Is This “Strong Buy” Health Insurance Company a Bargain?


Elevance Health Inc. (ELV) is a health advantages company. It assists consumers, families, and communities along the care journey by linking them to the care, support, and resources they should live healthy lives. It provides medical, digital, pharmaceutical, behavioral, clinical, and care solutions to about 118 million people.

Originally often known as Anthem, Inc. (ANTM), the firm modified its name to Elevance Health Inc. in June 2022.

By way of forward Non-GAAP P/E, the stock is currently trading at 16.97x, 12.6% lower than the industry average of 19.43x. Also, its forward EV/Sales of 0.88x is 75.9% lower than the industry average of three.67x. Furthermore, ELV’s forward Price/Sales of 0.76x is 82.9% lower than the industry average of 4.47x.

The stock has gained 26.6% over the past yr and 29.2% over the past nine months to shut its last trading session at $485.98. The corporate is well-positioned to realize within the ever-evolving healthcare industry through its various strategic operational advancements.

Here’s what could shape ELV’s performance within the near term:

Strategic Acquisition

In May, ELV (formerly often known as Anthem Inc.) announced the completion of its acquisition of Integra Managed Care, a Latest York-based Managed Long-Term Care Plan that assists individuals with long-term care requirements and disabilities in living securely and independently in their very own homes.

“We’re pleased to finish this acquisition and work alongside our recent colleagues as we proceed to grow our Medicaid business and enhance the healthcare experience for all of our members,” said Felicia Norwood, Executive Vice President of Anthem’s Government Business Division.

Robust Financials

In the course of the first quarter ended March 31, 2022, ELV’s total revenue increased 17.6% year-over-year to $38.09 billion. The corporate’s net income grew 7.7% from the year-ago value to $1.79 billion, while its EPS amounted to $244.4.

Its money and money equivalents got here in at $6.16 billion, representing a rise of 26.3% for the three months ended March 31, 2022.

Impressive Growth Prospects

Street expects ELV’s revenues and EPS to rise 12.3% and 10.2% year-over-year to $153.78 billion and $28.64, respectively, in fiscal 2022. As well as, ELV’s EPS is predicted to rise at a 12.6% CAGR over the subsequent five years.

Furthermore, the corporate has a formidable earnings surprise history, because it topped Street EPS estimates in the entire trailing 4 quarters.

Consensus Rating and Price Goal Indicate Potential Upside

Of the 20 Wall Street analysts that rated ELV, 16 rated it Buy, and 4 rated it Hold. The 12-month median price goal of $568.40 indicates a 16.9% potential upside. The worth targets range from a low of $335.00 to a high of $642.00.

POWR Rankings Reflect Solid Prospects

ELV has an overall grade of A, equating to a Strong Buy rating in our proprietary POWR Rankings system. The POWR Rankings are calculated considering 118 various factors, with each factor weighted to an optimal degree.

Our proprietary rating system also evaluates each stock based on eight different categories. ELV has a B grade for Quality, Growth, and Value. ELV’s solid earnings and revenue growth potential is consistent with the Quality and Growth grade. As well as, the corporate’s lower-than-industry multiples are in sync with the Value grade.

Of the 11 stocks within the A-rated Medical – Health Insurance industry, ELV is ranked #1.

Beyond what I stated above, we have now graded ELV for Sentiment, Stability, and Momentum. Get all ELV rankings here.

Bottom Line

ELV has gained 29.3% over the past month. Its impressive growth attributes and continued effort to spice up its operational capabilities should enable it to witness robust growth within the near term. As well as, because the stock is currently trading at a big discount to its peers, we predict it may very well be sensible to scoop up its shares now.

How Does Elevance Health Inc. (ELV) Stack Up Against its Peers?

ELV has an overall POWR Rating of A, which equates to a Strong Buy rating.  Try these other stocks inside the same industry with A (Strong Buy) rankings: Cigma Corp. (CI), UnitedHealth Group Inc. (UNH), and Centene Corp. (CNC).

CI shares were trading at $260.88 per share on Tuesday afternoon, down $7.15 (-2.67%). Yr-to-date, CI has gained 14.64%, versus a -20.25% rise within the benchmark S&P 500 index in the course of the same period.

In regards to the Writer: Pragya Pandey

Pragya is an equity research analyst and financial journalist with a passion for investing. In college she majored in finance and is currently pursuing the CFA program and is a Level II candidate. More…

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