Start here if you're new
what it is
Elevance is a health insurer that gets paid to manage your doctor bills, drug costs, and government health plans.
how it gets paid
Last year Elevance Health made $199.1B in revenue. Commercial health benefits was the main engine at $65.7B, or 33% of sales.
why it's growing
Revenue grew 12.5% last year. The number that mattered was $26.00, the revised 2026 EPS estimate, because cheap stocks stop being cheap when earnings keep moving down.
what just happened
Q4 adjusted EPS of $3.39 beat the $3.16 consensus by 7.3%, even as margin pressure kept the 2026 reset in focus.
At a glance
B++ balance sheet — above average — nothing keeping you up at night
90/100 earnings predictability — you can trust these numbers
11.4x trailing p/e — the market's not buying it — or you found a deal
2.2% dividend yield — cash in your pocket every quarter
11.5% return on capital — nothing to write home about
xvary composite: 62/100 — average
What they do
Elevance is a health insurer that gets paid to manage your doctor bills, drug costs, and government health plans.
This business wins because scale makes your healthcare network hard to leave. Elevance serves 45.7 million medical members, and that size helps it negotiate prices with hospitals and drug providers. Switching costs (changing plans and doctors) → changing coverage is a headache → so what: you usually stay put, and Elevance keeps the premium stream.
How they make money
$199.1B
annual revenue · their business grew +12.5% last year
Commercial health benefits
$65.7B
Medicaid health benefits
$47.8B
Medicare and individual health benefits
$31.9B
CarelonRx
$35.8B
Other
$17.9B
The products that matter
health insurance provider
Health Benefits
$145.3B · 73% of sales
this is the core business: $145.3B in revenue tied to 45.7 million medical members. If you want to understand ELV, start here.
center of gravity
pharmacy benefits management
CarelonRx
$35.8B · 18% of sales
this PBM generated $35.8B last year. It's smaller than Health Benefits, but it matters because it gives elevance another lever to manage total medical spend.
margin lever
other care and services
remaining businesses
$18.0B · 9% of sales
the math says about $18.0B of revenue sits outside the two named engines. Useful diversification, but not enough to change the fact that insurance economics drive the stock.
supporting cast
Key numbers
11.4x
trailing p/e
You are paying 11.4 times trailing earnings for a company that grew revenue 12.5%. Cheap is the point here.
45.7M
medical members
That member base is the moat. Bigger scale helps negotiate rates and spread fixed costs.
6.5%
operating margin
This is thin for a business handling $199.1B in revenue. Small mistakes become billion-dollar problems.
29%
debt to capital
Long-term debt is $31.2B, or 29% of capital. That is manageable, but not invisible.
Financial health
B++
strength
- balance sheet grade B++ — above average financial health
- risk rank 3 — safer than 50% of stocks
- price stability 75 / 100
- long-term debt $31.2B (29% of capital)
- net profit margin 4.1% — keeps 4 cents of every dollar in revenue
- return on equity 18% — $0.18 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 ELV 3 years ago → it's now worth $7,330.
The index would have given you $13,880.
source: institutional data · total return
What just happened
beat estimates
Q4 adjusted EPS of $3.39 beat the $3.16 consensus by 7.3%, even as margin pressure kept the 2026 reset in focus.
Quarterly revenue was $49.3B in the company report for January 2026. The beat was real, but so was the warning: cut its 2026 EPS view to $26.00 after the print because profitability is getting squeezed.
$49.3B
revenue
$3.39
eps
7.3%
surprise
the number that mattered
The number that mattered was $26.00, the revised 2026 EPS estimate, because cheap stocks stop being cheap when earnings keep moving down.
-
elevance’s fourth-quarter earnings exceeded our subdued expectations, but we have lowered our 2026 estimate again.
-
adjusted diluted earnings per share came in $0.13 above our call, despite contracting margins and lower net investment income.
-
we have cut our earnings estimate for 2026 by $1.00 per share, to $26.00, closer to management’s newly guided outlook of at least $25.50.
-
a confluence of negative factors will weigh on profitability.the elevated cost trends that have pressured the bottom line over the past six quarters may moderate a bit, as utilization rates plateau.
-
still, adverse legislation affecting the industry will also hurt elevance.
source: company earnings report, 2026
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What could go wrong
the #1 risk is medical cost inflation staying high while pricing catches up slowly.
med
medical cost trend pressure
ELV just produced a 3.2% net margin on $199.1B of revenue. That means even modest utilization or cost pressure can do real damage to earnings.
with management guiding to at least $25.50 and analysts at $26.00 for 2026 EPS, there is very little room for another negative surprise.
med
adverse legislation affecting managed care and pharmacy benefits
regulatory changes can hit pricing, reimbursement, or pharmacy benefit economics. CarelonRx alone generated $35.8B last year, so this is not a side issue.
policy changes would pressure profitability across both the $145.3B Health Benefits business and the $35.8B PBM operation.
med
continued estimate cuts and institutional selling
the stock already lagged the market badly, and institutions were net sellers for two straight quarters. When confidence slips in a low-multiple stock, the multiple can stay low.
last quarter alone showed 674 buyers versus 813 sellers. That's 139 more sellers than buyers leaning the wrong way.
a business doing $199.1B of revenue with a 3.2% net margin does not need a huge shock to miss numbers. It just needs costs to stay a little too high for a little too long.
source: institutional data · regulatory filings · risk analysis
Pay attention to
margin watch
3.2% net margin
this is the number holding the entire argument together. If costs ease, the stock looks cheap. If they do not, 11.4x may not be cheap enough.
estimate trend
2026 EPS reset to $26.00
watch whether expectations stabilize near $26.00 or drift closer to management's at least $25.50 guide.
policy risk
managed-care and PBM regulation
Health Benefits produced $145.3B and CarelonRx added $35.8B. Policy changes aimed at either bucket would be felt immediately.
earnings
the next update on utilization and pricing
Q4 EPS was $5.32. The next report matters less for the beat and more for whether medical cost pressure is finally easing.
Analyst rankings
short-term outlook
average
momentum score 3 — in human-speak, analysts do not see a strong near-term edge either way.
risk profile
average
stability score 3 — typical stock risk, even if the underlying business is highly predictable.
chart momentum
average
technical score 3 — no strong trend signal. The chart is waiting for fundamentals to settle down.
earnings predictability
90 / 100
management usually gives reliable guidance. The issue is not chaos. It's lower earnings power.
source: institutional data
Institutional activity
institutions have been net selling for 2 consecutive quarters — 674 buyers vs. 813 sellers in 3q2025. total institutional holdings: 0.2B shares. net selling for 2 quarters.
source: institutional data
Price targets
3-5 year target range
$255
$545
$347
current price
$400
target midpoint · +15% from current · 3-5yr high: $780 (+125% · 24% ann'l return)
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