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Will Rising Costs Hurt Elevance's Q3 Earnings Despite Higher Premiums?
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Key Takeaways
Elevance will report Q3 2025 results on Oct. 21, with EPS projected at $4.97 on $49.5B revenues.
Higher premiums and product revenues may lift sales, but costs and benefit expenses remain high.
Carelon income growth may aid results, yet Health Benefits' operating income is set to drop 45.5%.
Elevance Health, Inc. (ELV - Free Report) is set to report its third-quarter 2025 results on Oct. 21, 2025, before the opening bell. The Zacks Consensus Estimate for the to-be-reported quarter’s earnings is currently pegged at $4.97 per shareon revenues of $49.5 billion.
The third-quarter earnings estimate witnessed one upward revision and two downward revisions over the past month. The bottom-line projection indicates a year-over-year decline of 40.6%. However, the Zacks Consensus Estimate for quarterly revenues implies a year-over-year increase of 10.7%.
Image Source: Zacks Investment Research
For 2025, the Zacks Consensus Estimate for Elevance’s revenues is pegged at $197.36 billion, implying a rise of 12.6% year over year. The consensus mark for 2025 EPS is pegged at $29.96, indicating a 9.3% year-over-year decrease.
Elevance’s earnings beat the consensus estimate in two of the trailing four quarters and missed twice, with the average surprise being negative 2.3%. This is depicted in the figure below.
Our proven model does not conclusively predict an earnings beat for the company 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. That is not the case here.
Even though ELV currently has an Earnings ESP of +3.36%, it has a Zacks Rank #4 (Sell). You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
What’s Shaping Elevance’s Q3 Results?
The Zacks Consensus Estimate for product revenues indicates 7.7% growth from the year-ago period’s $5.9 billion. The consensus estimate for premiums indicates an 11.5% increase from the year-ago period. These are likely to have aided revenues in the third quarter.
The consensus mark for Commercial Individual membership implies 1.7% growth from a year ago, while our model estimate indicates a 1.8% increase. However, the consensus estimate for Commercial Fee-based memberships indicates a 0.1% year-over-year decline.
Meanwhile, the Zacks Consensus Estimate for Carelon brand’s operating income for the third quarter indicates a 4.1% year-over-year increase. Growth in CarelonRx is primarily expected to have aided the brand. The results are likely to have been supported by the buyouts in home health and pharmacy services.
However, its expenses are likely to have remained elevated in the quarter due to substantial investments in digital capabilities and platforms. High benefit expenses, cost of products sold and interest expenses are likely to have affected profit margins, making earnings beat uncertain. The Zacks Consensus Estimate for the benefit expense ratio is pegged at 91.6, higher than the year-ago level of 89.5. We expect total expenses to jump around 9% year over year in the third quarter.
The Zacks Consensus Estimate for the Health Benefits segment’s operating income for the third quarter indicates a 45.5% year-over-year decrease. Also, declining memberships in Medicaid are likely to have kept third-quarter premium growth in check.
Stocks That Warrant a Look
While an earnings beat looks uncertain for Elevance, here are some companies from the broader Medical space that you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat this time around:
The Zacks Consensus Estimate for Select Medical’s bottom line for the to-be-reported quarter witnessed one upward revision against no downward movement over the past week. The consensus mark for Select Medical’s revenues is pegged at $1.32 billion.
CVS Health Corporation (CVS - Free Report) has an Earnings ESP of +0.28% and a Zacks Rank of 2.
The Zacks Consensus Estimate for CVS Health’s bottom line for the to-be-reported quarter is pegged at $1.36, signaling 42.8% growth from a year ago. CVS Health’s earnings beat estimates in each of the past four quarters, with an average surprise of 22.6%.
Envista Holdings Corporation (NVST - Free Report) has an Earnings ESP of +4.26% and a Zacks Rank of 2.
The Zacks Consensus Estimate for Envista’s bottom line for the to-be-reported quarter indicates 125% year-over-year growth. Envista’s earnings beat estimates in each of the trailing four quarters, with an average surprise of 16.5%.
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Will Rising Costs Hurt Elevance's Q3 Earnings Despite Higher Premiums?
Key Takeaways
Elevance Health, Inc. (ELV - Free Report) is set to report its third-quarter 2025 results on Oct. 21, 2025, before the opening bell. The Zacks Consensus Estimate for the to-be-reported quarter’s earnings is currently pegged at $4.97 per shareon revenues of $49.5 billion.
The third-quarter earnings estimate witnessed one upward revision and two downward revisions over the past month. The bottom-line projection indicates a year-over-year decline of 40.6%. However, the Zacks Consensus Estimate for quarterly revenues implies a year-over-year increase of 10.7%.
For 2025, the Zacks Consensus Estimate for Elevance’s revenues is pegged at $197.36 billion, implying a rise of 12.6% year over year. The consensus mark for 2025 EPS is pegged at $29.96, indicating a 9.3% year-over-year decrease.
Elevance’s earnings beat the consensus estimate in two of the trailing four quarters and missed twice, with the average surprise being negative 2.3%. This is depicted in the figure below.
Elevance Health, Inc. Price and EPS Surprise
Elevance Health, Inc. price-eps-surprise | Elevance Health, Inc. Quote
Q3 Earnings Whispers for Elevance
Our proven model does not conclusively predict an earnings beat for the company 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. That is not the case here.
Even though ELV currently has an Earnings ESP of +3.36%, it has a Zacks Rank #4 (Sell). You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
What’s Shaping Elevance’s Q3 Results?
The Zacks Consensus Estimate for product revenues indicates 7.7% growth from the year-ago period’s $5.9 billion. The consensus estimate for premiums indicates an 11.5% increase from the year-ago period. These are likely to have aided revenues in the third quarter.
The consensus mark for Commercial Individual membership implies 1.7% growth from a year ago, while our model estimate indicates a 1.8% increase. However, the consensus estimate for Commercial Fee-based memberships indicates a 0.1% year-over-year decline.
Meanwhile, the Zacks Consensus Estimate for Carelon brand’s operating income for the third quarter indicates a 4.1% year-over-year increase. Growth in CarelonRx is primarily expected to have aided the brand. The results are likely to have been supported by the buyouts in home health and pharmacy services.
However, its expenses are likely to have remained elevated in the quarter due to substantial investments in digital capabilities and platforms. High benefit expenses, cost of products sold and interest expenses are likely to have affected profit margins, making earnings beat uncertain. The Zacks Consensus Estimate for the benefit expense ratio is pegged at 91.6, higher than the year-ago level of 89.5. We expect total expenses to jump around 9% year over year in the third quarter.
The Zacks Consensus Estimate for the Health Benefits segment’s operating income for the third quarter indicates a 45.5% year-over-year decrease. Also, declining memberships in Medicaid are likely to have kept third-quarter premium growth in check.
Stocks That Warrant a Look
While an earnings beat looks uncertain for Elevance, here are some companies from the broader Medical space that you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat this time around:
Select Medical Holdings Corporation (SEM - Free Report) has an Earnings ESP of +8.58% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Select Medical’s bottom line for the to-be-reported quarter witnessed one upward revision against no downward movement over the past week. The consensus mark for Select Medical’s revenues is pegged at $1.32 billion.
CVS Health Corporation (CVS - Free Report) has an Earnings ESP of +0.28% and a Zacks Rank of 2.
The Zacks Consensus Estimate for CVS Health’s bottom line for the to-be-reported quarter is pegged at $1.36, signaling 42.8% growth from a year ago. CVS Health’s earnings beat estimates in each of the past four quarters, with an average surprise of 22.6%.
Envista Holdings Corporation (NVST - Free Report) has an Earnings ESP of +4.26% and a Zacks Rank of 2.
The Zacks Consensus Estimate for Envista’s bottom line for the to-be-reported quarter indicates 125% year-over-year growth. Envista’s earnings beat estimates in each of the trailing four quarters, with an average surprise of 16.5%.