Elevance Health’s fourth quarter was marked by ongoing pressures in its core Medicaid and Medicare businesses, but management credited disciplined portfolio adjustments and cost management for maintaining performance aligned with expectations. CEO Gail Boudreaux highlighted that the company’s actions to reposition its book of business—such as exiting lower-margin geographies and tightening pricing—were aimed at stabilizing margins and setting a foundation for future growth. The quarter also saw continued revenue momentum in commercial accounts and growing demand for Carillon’s health solutions, despite the headwinds from lower risk-based membership.
Is now the time to buy ELV? Find out in our full research report (it’s free for active Edge members).
Elevance Health (ELV) Q4 CY2025 Highlights:
- Revenue: $49.31 billion vs analyst estimates of $49.92 billion (9.6% year-on-year growth, 1.2% miss)
- Adjusted EPS: $3.33 vs analyst estimates of $3.09 (7.7% beat)
- Adjusted EBITDA: $1.07 billion vs analyst estimates of $1.38 billion (2.2% margin, 22.5% miss)
- Adjusted EPS guidance for the upcoming financial year 2026 is $25.50 at the midpoint, missing analyst estimates by 4.9%
- Operating Margin: 1.2%, down from 2.7% in the same quarter last year
- Customers: 45.23 million, down from 45.37 million in the previous quarter
- Market Capitalization: $75.26 billion
While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions From Elevance Health’s Q4 Earnings Call
-
A.J. Rice (UBS) asked if the cost trend assumptions for 2026 differ from 2025 across Medicaid, Medicare, and commercial lines. CFO Mark Kaye replied that trends are expected to remain elevated, with some moderation in Medicaid and continued pressure in ACA and Medicare due to membership mix.
-
Andrew Mok (Barclays) questioned the larger-than-expected declines in Medicare membership. President Felicia Norwood clarified that losses were mainly in less profitable products and geographies, with a focus on margin improvement and dual-eligible members.
-
Justin Lake (Wolfe Research) requested more detail on margin drivers and the impact of pricing and cost trends. Kaye explained that margins were in line with expectations, with Medicaid pressure offset by Medicare and ACA improvements, and carried forward cost trend assumptions for 2026.
-
Lance Wilkes (Bernstein) asked about the Medicaid rate outlook and medical management opportunities. Norwood described ongoing rate negotiations with states, noting that while rates are increasing, they still lag trends, and emphasized ongoing cost management and program integrity efforts.
-
Scott Fidel (Goldman Sachs) sought an update on capital deployment and M&A priorities. Kaye stated that near-term capital allocation will prioritize balance sheet strength and investments in core capabilities, with a reduced focus on M&A and greater emphasis on share repurchases in 2026.
Catalysts in Upcoming Quarters
Looking ahead, our analyst team will closely monitor (1) state-level Medicaid rate adjustments and the impact of new eligibility requirements on membership and margins, (2) the pace of Medicare Advantage portfolio repositioning and the resulting margin trajectory, and (3) the effectiveness of technology investments in analytics, care coordination, and specialty pharmacy. Progress on integrating Carillon’s services and scaling whole health solutions will also be important signposts for Elevance Health’s ability to stabilize and grow earnings.
Elevance Health currently trades at $337.50, up from $322.92 just before the earnings. At this price, is it a buy or sell? See for yourself in our full research report (it’s free).
The Best Stocks for High-Quality Investors
Your portfolio can’t afford to be based on yesterday’s story. The risk in a handful of heavily crowded stocks is rising daily.
The names generating the next wave of massive growth are right here in our Top 5 Growth Stocks for this month. This is a curated list of our High Quality stocks that have generated a market-beating return of 244% over the last five years (as of June 30, 2025).
Stocks that have made our list include now familiar names such as Nvidia (+1,326% between June 2020 and June 2025) as well as under-the-radar businesses like the once-small-cap company Comfort Systems (+782% five-year return). Find your next big winner with StockStory today.
