Elevance Health, Inc.\u00a0ELV has endured a bruising 2025 so far, sliding 20.3% year to date and lagging both its industry peers and the S&P 500 Index. Shares closed Friday at $293.99, hovering just above the lower edge of their 52-week range of $273.71\u2013$567.26. For value hunters, the stock\u2019s current level may look like an attractive entry point into a leading health benefits player; after all, buying closer to the low than the high has its appeal, right?<\/p>\n
Based in Indianapolis, IN, Elevance carries a market capitalization of $66.2 billion. Its peers like UnitedHealth Group Incorporated UNH and Centene Corporation CNC have also stumbled this year, in some cases even more sharply. In fact, UnitedHealth\u2019s sheer weight in the health insurance space has dragged down the sector on multiple occasions, while Centene has also contributed to the selling pressure.<\/p>\n
Zacks Investment Research <\/p>\n
Image Source: Zacks Investment Research<\/p>\n
Several headwinds are hitting Elevance simultaneously. Medicaid membership has shrunk 15.1% in 2024 and another 4.1% in the first half of 2025, erasing members and the revenues they bring. Medicare Supplement and employer group risk-based memberships in the commercial business are also slipping. The situation is likely to remain choppy into 2026, especially with the GOP\u2019s recently passed tax-and-policy package, which slashes Medicaid funding and overhauls Affordable Care Act eligibility and enrollment rules.<\/p>\n
Meanwhile, medical costs are climbing as utilization grows, compressing margins. In the second quarter, the company\u2019s benefit expense ratio worsened 260 basis points year over year to 88.9%. Full-year benefit expense ratio is expected at approximately 90%, with the second half likely to witness steeper jumps.<\/p>\n
Investor sentiment soured further as management cut its full-year 2025 outlook. The company now expects adjusted EPS to be around $30, lower than the previously forecasted range of $34.15-$34.85, down from the 2024 reported figure of $33.04. Its peers, such as UnitedHealth and Centene, also lowered their expectations for the current year.<\/p>\n
Adding to the unease, President Donald Trump\u2019s sharp criticism of pharmacy benefit managers (PBMs) in his push to lower drug prices has put companies with PBM exposure \u2014 including Elevance, UnitedHealth and Cigna \u2014 under a regulatory and political cloud. Centene sidestepped potential trouble by exiting its PBM operations a few years ago, executing the move as part of its broader value-creation strategy.<\/p>\n
Story Continues <\/p>\n
Over the past month, 2025 and 2026 earnings estimates have each seen double-digit downward revisions, 16 and 14 cuts, respectively, with no upgrades in sight. The current Zacks Consensus Estimate calls for 2025 EPS of $30.59, a 7.4% decline from the prior year, despite revenue projections implying a 12.4% gain.<\/p>\n
The company\u2019s earnings track record has been mixed, beating expectations twice in the past four quarters but missing twice as well, for an average surprise of negative 2.3%.<\/p>\n
Elevance Health, Inc. Price, Consensus and EPS Surprise <\/p>\n
Elevance Health, Inc. price-consensus-eps-surprise-chart | Elevance Health, Inc. Quote<\/p>\n
At a forward 12-month P\/E of 9.24X, Elevance Health trades well below both its five-year median of 13.44X and the industry average of 14.32X, a valuation gap that reflects investor caution. UnitedHealth and Centene, despite suffering steeper sell-offs, command higher multiples of 14.05X and 9.94X, respectively.<\/p>\n
Zacks Investment Research <\/p>\n
Image Source: Zacks Investment Research<\/p>\n
Despite the near-term turbulence, Elevance retains solid long-term growth levers. Product expansion, revenue diversification, rate hikes, and selective growth in commercial lines should help offset pressures. Premium increases and a sharper focus on optimizing the government business position the company to benefit from structural healthcare trends, including rising health spending, an aging population and the growing burden of chronic disease.<\/p>\n
The company reallocates resources to more profitable areas and makes prudent acquisitions. ELV’s return on invested capital of 9.36% is higher than the industry average of 5.80%, which indicates that the company is more efficient in generating returns from its capital than the industry.<\/p>\n
Its consistent dividend payouts and stock repurchases boost shareholders’ value. Elevance\u2019s dividend yield of 2.33% is higher than the industry average of 1.37%. ELV bought back shares worth $379 million in the second quarter alone. It had a leftover capacity of roughly $8 billion under its share buyback authorization as of June 30, 2025.<\/p>\n
While Elevance\u2019s beaten-down valuation and strong long-term industry tailwinds might tempt bargain hunters, the near-term outlook remains clouded by shrinking memberships, rising medical costs, regulatory risks and deteriorating analyst sentiment. With earnings estimates moving sharply lower and the stock currently carrying a Zacks Rank #5 (Strong Sell), investors may want to stay on the sidelines until the company\u2019s fundamentals show clearer signs of recovery.<\/p>\n
You can see\u00a0the complete list of today\u2019s Zacks #1 Rank (Strong Buy) stocks here.<\/p>\n
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report<\/a><\/p>\n UnitedHealth Group Incorporated (UNH) : Free Stock Analysis Report<\/a><\/p>\n Centene Corporation (CNC) : Free Stock Analysis Report<\/a><\/p>\n Elevance Health, Inc. (ELV) : Free Stock Analysis Report<\/a><\/p>\n This article originally published on Zacks Investment Research (zacks.com).<\/a><\/p>\n