Elevance Health, Inc. ELV reported first-quarter 2025 adjusted earnings per share (EPS) of $11.97, which surpassed the Zacks Consensus Estimate by 6.8%. The bottom line increased 10.5% year over year. (See the Zacks Earnings Calendar to stay ahead of market-making news.)
Operating revenues of $48.8 billion rose 15.4% year over year. Moreover, the top line beat the consensus mark by 6%.
The strong quarterly results benefited from rising premiums and product revenues. Rising expenses and a decline in Medicaid memberships partially offset the upsides.
Elevance Health, Inc. Price, Consensus and EPS Surprise
Elevance Health, Inc. Price, Consensus and EPS Surprise
Elevance Health, Inc. price-consensus-eps-surprise-chart | Elevance Health, Inc. Quote
ELV’s Q1 Operational Update
Medical membership of Elevance Health was around 45.8 million as of March 31, 2025, which slipped 0.5% year over year. The decrease was due to attrition in its Medicaid business, partially offset by growth in Medicare Advantage and Individual ACA membership. The reported figure missed the Zacks Consensus Estimate of 46.2 million and our estimate of 46.3 million.
Premiums increased 14.5% year over year to $40.9 billion and also came in higher than the consensus mark of $38.7 billion. Product revenues of $5.8 billion increased 29.1% year over year and came higher than the Zacks Consensus Estimate of $5.1 billion and our estimate of $4.7 billion.
Net investment income rose 26.9% year over year to $590 million, which beat the consensus mark of $461.3 million. The adjusted operating margin deteriorated 70 basis points (bps) year over year to 6.7%.
Total expenses of $46.1 billion rose 16.3% year over year and were higher than our estimate of $42.5 billion. The year-over-year rise was due to higher benefit expenses, the cost of products sold, operating expenses and interest expenses.
The operating expense ratio improved 70 bps year over year to 10.9%. The benefit expense ratio of 86.4% deteriorated 80 bps year over year.
Q1 Segmental Results of ELV
Health Benefits
Operating revenues totaled $41.4 billion, which increased 11.2% year over year and also beat the Zacks Consensus Estimate of $39.8 billion. The metric benefited from increased premium yields, and rising Medicare Advantage and Individual ACA plan memberships.
Operating gains declined 3.1% year over year to $2.22 billion, lower than the consensus mark of $2.24 billion. The operating margin of 5.4% deteriorated 70 bps year over year.
Carelon
The segment’s operating revenues amounted to $16.7 billion, which rose 38% year over year. The uptick was due to the recent buyouts in home health and pharmacy services, higher CarelonRx product revenues and the scaling of innovative risk-based capabilities in Carelon Services. The reported figure outpaced the Zacks Consensus Estimate of $15.3 billion and our estimate of $15.2 billion.
The unit’s operating gain of $1.1 billion increased 34% year over year and beat the consensus mark of $956.3 million. The adjusted operating margin deteriorated 50 bps year over year to 6.6%.
Corporate & Other
Operating revenues amounted to $165 million in the first quarter. The unit incurred an operating loss of $140 million, wider than the prior-year quarter’s loss of $84 million.
ELV’s Financial Details (as of March 31, 2025)
Elevance Health exited the first quarter with cash and cash equivalents of $7.5 billion, which declined from the 2024-end level of $8.3 billion. Total assets of $119.7 billion increased from the $116.9 billion figure at 2024-end.
Long-term debt, less the current portion, amounted to $28.1 billion, down from the $29.2 billion figure as of Dec. 31, 2024. Short-term borrowings at the first-quarter end were $250 million, while the current portion of the long-term debt amounted to $1.6 billion.
Total equity of $42.6 billion grew from the 2024-end level of $41.4 billion.
Elevance Health generated net cash flow from operations of $1 billion in the first quarter of 2025, declining 48.6% year over year.
ELV: Capital Deployment Update
Elevance Health bought back shares worth $880 million in the first quarter. It had a leftover capacity of around $8.4 billion under its share buyback authorization as of March 31, 2025.
Elevance Health paid a quarterly dividend of $1.71 per share, adding up to a cash distribution worth $386 million.
ELV’s 2025 Outlook
The company reaffirmed adjusted EPS between $34.15 and $34.85, up from the 2024 reported figure of $33.04 per share. It expects more than 60% of profits to be realized in the first half of the year.
The operating margin for the Health Benefits segment was earlier estimated to witness a decrease of 50-25 basis points (bps) from the 2024 reported figure of 4.2%. Also, the operating margin for CarelonRx was expected to see 0-20 bps growth, while the same for Carelon Services was estimated to witness a decrease of 100-50 bps.
Management earlier expected operating revenues to witness high-single to low-double-digit growth in 2025 from $175.2 billion in 2024. Premium revenues were earlier estimated to witness low-double-digit growth in 2025 from the 2024 level of $144.2 billion. Medical enrolment was forecasted to be between 45.8 and 46.7 million in 2025, up from 45.7 million in 2024.
Net investment income was earlier anticipated to be $1.9 billion, down from $2.1 billion in 2024. Interest expenses were forecasted to be $1.5 billion in 2025, while operating cash flow was likely to be approximately $8 billion. Diluted shares were earlier estimated to decline to 225-226 million from 232.9 million at 2024-end.
ELV’s Zacks Rank & Key Picks
ELV currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the broader medical space are Aveanna Healthcare Holdings Inc. AVAH, Addus Homecare Corporation ADUS and Option Care Health, Inc. OPCH, each sporting a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Aveanna Healthcare’s current-year earnings of $0.12 per share has witnessed one upward revision in the past week against none in the opposite direction. Aveanna Healthcare beat earnings estimates in each of the trailing four quarters, with the average surprise being 163.3%. The consensus estimate for current-year revenues is pegged at $2.1 billion, implying 4.6% year-over-year growth.
The Zacks Consensus Estimate for Addus HomeCare’s current-year earnings of $6.04 per share. It has remained stable over the past week. Addus HomeCare beat earnings estimates in each of the trailing four quarters, with the average surprise being 5.8%. The consensus estimate for current-year revenues is pegged at $1.4 billion, implying 21.2% year-over-year growth.
The Zacks Consensus Estimate for Option Care Health’s current-year earnings of $1.68 per share has witnessed six upward revisions in the past 60 days against no movement in the opposite direction. Option Care Health beat earnings estimates in each of the trailing four quarters, with the average surprise being 15.9%. The consensus estimate for current-year revenues is pegged at $5.4 billion, calling for 8.9% year-over-year growth.
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