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what it is
CVS sells you prescriptions, runs drug benefits for employers, and insures 37 million people through Aetna.
how it gets paid
Last year Cvs Health made $402.1B in revenue. Health Services was the main engine at $162.9B, or 40% of sales.
why it's growing
Revenue grew 7.8% last year. Quarterly revenue was $105.7B, according to the company's February 10, 2026 earnings report cited in web coverage.
what just happened
CVS reported adjusted EPS of $1.09 in Q4 2025, beating the $0.94 consensus by 15.96%.
At a glance
B++ balance sheet — above average — nothing keeping you up at night
85/100 earnings predictability — you can trust these numbers
11.6x trailing p/e — the market's not buying it — or you found a deal
3.8% dividend yield — cash in your pocket every quarter
9.5% return on capital — nothing to write home about
xvary composite: 68/100 — average
What they do
CVS sells you prescriptions, runs drug benefits for employers, and insures 37 million people through Aetna.
CVS wins because your prescription, your insurer, and often your nearest drugstore can all be CVS. It runs 9,000 locations, covers 37 million medical members, and fills or manages 4 billion prescriptions a year. Integration → one company handles more of your healthcare bill → so what: leaving is painful, and CVS gets more chances to keep your spending inside its system.
How they make money
$402.1B
annual revenue · their business grew +7.8% last year
Health Services
$162.9B
+7.8%
Health Care Benefits
$121.3B
+7.8%
Pharmacy & Consumer Wellness
$117.9B
+7.8%
Corporate & other
$0.0B
0.0%
The products that matter
health insurance and medicare plans
Health Care Benefits
~$121.3B segment revenue (table)
This matches the Health Care Benefits row on-page (~$121.3B). Some disclosures cite higher benefits revenue under different consolidation—use the filing. Medicare-eligible mix still drives CMS sensitivity.
reimbursement exposed
pharmacy benefit management
Pharmacy Services
part of a $402.1B platform
the source data here is thin on segment detail, but this is one of the core pipes moving healthcare dollars through cvs. scale is the point.
scale engine
consumer-facing pharmacy network
Retail Pharmacy
~2.7% companywide net margin
The stores are the front door, but the whole company keeps only a few cents per revenue dollar (~2.7% net on the health panel)—traffic only matters if operations stay tight.
front door
Key numbers
11.6x
trailing p/e
P/E → price-to-earnings → so what: you are paying 11.6 times reported earnings for a company with projected EPS rising from $6.74 in 2025 to $8.15 by 2027.
3.8%
dividend yield
Dividend yield → annual cash payout on today's stock price → so what: you get paid 3.8% while you wait, if earnings keep climbing from $6.74 in 2025 toward $8.15 by 2027.
9.5%
return on capital
Return on capital → profit earned on money invested in the business → so what: CVS earns 9.5 cents for every dollar tied up in operations.
$60.5B
long-term debt
Debt equals 38% of capital, which is manageable but leaves less room for mistakes in a low-margin business.
Financial health
B++
strength
- balance sheet grade B++ — above average financial health
- risk rank 3 — safer than 50% of stocks
- price stability 65 / 100
- long-term debt $60.5B (38% of capital)
- net profit margin 2.7% — keeps 3 cents of every dollar in revenue
- return on equity 16% — $0.16 profit for every $1 investors have put in
B++ — functional but not a standout on the balance sheet.
Total return vs. market
You invested $10,000 in CVS 3 years ago → it's now worth $9,800.
The index would have given you $13,880.
source: institutional data · total return
What just happened
beat estimates
CVS reported adjusted EPS of $1.09 in Q4 2025, beating the $0.94 consensus by 15.96%.
Quarterly revenue was $105.7B, according to the company's February 10, 2026 earnings report cited in web coverage. Management also kept its 2026 adjusted EPS outlook at $7.00 to $7.20, which matters more than one quarter in a turnaround story.
$105.7B
revenue
$1.09
adjusted eps
15.96%
eps surprise
the number that mattered
The key number was $1.09 because it beat expectations by 15.96%, showing the earnings reset may be stabilizing faster than the market expected.
-
cvs health recorded decent fourth-quarter results amidst a tougher legislative backdrop.in late january, several health insurers’ stocks were hit hard by the announcement of smallerthan-expected government reimbursement for medicare. then, earlier this month, cvs announced that december-period revenues and earnings rose from a year ago, but were only slightly above estimates, whereas cvs’ performance in prior quarters was well above wall street views.
-
leadership reiterated its profit outlook for 2026.adjusted earnings per share are anticipted to be between $7.00 and $7.20, though operating cash flow expectations have been reduced from $10 billion to $9 billion.
-
cvs may see relief if the center for medicare services (cms) revises the reimbursement rate higher.contracts with the cms for medicare-eligible and federal employees are a big slice of benefits operations—this page’s benefits row is ~$121.3B; some filings round or consolidate to higher totals (e.g. ~$143B cited elsewhere).
-
in fact, an estimated 20% of total cvs revenue comes from the federal government.
-
within that portion of overall consolidated revenue, medicare eligible individuals have accounted for 73% to 79% of revenues over the past three years.it is not uncommon for an initial low reimbursement level to be proposed with a higher figure to follow.
source: company earnings report, 2026
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What could go wrong
the #1 risk is medicare reimbursement pressure on the Health Care Benefits segment.
med
medicare reimbursement pressure
cvs already flagged the legislative backdrop as tougher after reimbursement proposals came in lighter than expected for parts of medicare.
73–79% of Health Care Benefits revenue has come from medicare-eligible members over the past three years (use ~$121.3B benefits row on this page; higher totals appear in some disclosures).
med
drug pricing and pbm scrutiny
government drug price negotiations and broader pressure on pharmacy middlemen can squeeze the economics of cvs's integrated pharmacy model.
this doesn't hit a side business. it pressures the parts of a $402.1B company that sit between drugmakers, insurers, pharmacies, and patients.
med
thin-margin execution
a ~2.7% net margin means the company does not need a disaster to disappoint. small misses in claims, pricing, or operating efficiency can do the job.
with $60.5B in long-term debt and operating cash flow guidance already cut to $9B from $10B, execution matters more than the headline revenue size suggests.
when you keep ~2.7% on $402.1B of revenue, reimbursement cuts or pricing pressure do not need to be dramatic to hurt earnings.
source: institutional data · regulatory filings · risk analysis
Pay attention to
metric
operating cash flow vs. $9B guide
management already moved 2026 operating cash flow down from $10B to $9B. another cut would matter more than a routine headline beat.
calendar
CMS reimbursement updates
rate proposals and revisions can swing sentiment because medicare-eligible members contributed 73–79% of benefits revenue over the past three years (~$121.3B row here).
trend
quality of earnings beats
the latest quarter only cleared expectations slightly. if beats keep getting smaller, the low multiple will start to look deserved.
risk
margin cushion
2.4% net margin on $402.1B leaves little room for claims inflation, pricing pressure, or execution mistakes.
Analyst rankings
short-term outlook
top 20%
momentum score 2 — in human-speak, analysts expect cvs to outperform most stocks over the next year.
risk profile
average
stability score 3 — average risk. not a bunker stock, not a blowup story.
chart momentum
top 20%
technical score 2 — the chart has improved even while the reimbursement debate hangs over the stock.
earnings predictability
85 / 100
management usually lands close to the numbers. in human-speak, cvs tends to be operationally messy without being numerically random.
source: institutional data
Institutional activity
859 buyers vs. 814 sellers in 3q2025. total institutional holdings: 1.1B shares.
source: institutional data
Price targets
3-5 year target range
$32
$97
$78
current price
$65
target midpoint · 17% from current · 3-5yr high: $125 (+60% · 15% ann'l return)
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