Can Elevance Health's Value-Based Care Strategy Fuel Long-Term Growth?

Core Insights - Elevance Health, Inc. (ELV) is focusing on expanding its value-based care model, which emphasizes patient outcomes rather than the quantity of care provided [1][2] - The company is particularly enhancing its value-based care offerings in behavioral health and oncology through its Carelon business, which integrates various healthcare services [2][8] Company Performance - Elevance Health's care delivery services target chronic and complex populations, providing tailored care both at home and virtually [3] - The acquisition of CareBridge in 2024 allows the company to offer virtual care to Medicaid and Medicare patients, enhancing its management of home and community-based services [3] - In the last reported quarter, Medicare Advantage memberships increased by 11% year over year, while total revenues rose by 13.4% [4][8] Competitive Landscape - Competitors such as UnitedHealth Group and Humana are also expanding in the value-based care space, with UnitedHealth's Optum division reporting a 5.8% year-over-year revenue growth in the first half of 2025 [5] - Humana's CenterWell business saw an 8.9% year-over-year revenue increase in the same period [6] Valuation and Estimates - Elevance Health's shares have decreased by 14.1% year-to-date, contrasting with a 0.7% decline in the industry [7] - The company trades at a forward price-to-earnings ratio of 9.62, significantly lower than the industry average of 15.16, and currently holds a Value Score of A [10] - The Zacks Consensus Estimate for Elevance Health's 2025 earnings is $30.15 per share, indicating an 8.8% decline from the previous year [11]