Attractive Price-to-Sales Ratio
Reasonable PE Ratio
Strong Gross Profit Margin
Decent Return on Equity
Strong Liquidity Ratios
Good Interest Coverage
🏆 Strong Member Engagement
💡 Value-Based Care Model
📈 Solid Financial Performance
🚀 Projected Membership Growth
📊 Expansion of Carelon Services
High Price-to-Cash-Flow Ratio
Low Net Profit Margin
Moderate Debt Levels
Low Cash Ratio
⚠️ Elevated Medicaid Cost Trends
🔄 Regulatory Uncertainty
📉 Margin Pressures
Elevance Health exhibits strong business quality through innovative member engagement and a solid value-based care model. However, challenges remain in managing Medicaid cost trends and regulatory uncertainties. Future prospects appear positive with anticipated membership growth and expansion of Carelon services, albeit with potential margin pressures.
Analysis Date: January 23, 2025
Last Updated: March 12, 2025
Trailing Twelve Months (TTM) values provide a view of the company's performance over the last year.
Benjamin Graham's value investing approach focuses on finding stocks with a significant margin of safety between their intrinsic value and market price.
Intrinsic Value
Estimated fair value based on Graham's formula
$749.20
Current Market Price: $428.65
IV/P Ratio: 1.75x (>1.0 indicates undervalued)
Margin of Safety
Gap between intrinsic value and market price
43.0%
Graham recommended a minimum of 20-30% margin of safety
Higher values indicate a greater potential discount to fair value
Graham Criteria Checklist
Benjamin Graham's value investing checklist for ELV
Positive earnings (5+ years)
Dividend history (5+ years)
P/E ratio ≤ 20 (16.32)
P/B ratio ≤ 1.5 (2.36)
Current ratio ≥ 2.0 (2.01x)
Long-term debt < Net current assets (1.11x)
Margin of safety (43.0%)
ELV does not meet all Graham criteria
Trailing Twelve Months (TTM) values provide a view of the company's performance over the last year.
The gross profit margin of 46.80% indicates strong pricing power and cost control, allowing the company to retain a significant portion of revenue as profit.
Return on Equity (ROE) of 14.25% reflects effective management in generating profits from shareholders' equity, suggesting efficient use of capital.
The net profit margin of 3.38% indicates lower profitability after all expenses, which may limit the company's ability to generate returns in comparison to its revenue.
Profitability metrics measure a company's ability to generate earnings relative to its revenue, operating costs, and other relevant metrics. Higher values generally indicate better performance.
Return on Equity (ROE)
Measures how efficiently a company uses its equity to generate profits
14.25%
Higher values indicate better returns for shareholders
TTM (as of 2025-04-16)
Return on Assets (ROA)
Measures how efficiently a company uses its assets to generate profits
0.36%
Higher values indicate better asset utilization
TTM (as of 2025-04-16)
Gross Profit Margin
Percentage of revenue retained after accounting for cost of goods sold
46.80%
Higher values indicate better efficiency in production
TTM (as of 2025-04-16)
Net Profit Margin
Percentage of revenue retained after accounting for all expenses
3.38%
Higher values indicate better overall profitability
TTM (as of 2025-04-16)
The current ratio of 1.46 and quick ratio of 1.46 indicate that the company has sufficient short-term assets to cover its liabilities, reflecting strong liquidity.
An interest coverage ratio of 6.70 indicates that the company has ample earnings to cover its interest obligations, suggesting low financial risk.
The debt-to-equity ratio of 0.76 indicates that the company is moderately leveraged, which could pose risks if cash flows decline.
The cash ratio of 0.21 suggests limited cash reserves relative to current liabilities, which could impact liquidity in times of financial stress.
Financial health metrics assess a company's ability to meet its financial obligations and its overall financial stability.
Debt to Equity Ratio
Total debt divided by total equity
0.75x
Lower values indicate less financial leverage and risk
Less than 1.0 is conservative, 1.0-2.0 is moderate, >2.0 indicates high risk
Q4 2024
Current Ratio
Current assets divided by current liabilities
2.01x
Higher values indicate better short-term liquidity
Less than 1.0 is concerning, 1.0-2.0 is adequate, greater than 2.0 is good
Q4 2024
Elevance Health demonstrated a commitment to member well-being with initiatives like the Sydney app, which saved members an estimated 1.5 million hours in 2024 by streamlining their healthcare journey.
The company has shifted to value-based partnerships, accounting for nearly two-thirds of care today, which has resulted in better health outcomes and reduced inefficiencies.
Reported fourth quarter adjusted diluted EPS of $3.84 and full year adjusted diluted EPS of $33.04, indicating strong financial discipline even amid elevated costs.
The Medicaid business continues to face elevated cost trends that are impacting margins, with rates currently insufficient to cover these trends.
Elevance anticipates Medicare Advantage membership growth of 7% to 9% for 2025, supported by strong retention and group membership growth.
The acquisition of CareBridge and ongoing investment in Carelon are expected to drive significant revenue growth, with Carelon services anticipated to grow above long-term targets.
Ongoing discussions regarding Medicare and Medicaid regulations could introduce volatility and impact future performance.
The company is navigating pressures on margins due to a mix of business changes and expected elevated costs in Medicaid and Medicare.