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Factors That Make Elevance Health (ELV) a Lucrative Bet Now
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Elevance Health Inc. (ELV - Free Report) remains well-poised for growth, courtesy of growing premiums and membership. Numerous buyouts and a strong financial standing also act as tailwinds to the stock.
Top Zacks Rank & Price Rally
Elevance Health carries a Zacks Rank #2 (Buy) currently.
The stock has gained 23.5% in a year against the industry’s decline of 31.2%. The Zacks Medical sector has lost 17.4% and the S&P 500 composite has declined 15.1% in the said time frame.
Image Source: Zacks Investment Research
Favorable Style Score
ELV carries an impressive Value Score of A. Value Score helps find stocks that are undervalued. The back-tested results show that stocks with a Value Score of A or B combined with a Zacks Rank #1 (Strong Buy) or 2 are the best investment bets.
Robust Prospects
The Zacks Consensus Estimate for Elevance Health’s 2022 earnings is pegged at $29.02 per share, indicating an 11.1% increase from the year-ago reading. The same for revenues stands at $155.7 billion, implying 13.7% growth from the prior-year tally. The consensus mark for 2023 earnings stands at $32.63 per share, suggesting growth of 12.4% from the year-ago actuals, while the same for revenues is pegged at $163.9 billion, hinting at a 5.3% rise from the prior-year reported number.
Impressive Earnings Surprise History
ELV boasts an impressive surprise record. Its earnings surpassed estimates in each of the trailing four quarters, the average being 4.11%.
Solid Return on Equity
The ROE of Elevance Health stands at 19.6% in the trailing 12 months, higher than the industry average of 15.9%. This reflects its efficiency in utilizing its shareholders’ funds.
Upbeat Financial Outlook for 2022
Management anticipates operating revenues at around $152 billion, indicating roughly 11% growth from the 2021 figure.
Adjusted net income is forecast to be more than $28.95 per share, suggesting an 11.4% rise from the 2021 figure.
Business Tailwinds
Elevance Health’s revenues continue to be driven by premium rate increases and a growing customer base. Riding on such tailwinds, its top line witnessed a CAGR of 8.6% over the past decade (2011-2021).
A well-performing Government business on the back of affordable Medicare and Medicaid plans fetches Elevance Health several contract wins and renewals. This, in turn, is expected to continuously bolster the health insurer’s membership base.
For 2022, medical membership was projected in the range of 45.6-46.2 million. Elevance Health had already surpassed the range with 47.3 million members as of Sep 30, 2022, with a quarter left to end the year.
ELV resorts to numerous acquisitions to solidify its business portfolio and expand its geographical presence. One of its recent buyouts is the transaction of the comprehensive specialty pharmacy company BioPlus in November 2022. The deal is expected to close in the first half of 2023, providing an impetus to the healthcare services brand of Elevance Health. Another notable buyout pursued by the health insurer this year includes that of New York-based Integra Managed Care.
ELV boasts a solid financial standing, backed by a growing cash balance and robust cash-generating abilities. It generated cash from operations of nearly $10 billion in the first nine months of 2022, which surged 48.2% year over year. A strong financial position equips Elevance Health with prudent capital-deployment moves through share buybacks and dividend payments. Its dividend yield of 1% remains higher than the industry’s 0.8% average.
Medpace’s earnings surpassed estimates in each of the last four quarters, the average being 22.04%. The Zacks Consensus Estimate for MEDP’s 2022 earnings suggests an improvement of 44.9%, while the same for revenues indicates growth of 27.1% from the respective year-ago reported figures. The consensus mark for MEDP’s 2022 earnings has moved 13.1% north in the past 60 days.
The bottom line of Merck beat estimates in each of the last four quarters, the average being 16.07%. The Zacks Consensus Estimate for MRK’s 2022 earnings suggests an improvement of 22.6%, while the same for revenues implies growth of 17.9% from the respective year-ago reported figures. The consensus mark for MRK’s 2022 earnings has moved 1.1% north in the past 30 days.
ShockWave Medical’s earnings outpaced estimates in each of the trailing four quarters, the average being 146.10%. The Zacks Consensus Estimate for SWAV’s 2022 earnings is pegged at $2.88 per share. The year-ago reported figure was a loss per share of 26 cents. The consensus mark for SWAV’s 2022 earnings has moved 12.1% north in the past 30 days.
Shares of Medpace, Merck and ShockWave Medical have gained 3.3%, 44.7% and 45.9%, respectively, in a year.
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Factors That Make Elevance Health (ELV) a Lucrative Bet Now
Elevance Health Inc. (ELV - Free Report) remains well-poised for growth, courtesy of growing premiums and membership. Numerous buyouts and a strong financial standing also act as tailwinds to the stock.
Top Zacks Rank & Price Rally
Elevance Health carries a Zacks Rank #2 (Buy) currently.
The stock has gained 23.5% in a year against the industry’s decline of 31.2%. The Zacks Medical sector has lost 17.4% and the S&P 500 composite has declined 15.1% in the said time frame.
Image Source: Zacks Investment Research
Favorable Style Score
ELV carries an impressive Value Score of A. Value Score helps find stocks that are undervalued. The back-tested results show that stocks with a Value Score of A or B combined with a Zacks Rank #1 (Strong Buy) or 2 are the best investment bets.
Robust Prospects
The Zacks Consensus Estimate for Elevance Health’s 2022 earnings is pegged at $29.02 per share, indicating an 11.1% increase from the year-ago reading. The same for revenues stands at $155.7 billion, implying 13.7% growth from the prior-year tally. The consensus mark for 2023 earnings stands at $32.63 per share, suggesting growth of 12.4% from the year-ago actuals, while the same for revenues is pegged at $163.9 billion, hinting at a 5.3% rise from the prior-year reported number.
Impressive Earnings Surprise History
ELV boasts an impressive surprise record. Its earnings surpassed estimates in each of the trailing four quarters, the average being 4.11%.
Solid Return on Equity
The ROE of Elevance Health stands at 19.6% in the trailing 12 months, higher than the industry average of 15.9%. This reflects its efficiency in utilizing its shareholders’ funds.
Upbeat Financial Outlook for 2022
Management anticipates operating revenues at around $152 billion, indicating roughly 11% growth from the 2021 figure.
Adjusted net income is forecast to be more than $28.95 per share, suggesting an 11.4% rise from the 2021 figure.
Business Tailwinds
Elevance Health’s revenues continue to be driven by premium rate increases and a growing customer base. Riding on such tailwinds, its top line witnessed a CAGR of 8.6% over the past decade (2011-2021).
A well-performing Government business on the back of affordable Medicare and Medicaid plans fetches Elevance Health several contract wins and renewals. This, in turn, is expected to continuously bolster the health insurer’s membership base.
For 2022, medical membership was projected in the range of 45.6-46.2 million. Elevance Health had already surpassed the range with 47.3 million members as of Sep 30, 2022, with a quarter left to end the year.
ELV resorts to numerous acquisitions to solidify its business portfolio and expand its geographical presence. One of its recent buyouts is the transaction of the comprehensive specialty pharmacy company BioPlus in November 2022. The deal is expected to close in the first half of 2023, providing an impetus to the healthcare services brand of Elevance Health. Another notable buyout pursued by the health insurer this year includes that of New York-based Integra Managed Care.
ELV boasts a solid financial standing, backed by a growing cash balance and robust cash-generating abilities. It generated cash from operations of nearly $10 billion in the first nine months of 2022, which surged 48.2% year over year. A strong financial position equips Elevance Health with prudent capital-deployment moves through share buybacks and dividend payments. Its dividend yield of 1% remains higher than the industry’s 0.8% average.
Other Stocks to Consider
Some other top-ranked stocks in the Medical space are Medpace Holdings, Inc. (MEDP - Free Report) , Merck & Co., Inc. (MRK - Free Report) and ShockWave Medical, Inc. (SWAV - Free Report) . While Medpace flaunts a Zacks Rank #1 (Strong Buy), Merck and ShockWave Medical carry a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
Medpace’s earnings surpassed estimates in each of the last four quarters, the average being 22.04%. The Zacks Consensus Estimate for MEDP’s 2022 earnings suggests an improvement of 44.9%, while the same for revenues indicates growth of 27.1% from the respective year-ago reported figures. The consensus mark for MEDP’s 2022 earnings has moved 13.1% north in the past 60 days.
The bottom line of Merck beat estimates in each of the last four quarters, the average being 16.07%. The Zacks Consensus Estimate for MRK’s 2022 earnings suggests an improvement of 22.6%, while the same for revenues implies growth of 17.9% from the respective year-ago reported figures. The consensus mark for MRK’s 2022 earnings has moved 1.1% north in the past 30 days.
ShockWave Medical’s earnings outpaced estimates in each of the trailing four quarters, the average being 146.10%. The Zacks Consensus Estimate for SWAV’s 2022 earnings is pegged at $2.88 per share. The year-ago reported figure was a loss per share of 26 cents. The consensus mark for SWAV’s 2022 earnings has moved 12.1% north in the past 30 days.
Shares of Medpace, Merck and ShockWave Medical have gained 3.3%, 44.7% and 45.9%, respectively, in a year.