Core Viewpoint - CVS Health and UnitedHealth Group are two major players in the U.S. healthcare market, both having transformed their business models significantly to offer comprehensive healthcare solutions [1][2]. Performance Comparison - CVS Health has shown a remarkable recovery in 2025, becoming the top performer in the S&P 500 with a year-to-date return of 56%, while UnitedHealth ranks 16th with a 16.5% gain [3]. CVS Health Insights - CVS Health is focusing on margin recovery in its Aetna business, which saw a 23% year-over-year revenue growth in Q4 despite an adjusted operating loss. The company projects $132 billion in healthcare benefits revenues for 2025 and aims for at least $1.5 billion in adjusted operating income [6][7]. - The company is executing a $2 billion multi-year cost efficiency initiative, expecting savings in 2025 to offset rising variable expenses [7]. - CVS Health generated $9.1 billion in operating cash flow in 2024, exceeding expectations, and projects $6.5 billion in cash flow for 2025, indicating strong financial stability [8]. UnitedHealth Group Insights - UnitedHealth faced challenges in 2024, including CMS Medicare rate cuts and a cyberattack, yet it deployed nearly $17 billion in growth capital and returned over $16 billion to shareholders [9]. - For 2025, UnitedHealth expects cash flow from operations to approach $33 billion, indicating robust profitability [10]. - Optum Health's revenues are projected to grow from $105 billion in 2024 to $117 billion in 2025, with a significant increase in patients receiving value-based care [11]. Earnings Projections - The Zacks Consensus Estimate for CVS Health's 2025 earnings per share suggests an 8.7% improvement from 2024 [13]. - The Zacks Consensus Estimate for UnitedHealth's 2025 EPS implies a 7.5% improvement over the previous fiscal year [15]. Valuation Comparison - CVS is trading at a forward P/E of 11.25X, above its 5-year median of 9.25X, while UnitedHealth is at 19.06X, below its 5-year median and high [18][19]. Conclusion - UnitedHealth is currently viewed as a stronger buy due to better margins, cash flow, and a more attractive valuation compared to CVS Health, which is facing challenges with elevated medical costs [21].

Core Viewpoint - CVS Health has emerged as a top performer in the S&P 500, with a year-to-date return exceeding 41% in 2025, significantly outperforming its competitors and the broader market [1][2]. Business Performance - CVS Health's diversified business model spans healthcare and retail, providing a range of health insurance products and pharmacy benefit management solutions [5]. - The company has shown strong cash generation capabilities, which have helped it navigate market sell-offs and inflationary pressures [6]. - CVS Health's recent biosimilar launch with Cordavis has successfully converted over 90% of eligible Humira patients to a biosimilar, generating nearly $1 billion in client savings [8]. Strategic Initiatives - The company is optimistic about its 2025 roadmap, focusing on strengthening its position in Medicare Advantage and expecting a margin recovery of 100 to 200 basis points [9]. - Improved Star Ratings in 2025 could provide a $700 million boost, with additional gains driven by pricing initiatives [10]. - CVS Health is advancing its innovative pharmacy models and integrating healthcare delivery assets to achieve profitable growth [11]. Valuation - CVS Health's forward 12-month price-to-earnings (P/E) ratio is 10.35X, which is a discount compared to the S&P 500's 18.56X [12]. - However, it trades at a premium to competitors like Walgreens Boots Alliance and Herbalife, indicating a higher price relative to expected earnings growth [13]. Challenges - The Aetna unit faces challenges from elevated service utilization and reimbursement pressures, leading to a high medical-benefit ratio [16][22]. - Concerns exist regarding the proposed 2026 Medicare Advantage advanced rate notice, which may not adequately address industry-wide cost trends [18]. - The current stock price is close to the average target price, suggesting limited upside potential for investors [19][22]. Market Sentiment - Investor confidence remains strong, supported by CVS Health's strategic initiatives and performance in the Pharmacy and Consumer Wellness segment [21].

Financial Data and Key Metrics Changes - For Q4 2024, revenue was $198.6 million, and adjusted EBITDA was $67.1 million, leading to a full year revenue of $792.3 million, a 6% increase year-over-year on a GAAP basis [29] - Full year adjusted EBITDA was $260.2 million, representing a 20% growth over 2023 [30] - Net income for 2024 was $16.4 million compared to a net loss of $8.9 million in 2023, while adjusted net income increased to $131.6 million from $114.6 million in 2023 [30][31] - Adjusted EBITDA margin improved to 32.8%, marking another year of margin expansion [30][32] Business Line Data and Key Metrics Changes - Prescription transactions revenue grew 5% year-over-year to $577.5 million, primarily due to a 7% increase in monthly active consumers [29][30] - Subscription revenue declined 8% to $86.5 million, largely due to the sunset of a retailer-specific prescription savings program [30] - Pharma manufacturer solutions revenue increased by 26% year-over-year to $107.2 million [30] Market Data and Key Metrics Changes - Nearly 30 million consumers used GoodRx in 2024, saving approximately $17 billion on medications, with a 3% year-over-year growth in the prescription discount segment [14][29] - The company's share of the prescription discount segment grew by 3% year-over-year in Q4 2024 [14] Company Strategy and Development Direction - The company aims to enhance the prescription experience for consumers and healthcare professionals, focusing on reducing friction and improving access to medications [10][12] - GoodRx is expanding its Integrated Savings Program (ISP) to include non-covered brands, addressing gaps in coverage and enhancing value for consumers and healthcare professionals [17][25] - The company is also increasing its partnerships with pharma manufacturers, growing from 150 to over 200 brands in 2024, and focusing on integrated access solutions and e-commerce capabilities [18][20] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the opportunities to make healthcare more affordable and accessible, particularly in light of potential regulatory changes favoring transparency and lower prices [13][28] - The company anticipates revenue growth in 2025 to be in the range of $810 million to $840 million, representing approximately 4% growth at the midpoint [33] - Management acknowledged potential headwinds from pharmacy store closures but remains confident in the overall growth trajectory of prescription transaction revenue [102] Other Important Information - The company has a strong balance sheet with $448.3 million in cash on hand and $500 million in outstanding debt, providing significant liquidity [32] - GoodRx is committed to returning excess cash to shareholders through share repurchases, with $290 million authorized for spend [75] Q&A Session Summary Question: How many new initiatives are included in the guidance? - Management indicated that the guidance accounts for some expansion in manufacturer programs and marketplace growth, particularly in brand expansion [39][40] Question: Can you comment on the pharma manufacturing solutions growth? - Management remains confident in achieving 20% growth in pharma manufacturer solutions, citing a significant increase in partnerships and validated results [48][49] Question: What is the current status of ISP rollouts with PBM partners? - Management noted ongoing discussions with PBM partners and emphasized the importance of wrapping non-covered brands to enhance value [56][58] Question: What are the headwinds reflected in the guidance? - Management acknowledged potential headwinds from pharmacy store closures but expects overall growth in prescription transaction revenue [102]