CVS announced a partnership with Novo Nordisk to increase access to Wegovy for members at a more affordable price, demonstrating the value of its integrated model and continuing leadership in market innovation.
Pharmacy Market Share Growth
Retail pharmacy script share in Q1 grew to approximately 27.6%, an increase of approximately 70 basis points from the same period last year, driven by strong execution and superior customer experiences.
Successful Leadership Transition
The appointments of Brian Newman as Chief Financial Officer and Amy Compton-Phillips as Chief Medical Officer are expected to support continued momentum and strategic execution.
Negative Updates
Challenges in Individual Exchange Products
CVS experienced continued underperformance from individual exchange products and plans to exit the states where Aetna independently operates ACA plans effective 2026, citing no near or long-term pathway for improvement.
Impact of Arkansas Legislation
Legislation in Arkansas could disrupt access to CVS pharmacies for thousands of patients, potentially increasing costs for employers and consumers, and affecting more than 10,000 people with complex conditions.
Elevated Medical Cost Trends
Medical cost trends remained high, especially in Medicare, including in-patient, outpatient, and medical pharmacy categories, although there are early signs of stabilization.
Potential Vaccine Demand Impact
CVS is monitoring potential changes in consumer sentiment towards vaccines that may impact market demand, particularly concerning COVID-19 vaccines.
Company Guidance
During the CVS Health Q1 2025 earnings call, the company reported a strong financial performance, with first quarter adjusted earnings per share (EPS) of $2.25 and adjusted operating income of $4.6 billion. CVS Health increased its full-year 2025 adjusted EPS guidance to a range of $6 to $6.20, up from the previous range of $5.75 to $6. The company generated nearly $95 billion in revenue, a 7% increase year-over-year, driven by growth across all segments. The healthcare benefits segment generated nearly $35 billion in revenue, an 8% increase, while the health services segment saw revenues of over $43 billion, reflecting an 8% growth. The pharmacy and consumer wellness segment recorded nearly $32 billion in revenues, an 11% increase compared to the prior year. CVS also processed and dispensed over 1.7 billion prescriptions annually, with a 7% increase in same-store prescription volumes. However, the company is exiting the individual exchange business in 2026, projecting variable losses of $350 million to $400 million for 2025. CVS Health remains committed to innovation and improving healthcare access and affordability through strategic partnerships and digital solutions.CVS Health Corporate Events
Executive/Board ChangesBusiness Operations and Strategy
CVS Health Announces Key Leadership Changes
Positive
Apr 8, 2025
On April 7, 2025, CVS Health announced key leadership changes effective in May 2025. Brian O. Newman was appointed as the Executive Vice President and Chief Financial Officer, succeeding Thomas F. Cowhey, who will transition to a strategic advisor role. Additionally, Amy L. Compton-Phillips was named Executive Vice President and Chief Medical Officer. These appointments are part of CVS Health’s strategy to enhance its leadership team and continue its growth in delivering health care services to millions of Americans.
Spark’s Take on CVS Stock
According to Spark, TipRanks’ AI Analyst, CVS is a Outperform.
CVS Health’s score reflects solid financial performance with risks due to high leverage and declining margins. Positive technical indicators and reasonable valuation enhance its attractiveness. Recent strategic board changes and earnings call insights provide a mixed outlook, with strengths in revenue growth and strategic initiatives but challenges in certain segments.
To see Spark’s full report on CVS stock, click here.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.