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Anthem (ANTM) Gears Up for Q4 Earnings: What's in the Cards?

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Anthem, Inc. is scheduled to release fourth-quarter 2021 results on Jan 26, before the opening bell.

ANTM’s bottom line outpaced estimates in three of the trailing four quarters and missed the mark once, the average beat being 4.71%. This is depicted in the graph below:

Anthem, Inc. Price and EPS Surprise

Anthem, Inc. Price and EPS Surprise

Anthem, Inc. price-eps-surprise | Anthem, Inc. Quote

Let’s see how things have shaped up prior to the fourth-quarter earnings announcement.

Factors to Note

Improved premiums and growing membership owing to ANTM’s Medicare and Medicaid businesses coupled with rate increases are likely to have contributed to Anthem’s total revenues in the fourth quarter.

The Zacks Consensus Estimate for Anthem’s fourth-quarter revenues is pegged at $36.3 billion, suggesting growth of 15.4% from the year-ago quarter’s reported figure. This is likely to have been driven by ANTM’s Government business, Commercial business and IngenioRx. The consensus mark for fourth-quarter premiums stands at $30.9 billion, indicating an improvement of 14.1% from the prior-year quarter’s reported figure.

Anthem’s medical membership is expected to have increased in the to-be-reported quarter, courtesy of its strong Government business. ANTM is continuously gaining traction from several contract wins, solid membership gains, and a leading market position in Medicaid and Medicare.

The consensus mark for medical membership in Government business suggests growth of 17.1% from the year-ago quarter’s reported figure, while the same for Commercial & Specialty business suggests an improvement of 0.3% from the year-ago period’s reported number. The consensus mark for total membership implies an upside of 5.6% from the year-ago period’s actuals.
The Medical Loss Ratio is expected to have been high in the to-be-reported quarter due to higher non-COVID utilization.

Anthem’s expenses are likely to have remained elevated in the to-be-reported quarter due to start-up expenses associated with new contracts and other additional investments in digital innovation and technology advancements.

The Zacks Consensus Estimate for fourth-quarter earnings is pegged at $5.11 per share, suggesting an improvement of 101.2% from the prior-year quarter’s reported figure.

Earnings Whispers

Our proven model doesn’t predict an earnings beat for Anthem this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat, which is not the case here.

Earnings ESP: Anthem has an Earnings ESP of 0.00%. This is because both the Most Accurate Estimate and the Zacks Consensus Estimate are pegged at $5.11. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: Anthem carries a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.

Stocks to Consider

Some stocks worth considering from the medical space with a perfect mix of elements to surpass estimates in the upcoming quarterly releases are as follows:

Bausch Health Companies Inc. (BHC - Free Report)   has an Earnings ESP of +8.46% and a Zacks Rank of 3, currently.

bluebird bio, inc. (BLUE - Free Report) has an Earnings ESP of +26.20% and a Zacks Rank of 3, presently.

HCA Healthcare, Inc. (HCA - Free Report) has an Earnings ESP of +1.27% and a Zacks Rank of 3 at present.

Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.
 


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