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CVS Health's (CVS) Digital Focus Aids Growth, Macro Issues Ail
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CVS Health (CVS - Free Report) gains from digital health adoption. Strategic buyouts should drive future growth. However, reimbursement pressure and macroeconomic headwinds provide stiff challenges to CVS Health. The stock carries a Zacks Rank #3 (Hold).
CVS Health is continuously focusing and investing in fast-growing spaces like enterprise data platforms, cloud capabilities and digital products to offer innovative solutions through mobile and web channels. The company is investing in emerging technology capabilities, such as voice, artificial intelligence and robotics, to automate, reduce the cost and improve the experience for its constituents.
In terms of the latest update, the company exceeded 55 million unique digital customers till the third quarter, an increase of nearly 20% versus last year. This strong growth has been powered by its focus on innovating and delivering experiences that matter most to customers.
Further, following the colossal acquisition of the health insurance giant Aetna, CVS Health has introduced its Health Care Benefits business arm. This segment consistently demonstrates value to consumers and clients by successfully managing drug cost trends and bringing innovative clinical solutions to the market.
Medical membership in the third quarter of 2023 grew to 25.7 million, an increase of 1.4 million members versus the prior year, reflecting growth across multiple product lines, including individual exchange, Medicare and commercial. CVS Health demonstrated strong growth, led by significant progress made in restoring its Medicare Advantage Star ratings. Medicare Advantage is a key strategic growth area for the company’s business.
Within Health Service, both Signify Health and Oak Street Health continue to deliver strong business performance consistent with expectations. These assets bring core capabilities to the multi-payor value-based care platform that drives optimal patient engagement with health services across multiple channels.
Meanwhile, a significant portion of CVS Health’s net revenues are derived directly from Medicare, Medicaid and other government-sponsored healthcare programs. Therefore, the company is subject to federal and state reimbursement laws and regulatory requirements, anti-remuneration laws, the Stark Law and/or federal and state false claims laws.
In the third quarter, the reimbursement pressure within the pharmacy business continued despite experiencing certain stabilization. The company is making continued efforts to combat this reimbursement pressure by increasing volume and reducing costs.
Added to this, adverse economic conditions in the United States and abroad are adversely impacting CVS Health’s businesses, operating results and financial condition. The businesses are currently affected by the U.S. economy and consumer confidence in general and in the geographies it serves, including various economic factors, like inflation and changes in consumer purchasing power, preferences or spending patterns.
Estimates for Insulet’s 2023 earnings per share have increased from $1.61 to $1.90 in the past 30 days. Shares of the company have plunged 40.9% in the past year compared with the industry’s decline of 7%.
PODD’s earnings surpassed estimates in all the trailing four quarters, the average surprise being 105.1%. In the last reported quarter, it delivered an earnings surprise of 77.4%.
Haemonetics’ stock has risen 11.6% in the past year. Earnings estimates for Haemonetics have increased from $3.82 to $3.86 for 2023 and from $4.07 to $4.11 for 2024 in the past 30 days.
HAE’s earnings beat estimates in each of the trailing four quarters, delivering an average surprise of 16.1%. In the last reported quarter, it came up with an earnings surprise of 5.3%.
Estimates for DexCom’s 2023 earnings per share have increased from $1.23 to $1.41 in the past 30 days. Shares of the company have fallen 7.8% in the past year compared with the industry’s decline of 7.1%.
DXCM’s earnings surpassed estimates in all the trailing four quarters, the average surprise being 36.4%. In the last reported quarter, it delivered an earnings surprise of 47.1%.
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CVS Health's (CVS) Digital Focus Aids Growth, Macro Issues Ail
CVS Health (CVS - Free Report) gains from digital health adoption. Strategic buyouts should drive future growth. However, reimbursement pressure and macroeconomic headwinds provide stiff challenges to CVS Health. The stock carries a Zacks Rank #3 (Hold).
CVS Health is continuously focusing and investing in fast-growing spaces like enterprise data platforms, cloud capabilities and digital products to offer innovative solutions through mobile and web channels. The company is investing in emerging technology capabilities, such as voice, artificial intelligence and robotics, to automate, reduce the cost and improve the experience for its constituents.
In terms of the latest update, the company exceeded 55 million unique digital customers till the third quarter, an increase of nearly 20% versus last year. This strong growth has been powered by its focus on innovating and delivering experiences that matter most to customers.
Further, following the colossal acquisition of the health insurance giant Aetna, CVS Health has introduced its Health Care Benefits business arm. This segment consistently demonstrates value to consumers and clients by successfully managing drug cost trends and bringing innovative clinical solutions to the market.
CVS Health Corporation Price
CVS Health Corporation price | CVS Health Corporation Quote
Medical membership in the third quarter of 2023 grew to 25.7 million, an increase of 1.4 million members versus the prior year, reflecting growth across multiple product lines, including individual exchange, Medicare and commercial. CVS Health demonstrated strong growth, led by significant progress made in restoring its Medicare Advantage Star ratings. Medicare Advantage is a key strategic growth area for the company’s business.
Within Health Service, both Signify Health and Oak Street Health continue to deliver strong business performance consistent with expectations. These assets bring core capabilities to the multi-payor value-based care platform that drives optimal patient engagement with health services across multiple channels.
Meanwhile, a significant portion of CVS Health’s net revenues are derived directly from Medicare, Medicaid and other government-sponsored healthcare programs. Therefore, the company is subject to federal and state reimbursement laws and regulatory requirements, anti-remuneration laws, the Stark Law and/or federal and state false claims laws.
In the third quarter, the reimbursement pressure within the pharmacy business continued despite experiencing certain stabilization. The company is making continued efforts to combat this reimbursement pressure by increasing volume and reducing costs.
Added to this, adverse economic conditions in the United States and abroad are adversely impacting CVS Health’s businesses, operating results and financial condition. The businesses are currently affected by the U.S. economy and consumer confidence in general and in the geographies it serves, including various economic factors, like inflation and changes in consumer purchasing power, preferences or spending patterns.
Key Picks
Some better-ranked stocks in the broader medical space are Insulet (PODD - Free Report) , Haemonetics (HAE - Free Report) and DexCom (DXCM - Free Report) . While Insulet presently sports a Zacks Rank #1 (Strong Buy), Haemonetics and DexCom each carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Estimates for Insulet’s 2023 earnings per share have increased from $1.61 to $1.90 in the past 30 days. Shares of the company have plunged 40.9% in the past year compared with the industry’s decline of 7%.
PODD’s earnings surpassed estimates in all the trailing four quarters, the average surprise being 105.1%. In the last reported quarter, it delivered an earnings surprise of 77.4%.
Haemonetics’ stock has risen 11.6% in the past year. Earnings estimates for Haemonetics have increased from $3.82 to $3.86 for 2023 and from $4.07 to $4.11 for 2024 in the past 30 days.
HAE’s earnings beat estimates in each of the trailing four quarters, delivering an average surprise of 16.1%. In the last reported quarter, it came up with an earnings surprise of 5.3%.
Estimates for DexCom’s 2023 earnings per share have increased from $1.23 to $1.41 in the past 30 days. Shares of the company have fallen 7.8% in the past year compared with the industry’s decline of 7.1%.
DXCM’s earnings surpassed estimates in all the trailing four quarters, the average surprise being 36.4%. In the last reported quarter, it delivered an earnings surprise of 47.1%.