Elevance Health Inc. (NYSE:ELV) is one of the best inexpensive stocks to buy according to hedge funds. On September 4, Elevance’s CFO, Mark Kaye, announced at the Wells Fargo Healthcare Conference in Boston that the company is reducing its Medicare footprint. The decision is being made to improve the business’s profitability, especially in its Medicare Advantage/MA and standalone Medicare Part D prescription drug plans. Kaye stated that these moves are intended to help Elevance achieve a firmer financial ...

As many Seeking Alpha authors have already noted, the health insurance sector is under historic pressure, yet for patient investors, these challenges could be creating generational buying opportunities. This year, most insurers have been caught off guard byHi! I'm a passionate investor who has been researching publically traded companies for over 6 years. My primary focus is on identifying great businesses at reasonable prices and holding them for the long term but I also dive into trend following strategie ...

Core Insights - Elevance Health, Inc. is transitioning from a traditional health insurer to a comprehensive healthcare solutions provider, focusing on strategic partnerships and integrated care models [1][8] - The company is expanding into primary care, digital health, and pharmacy services to offer holistic health solutions that address broader health determinants [2][8] - Elevance Health's initiatives aim to reduce hospitalizations and enhance care accessibility through AI-enabled platforms and telehealth services [3][4] Membership and Revenue Growth - Medicare Advantage memberships increased by 11% year-over-year in Q2 2025, while individual membership grew by 5.2% [4][8] - Total revenues rose by 13.4% year-over-year in the same quarter [4][8] Competitive Landscape - Competitors like UnitedHealth Group and Humana are also focusing on value-based care, with UnitedHealth's Optum division reporting a 5.8% revenue growth in the first half of 2025 [5] - Humana's total adjusted revenues increased by 9.9% year-over-year in the first half of 2025 [6] Valuation and Earnings Estimates - Elevance Health's shares have declined by 14.9% year-to-date, contrasting with a 0.2% decline in the industry [7] - The company trades at a forward price-to-earnings ratio of 9.88, below the industry average of 15.23 [9] - The Zacks Consensus Estimate for Elevance Health's 2025 earnings is $29.88 per share, indicating a 9.6% decline from the previous year [11]

Industry Overview - The U.S. healthcare services market is projected to grow from $8.77 trillion in 2024 to $9.25 trillion in 2025, driven by telehealth, digital health, workforce shortages, and changes in reimbursement models [1] - CVS Health and Elevance Health are major players in this competitive market, each with extensive reach and diversified services [1][2] CVS Health Analysis - CVS Health, valued at $90.32 billion, is experiencing revenue growth across all operating segments, with a focus on restoring Aetna to target margins through organizational realignment and technology enhancements [2][3] - The company is enhancing its pharmacy services by acquiring certain Rite Aid pharmacies and implementing a new pharmacy model, CostVantage, to address reimbursement pressures [6][7] - CVS is investing $20 billion over the next decade in digital health initiatives, aiming for $500 million in cost savings in 2025 [7] - The company has a strong cash flow generation and is focused on improving financial performance in its Health Care Delivery segment [4][7] Elevance Health Analysis - Elevance Health, with a market cap of $70.71 billion, is facing challenges due to shifts in Medicaid and ACA membership, leading to increased medical costs and a downward revision of its 2025 EPS outlook to $30 [2][8] - The company closed Q2 2025 with 45.6 million medical members, a decrease of approximately 200,000, and a consolidated benefit expense ratio of 88.9%, up 260 basis points from the previous year [10][13] - Elevance is showing strength in its Medicare Advantage portfolio and is working to stabilize trends in high-cost areas through streamlined processes and AI-enabled tools [11][12] Financial Performance and Projections - CVS Health's EPS for 2025 is projected to grow by 16.6% to $6.32, with estimates trending upward [20][21] - In contrast, Elevance Health's EPS estimate for 2025 is $30.15, reflecting an 8.8% decrease, with estimates having declined by 12.4% in the last 90 days [22] - Year-to-date, CVS shares have increased by 59.4%, while Elevance shares have decreased by 15.9% [16] Conclusion - CVS Health is positioned for long-term growth with its digital investments and restructuring efforts, while Elevance Health faces challenges in the ACA and Medicaid markets, making CVS the stronger investment option [22][23]

Key Takeaways Elevance Health is growing its value-based care portfolio in behavioral health and oncology.The Carelon business integrates pharmacy, behavioral health and complex care management.Medicare Advantage memberships rose 11% and total revenues climbed 13.4% Y/Y.Elevance Health, Inc. (ELV) , one of the largest health insurers in the United States, has been actively expanding its focus toward value-based care. This move indicates that the company visualizes the future of healthcare driven by patient ...

Core Insights - The author has extensive experience in executive management, particularly in insurance/reinsurance and the Asia Pacific markets, with a focus on climate change and ESG [1] Group 1 - The author holds an honours degree in economics and politics, emphasizing economic development [1] - The author has 36 years of experience in executive management, providing a deep understanding of relevant markets [1] - The author invests personally, indicating a vested interest in the analysis presented [1]

Core Insights - UnitedHealth Group Incorporated (UNH) and Elevance Health, Inc. (ELV) are facing significant challenges due to rising medical costs, regulatory pressures, and declining investor confidence, leading to substantial stock declines in 2025 [1][22] - UNH's stock has decreased by 40.7% year-to-date, while ELV has seen a 16% decline, against a broader industry slump of 31.6% [2][22] Group 1: Company Comparisons - UnitedHealth has a market capitalization of $275.5 billion, significantly larger than Elevance's $70.3 billion, and a stronger debt-to-EBITDA ratio of 2.03 compared to Elevance's 2.47 [5][22] - UNH's operational model includes vertical integration through UnitedHealthcare and Optum, allowing for better cost control and negotiation power [6][22] - Despite recent pressures, UNH has maintained robust cash flow, enabling continued investment in growth, although it has lowered its outlook after missing estimates [7][22] Group 2: Financial Performance - Elevance achieved a 15.5% growth in premiums in the first half of 2025, surpassing UNH's 12.6% growth [12][22] - Elevance's benefit expense ratio increased to 88.9% in Q2 2025, indicating a significant portion of premium revenue is directed towards claims rather than profitability, with expectations to reach 90% for the full year [13][22] - UNH's medical care ratio rose to 89.4% in Q2 2025, suggesting stronger profitability compared to Elevance [14][22] Group 3: Shareholder Returns and Valuation - Elevance returned over $2 billion to shareholders in the first half of 2025, while UNH returned $9.5 billion, with UNH's dividend yield at 2.95% compared to Elevance's 2.21% [15][22] - Investors are willing to pay a premium for UNH, reflected in its forward P/E ratio of 17.23X versus Elevance's 9.72X [21][22] Group 4: Future Outlook - Both companies are facing unfavorable earnings estimates for 2025 due to rising costs, with UNH's EPS expected to decline by 40.1% year-over-year, while Elevance's is projected to decline by 8.8% [17][20][22] - The acquisition of Amedisys by UNH is expected to enhance its integrated care model and reduce medical costs by minimizing hospitalizations [9][22] - Elevance's Carelon platform is driving growth through digital and AI-enabled solutions, although it still lags behind UNH in profitability and capital efficiency [11][16][22]

Core Insights - Elevance Health, Inc. faced a legal setback as a federal judge dismissed its challenge against the Medicare Advantage star ratings set by the Centers for Medicare & Medicaid Services (CMS) [1][4] - The dismissal means Elevance will forgo an estimated $375 million in bonus payments for 2025 due to a rating that was rounded down from 3.749565 stars to 3.5 stars, just below the four-star threshold [2][8] - The outcome emphasizes the regulatory risks in the Medicare Advantage sector, potentially influencing operational strategies for Elevance and its peers [4] Financial Implications - Elevance's rating downgrade will result in a significant loss of bonus payments, estimated at $375 million for 2025 [2][8] - The company's shares have declined by 16.1% year-to-date, contrasting with the industry's growth of 0.2% [7] Industry Context - CMS issues annual star ratings that are critical for determining federal bonus payments and consumer enrollment in Medicare Advantage plans [3][8] - Other insurers, such as Centene Corporation and Humana Inc., have also faced challenges related to rating methodology changes, with varying outcomes [5][6] Valuation Metrics - Elevance currently trades at a forward price-to-earnings ratio of 9.72, significantly lower than the industry average of 15.25 [10] - The Zacks Consensus Estimate for Elevance's 2025 earnings is $30.15 per share, reflecting an 8.8% decline from the previous year [11]

UnitedHealth and Elevance told Colorado regulators they will exit some individual health plans in the state, the latest sign of instability in the ACA marketplaces https://t.co/dxKfuMxZY6 ...

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