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ELV Beats Q1 Earnings Estimates on Rising Net Investment Income
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Key Takeaways
ELV's Q1 EPS of $12.58 beat estimates by 17.8%, rising 5.1% year over year.
Elevance Health saw net investment income jump 29.7% to $765M, beating estimates.
ELV's growth was driven by premiums and Carelon gains, despite membership decline and higher costs.
Elevance Health, Inc. (ELV - Free Report) reported first-quarter 2026 adjusted earnings per share (EPS) of $12.58, which surpassed the Zacks Consensus Estimate by 17.8%. The bottom line rose 5.1% year over year.
Operating revenues advanced 1.5% year over year to $49.5 billion. The top line beat the consensus mark by 3.7%.
The strong quarterly results benefited on the back of strong growth in premiums. Segment-wise, the Carelon division posted a robust revenue surge, aided by scaling risk-based services, while Health Benefits saw increased premium yields. However, the upside was partly offset by a decline in overall medical membership and an elevated expense level.
Elevance Health, Inc. Price, Consensus and EPS Surprise
Medical membership of Elevance Health was around 45.4 million as of March 31, 2026, which dipped 0.9% year over year. The decrease was due to a decline in Medicaid, Medicare Advantage and Commercial Risk-Based membership. The reported figure beat the Zacks Consensus Estimate of 44.1 million and our estimate of 44.2 million.
Premiums totaled $41 billion in the quarter under review, which improved 0.3% year over year and surpassed our estimate of $39.6 billion. Product revenues grew 7.2% year over year to $6.2 billion. The metric beat the Zacks Consensus Estimate and our estimate of $6.1 billion.
Net investment income rose 29.7% year over year to $765 million. The metric surpassed the consensus mark of $480.6 million and our estimate of $456.6 million. The Adjusted operating margin of 6.5% deteriorated 20 basis points (bps) year over year.
Total expenses escalated 3.9% year over year to $47.9 billion in the first quarter, higher than our estimate of $45.5 billion. The year-over-year increase was due to higher benefit expenses, operating expenses and interest expenses. The operating expense ratio came in at 12.8%, which deteriorated 190 bps year over year. The benefit expense ratio deteriorated 40 bps year over year to 86.8%.
Q1 Segmental Results of ELV
Health Benefits
The unit recorded operating revenues of $42.5 billion in the first quarter, which rose 2.6% year over year and beat the Zacks Consensus Estimate of $40.9 billion as well as our estimate of $40.8 billion. The segment benefited from increased premium yields.
The unit recorded an operating gain of $2.2 billion, which fell 2.7% year over year. However, it beat the consensus mark of $1.9 billion. The operating margin deteriorated 30 basis points year over year to 5.1%.
Carelon
The segment’s operating revenues rose 7.9% year over year to $18 billion in the quarter under review, beating the Zacks Consensus Estimate of $17.5 billion and our estimate of $17.1 billion. The year-over-year increase was driven by higher CarelonRx product revenues and the scaling of risk-based capabilities in Carelon Services.
The unit’s operating gain of $1.1 billion fell 3.8% year over year. The operating margin deteriorated 70 bps year over year to 5.9%.
Corporate & Other
Operating revenues came in at $4 million in the first quarter. The unit incurred an operating loss of $1.1 billion, wider than the prior-year quarter’s loss of $140 million.
ELV’s Financial Details (As of March 31, 2026)
Elevance Health exited the first quarter with cash and cash equivalents of $9.7 billion, which advanced 1.7% from the 2025-end level. Total assets of $125.8 billion increased 3.6% from the figure at 2025-end.
Long-term debt, less the current portion, amounted to $30.8 billion and fell 0.1% from the figure as of Dec. 31, 2025. Short-term borrowings at the first-quarter end were $724 million, while the current portion of the long-term debt amounted to $350 million.
Total equity of $44 billion inched up from the 2025-end level.
Elevance Health generated net cash flow from operations of $4.3 billion in the first quarter of 2026, which rose from the prior-year comparable period’s figure of $1 billion.
ELV: Capital Deployment Update
Elevance Health bought back shares worth $1.1 billion in the first quarter. It had a leftover capacity of around $5.6 billion under its share buyback authorization as of March 31, 2026.
Elevance Health paid a quarterly dividend of $1.72 per share, adding up to a cash distribution worth $376 million.
ELV’s Revised 2026 Outlook
The company now expects adjusted EPS to be at least $26.75, up from the previous guidance of at least $25.50.
The operating margin for the Health Benefits segment was earlier estimated to witness a decrease of 50-25 bps from the 2025 reported figure. Also, the operating margin for CarelonRx was expected to see a 25-0 bps decline, while the same for Carelon Services was estimated to witness an increase of 0-25 bps.
Management earlier projected operating revenues to witness a low-single-digit decline in 2026 from the 2025 level. Premium revenues were estimated to witness a mid-single-digit decline from the 2025 level. Medical enrollment was forecasted to be between 43.2 million and 43.9 million in 2026.
Net investment income was expected to be $1.9 billion. Interest expenses were forecasted to be $1.5 billion in 2026, while operating cash flow is still projected to be at least $5.5 billion. Diluted shares are estimated at 219-220 million.
The Zacks Consensus Estimate for Globus Medical’s current-year earnings of $4.46 per share has witnessed one upward revision in the past 30 days, against no movement in the opposite direction. Globus Medical beat earnings estimates in three of the trailing four quarters and missed once, with the average surprise being 18.8%. The consensus estimate for current-year revenues is pegged at $3.2 billion, suggesting 8.7% year-over-year growth.
The Zacks Consensus Estimate for InnovAge Holding’s current-year earnings of 25 cents per share has witnessed one upward revision in the past 60 days, against no movement in the opposite direction. InnovAge Holding beat earnings estimates in three of the trailing four quarters and missed once, with the average surprise being 87.5%. The consensus estimate for current-year revenues is pegged at $944.5 million, suggesting 10.6% year-over-year growth.
The Zacks Consensus Estimate for BrightSpring Health Services’ current-year earnings of $1.61 per share has witnessed seven upward revisions in the past 60 days, against no movement in the opposite direction. BrightSpring Health Services beat earnings estimates in three of the trailing four quarters and missed once, with an average surprise of 40.4%. The consensus estimate for current-year revenues is pegged at $14.8 billion, suggesting 14.8% year-over-year growth.
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ELV Beats Q1 Earnings Estimates on Rising Net Investment Income
Key Takeaways
Elevance Health, Inc. (ELV - Free Report) reported first-quarter 2026 adjusted earnings per share (EPS) of $12.58, which surpassed the Zacks Consensus Estimate by 17.8%. The bottom line rose 5.1% year over year.
Operating revenues advanced 1.5% year over year to $49.5 billion. The top line beat the consensus mark by 3.7%.
The strong quarterly results benefited on the back of strong growth in premiums. Segment-wise, the Carelon division posted a robust revenue surge, aided by scaling risk-based services, while Health Benefits saw increased premium yields. However, the upside was partly offset by a decline in overall medical membership and an elevated expense level.
Elevance Health, Inc. Price, Consensus and EPS Surprise
Elevance Health, Inc. price-consensus-eps-surprise-chart | Elevance Health, Inc. Quote
ELV’s Q1 Operational Update
Medical membership of Elevance Health was around 45.4 million as of March 31, 2026, which dipped 0.9% year over year. The decrease was due to a decline in Medicaid, Medicare Advantage and Commercial Risk-Based membership. The reported figure beat the Zacks Consensus Estimate of 44.1 million and our estimate of 44.2 million.
Premiums totaled $41 billion in the quarter under review, which improved 0.3% year over year and surpassed our estimate of $39.6 billion. Product revenues grew 7.2% year over year to $6.2 billion. The metric beat the Zacks Consensus Estimate and our estimate of $6.1 billion.
Net investment income rose 29.7% year over year to $765 million. The metric surpassed the consensus mark of $480.6 million and our estimate of $456.6 million. The Adjusted operating margin of 6.5% deteriorated 20 basis points (bps) year over year.
Total expenses escalated 3.9% year over year to $47.9 billion in the first quarter, higher than our estimate of $45.5 billion. The year-over-year increase was due to higher benefit expenses, operating expenses and interest expenses.
The operating expense ratio came in at 12.8%, which deteriorated 190 bps year over year. The benefit expense ratio deteriorated 40 bps year over year to 86.8%.
Q1 Segmental Results of ELV
Health Benefits
The unit recorded operating revenues of $42.5 billion in the first quarter, which rose 2.6% year over year and beat the Zacks Consensus Estimate of $40.9 billion as well as our estimate of $40.8 billion. The segment benefited from increased premium yields.
The unit recorded an operating gain of $2.2 billion, which fell 2.7% year over year. However, it beat the consensus mark of $1.9 billion. The operating margin deteriorated 30 basis points year over year to 5.1%.
Carelon
The segment’s operating revenues rose 7.9% year over year to $18 billion in the quarter under review, beating the Zacks Consensus Estimate of $17.5 billion and our estimate of $17.1 billion. The year-over-year increase was driven by higher CarelonRx product revenues and the scaling of risk-based capabilities in Carelon Services.
The unit’s operating gain of $1.1 billion fell 3.8% year over year. The operating margin deteriorated 70 bps year over year to 5.9%.
Corporate & Other
Operating revenues came in at $4 million in the first quarter. The unit incurred an operating loss of $1.1 billion, wider than the prior-year quarter’s loss of $140 million.
ELV’s Financial Details (As of March 31, 2026)
Elevance Health exited the first quarter with cash and cash equivalents of $9.7 billion, which advanced 1.7% from the 2025-end level. Total assets of $125.8 billion increased 3.6% from the figure at 2025-end.
Long-term debt, less the current portion, amounted to $30.8 billion and fell 0.1% from the figure as of Dec. 31, 2025. Short-term borrowings at the first-quarter end were $724 million, while the current portion of the long-term debt amounted to $350 million.
Total equity of $44 billion inched up from the 2025-end level.
Elevance Health generated net cash flow from operations of $4.3 billion in the first quarter of 2026, which rose from the prior-year comparable period’s figure of $1 billion.
ELV: Capital Deployment Update
Elevance Health bought back shares worth $1.1 billion in the first quarter. It had a leftover capacity of around $5.6 billion under its share buyback authorization as of March 31, 2026.
Elevance Health paid a quarterly dividend of $1.72 per share, adding up to a cash distribution worth $376 million.
ELV’s Revised 2026 Outlook
The company now expects adjusted EPS to be at least $26.75, up from the previous guidance of at least $25.50.
The operating margin for the Health Benefits segment was earlier estimated to witness a decrease of 50-25 bps from the 2025 reported figure. Also, the operating margin for CarelonRx was expected to see a 25-0 bps decline, while the same for Carelon Services was estimated to witness an increase of 0-25 bps.
Management earlier projected operating revenues to witness a low-single-digit decline in 2026 from the 2025 level. Premium revenues were estimated to witness a mid-single-digit decline from the 2025 level. Medical enrollment was forecasted to be between 43.2 million and 43.9 million in 2026.
Net investment income was expected to be $1.9 billion. Interest expenses were forecasted to be $1.5 billion in 2026, while operating cash flow is still projected to be at least $5.5 billion. Diluted shares are estimated at 219-220 million.
ELV’s Zacks Rank & Key Picks
ELV currently carries a Zacks Rank #4 (Sell).
Some top-ranked stocks in the broader medical space are Globus Medical, Inc. (GMED - Free Report) , InnovAge Holding Corp. (INNV - Free Report) and BrightSpring Health Services, Inc. (BTSG - Free Report) , each currently sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Globus Medical’s current-year earnings of $4.46 per share has witnessed one upward revision in the past 30 days, against no movement in the opposite direction. Globus Medical beat earnings estimates in three of the trailing four quarters and missed once, with the average surprise being 18.8%. The consensus estimate for current-year revenues is pegged at $3.2 billion, suggesting 8.7% year-over-year growth.
The Zacks Consensus Estimate for InnovAge Holding’s current-year earnings of 25 cents per share has witnessed one upward revision in the past 60 days, against no movement in the opposite direction. InnovAge Holding beat earnings estimates in three of the trailing four quarters and missed once, with the average surprise being 87.5%. The consensus estimate for current-year revenues is pegged at $944.5 million, suggesting 10.6% year-over-year growth.
The Zacks Consensus Estimate for BrightSpring Health Services’ current-year earnings of $1.61 per share has witnessed seven upward revisions in the past 60 days, against no movement in the opposite direction. BrightSpring Health Services beat earnings estimates in three of the trailing four quarters and missed once, with an average surprise of 40.4%. The consensus estimate for current-year revenues is pegged at $14.8 billion, suggesting 14.8% year-over-year growth.