Core Insights - Elevance Health, Inc. is facing challenges from rising medical costs, slower Medicaid recovery, and increased utilization, leading to a reduced outlook for 2025 [1][5] - The company reported a significant increase in benefits expenses and cost of products sold in the first half of the year [1] Financial Performance - Benefits expense surged nearly 18% to over $72 billion, while cost of products sold increased almost 19% to $10.3 billion [1] - The second-quarter benefit expense ratio reached 88.9%, up 260 basis points year over year, with a projected full-year ratio of about 90% compared to 88.5% in 2024 [2][9] Membership and Growth - Commercial individual memberships rose 9.7% in the first half of 2025, following a 25.6% increase in 2024, indicating strong growth in the commercial segment [3][9] - Carelon's revenue is expected to grow nearly 30% in 2025, driven by a 60% surge in Carelon Services [4][9] Competitive Landscape - Other companies in the health benefits space, such as UnitedHealth Group and Centene Corporation, are also experiencing pressure from rising medical costs [6] - UnitedHealth's medical care ratio deteriorated to 89.4%, while Centene's health benefits ratio reached 93%, indicating industry-wide challenges [7] Valuation and Estimates - Elevance's shares have declined 20.7% year-to-date, compared to a 3.9% decline in the industry [8] - The forward price-to-earnings ratio for Elevance is 9.19, significantly lower than the industry average of 14.57, with a Zacks Consensus Estimate for 2025 earnings at $30.59 per share, reflecting a 7.4% decline from the previous year [10][11]

Core Insights - Elevance Health reported revenue of $49.42 billion for the quarter ended June 2025, reflecting a 14.3% increase year-over-year, and an EPS of $8.84, down from $10.12 in the same quarter last year [1] - The revenue exceeded the Zacks Consensus Estimate of $48.15 billion by 2.64%, while the EPS fell short of the consensus estimate of $9.16 by 3.49% [1] Financial Performance Metrics - Benefit Expense Ratio was reported at 88.9%, slightly above the average estimate of 88.4% from 16 analysts [4] - Medical Membership - Commercial Risk-Based stood at 4.96 million, below the estimated 5 million [4] - Medical Membership - Commercial Fee-Based was reported at 27.15 million, slightly below the estimate of 27.22 million [4] - Service fees revenue was $2.11 billion, lower than the $2.23 billion estimate, representing a year-over-year decline of 7.4% [4] - Product revenue reached $6.04 billion, slightly below the $6.14 billion estimate, but showed a 9.3% increase year-over-year [4] - Net investment income was $486 million, exceeding the estimate of $464.67 million, but down 4.3% from the previous year [4] - Premiums revenue was reported at $41.27 billion, surpassing the estimate of $39.64 billion, with a year-over-year increase of 16.5% [4] - Total operating revenue from Health Benefits was $41.58 billion, above the estimate of $40.84 billion, reflecting an 11.9% year-over-year increase [4] - Total operating revenue from Carelon was $18.08 billion, exceeding the estimate of $16.86 billion, with a significant year-over-year increase of 35.8% [4] - Total operating revenue from Carelon Services was $7.44 billion, above the estimate of $6.8 billion, representing a remarkable 63.7% increase year-over-year [4] - Total operating revenue from CarelonRx was $10.64 billion, surpassing the estimate of $10.05 billion, with a year-over-year increase of 21.3% [4] Stock Performance - Elevance Health's shares have returned -8.3% over the past month, contrasting with the Zacks S&P 500 composite's increase of 4.2% [3] - The stock currently holds a Zacks Rank 3 (Hold), indicating expected performance in line with the broader market in the near term [3]

Financial Performance - Elevance Health's operating revenue for 2Q 2025 grew by 143% to $494 billion [7, 9] - The medical loss ratio was 889% [9] - Adjusted operating expense ratio improved by 140 bps to 100% [9] - Operating cash flow was $21 billion [9] - Adjusted diluted earnings per share (EPS) decreased by 142% to $884 [7] Segment Results - Health Benefits operating revenue increased by 119% to $416 billion [11] - Health Benefits adjusted operating margin decreased by 200 bps to 38% [12] - Carelon revenue increased by 358% to $181 billion [14] - CarelonRx revenue increased by 213% to $1064 billion [33] - Carelon Services revenue increased by 637% to $7441 billion [33] Strategic Focus - Elevance Health is focused on simplifying healthcare, affordability, and accessibility for consumers [3, 5] - The company aims to deepen clinical and business partnerships with care providers [4, 5] - Elevance Health is targeting at least 12% average annual growth in Adjusted Diluted Earnings Per Share [19, 20]

Core Viewpoint - Elevance Health, Inc. (ELV) is expected to report its second-quarter 2025 results on July 17, 2025, with earnings estimated at $9.20 per share and revenues of $48.13 billion, reflecting an 11.4% year-over-year increase in revenues [1][6]. Financial Estimates - The second-quarter earnings estimate has declined by 1.8% over the past 60 days, indicating a year-over-year decline of 9.1% in earnings, while the revenue estimate suggests an 11.4% year-over-year increase [2]. - For the full year 2025, the revenue estimate stands at $195 billion, representing an 11.3% year-over-year increase, and the EPS estimate is $34.40, implying a 4.1% year-over-year increase [3]. Earnings Performance - Elevance has beaten the consensus estimate in three of the last four quarters, with an average surprise of negative 1.2% [3]. - The current Earnings ESP is 0.00%, and the Zacks Rank is 3 (Hold), indicating uncertainty regarding an earnings beat this quarter [4]. Revenue Drivers - The consensus estimate for product revenues indicates an 11.1% growth from the previous year's $5.5 billion, while premiums are expected to increase by 11.9% year-over-year [5]. - Growth in CarelonRx and recent acquisitions in home health and pharmacy services are anticipated to support revenue growth [8]. Expense Considerations - Elevated expenses are expected due to significant investments in digital capabilities, with total expenses projected to rise nearly 11% year-over-year [9]. - The benefit expense ratio is estimated at 88.4, higher than the previous year's 86.3, which may impact profit margins [9]. Segment Performance - The Health Benefits segment's operating income is expected to decrease by 12.4% year-over-year, with declining Medicaid memberships affecting premium growth [10].

Core Viewpoint - Elevance Health, Inc. reported strong first-quarter 2025 results with adjusted EPS of $11.97, exceeding estimates and showing a year-over-year increase of 10.5% [1][2] Financial Performance - Operating revenues reached $48.8 billion, a 15.4% increase year over year, surpassing consensus estimates by 6% [1][4] - Premiums rose 14.5% year over year to $40.9 billion, exceeding the consensus mark of $38.7 billion [4] - Product revenues increased by 29.1% year over year to $5.8 billion, also beating estimates [4] - Net investment income grew 26.9% year over year to $590 million, surpassing the consensus of $461.3 million [4] - Total expenses were $46.1 billion, up 16.3% year over year, higher than estimates due to increased benefit expenses and operating costs [5] Membership and Operational Update - Medical membership stood at approximately 45.8 million, a 0.5% decline year over year, attributed to Medicaid attrition [3] - The reported membership figure fell short of the Zacks Consensus Estimate of 46.2 million [3] Segment Performance - Health Benefits segment revenues totaled $41.4 billion, an 11.2% year-over-year increase, beating estimates [6] - Carelon segment revenues reached $16.7 billion, a 38% increase year over year, driven by acquisitions and product revenue growth [7] - Corporate & Other segment reported revenues of $165 million with an operating loss of $140 million, wider than the previous year's loss [9] Financial Position - Cash and cash equivalents were $7.5 billion, down from $8.3 billion at the end of 2024 [10] - Total assets increased to $119.7 billion from $116.9 billion at the end of 2024 [10] - Long-term debt decreased to $28.1 billion from $29.2 billion [11] - Total equity grew to $42.6 billion from $41.4 billion at the end of 2024 [11] Capital Deployment - The company repurchased shares worth $880 million in Q1 2025, with $8.4 billion remaining under its buyback authorization [12] - A quarterly dividend of $1.71 per share was paid, totaling $386 million [12] 2025 Outlook - The company reaffirmed adjusted EPS guidance between $34.15 and $34.85, an increase from the 2024 figure of $33.04 [13] - Operating revenues are expected to grow in the high-single to low-double digits from $175.2 billion in 2024 [15] - Medical enrollment is forecasted to be between 45.8 and 46.7 million in 2025 [15]