CVS Health CorporationCVSNYSE
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Executive Summary
Latest Data: Dec 2025Healthcare•Medical - Healthcare Plans
$99.8BLarge Cap
A mega-cap enterprise, operating profitably priced at a premium.
Key Investment Themes
Mature business (8% growth)
Premium valuation (56.4x P/E)
Business Narrative
CVS Health Corporation provides health services in the United States. The company's Health Care Benefits segment offers traditional, voluntary, and consumer-directed health insurance products and related services. It serves employer groups, individuals, college students, part-time and hourly workers, health plans, health care providers, governmental units, government-sponsored plans, labor groups, and expatriates.
HealthcareMedical - Healthcare Plans
Mature & Stable
Revenue Mix
Single segment business
Bear Case
- -Premium valuation leaves limited margin of safety
Company at a Glance
Business Performance
Key Highlights
Positive Signals
- Free cash flow growing strongly, indicating quality earnings
Watch Areas
- Thin profit margins under 5%
- Current liabilities exceed current assets
- Trading 123% above 5-year average valuation
- Premium valuation requires continued strong execution
Financial Health
Liquidity
Concern
Current Ratio0.84
<1.0 = Weak
Cash & Equivalents$8.5B
Leverage
Watch
Debt / Equity1.06
1.0-2.0 = Moderate
Interest Coverage3.33x
2-5x = Adequate
Efficiency
Concern
Return on Equity2.4%
<8% = Weak
Return on Capital4.9%
<8% = Weak
Valuation Assessment
Market Cap
$99.8B
Large Cap
P/E (TTM)
56.4x
Elevated
vs 5Y avg: 25.3x (+123%)
P/S (TTM)
0.2x
Discounted
vs 5Y avg: 0.3x (-19%)
EV/EBITDA
17.4x
In-line
vs 5Y avg: 12.5x
(+39%)
(+39%)
P/E Historical Range (5Y)
Min: 12.2xAvg: 25.3xNow: 56.4xMax: 56.9x
P/S Historical Range (5Y)
Min: 0.2xAvg: 0.3xNow: 0.2xMax: 0.5x
EV/EBITDA Historical Range (5Y)
Min: 9.5xAvg: 12.5xNow: 17.4xMax: 17.4x
Valuation Corridor
CHEAP
FCF Yield
7.8%
vs Cost of Capital ~8.0% = Strong
P/E Corridor (5Y)56.4x
12.2xFair: 12.2x-44.2x56.9x
P/S Corridor (5Y)0.2x
0.2xFair: 0.2x-0.4x0.5x
EV/EBITDA Corridor (5Y)17.4x
9.5xFair: 9.5x-16.0x17.4x
Detailed Financials
Comprehensive financial statement data for deep analysis
| Metric | Dec 21 | Dec 22 | Dec 23 | Dec 24 | Dec 25 |
|---|---|---|---|---|---|
| Return on Equity | - | - | - | - | - |
| Return on Invested Capital | - | - | - | - | - |
| Gross Margin | 17.8% | 16.9%↓5.3% | 15.2%↓10.0% | 13.8%↓9.4% | 13.8%↓0.1% |
| Operating Margin | 4.6% | 2.5%↓45.9% | 3.8%↑55.7% | 2.3%↓40.5% | 2.6%↑13.1% |
| Net Margin | 2.7% | 1.3%↓51.2% | 2.3%↑74.4% | 1.2%↓46.9% | 0.4%↓64.5% |
| Earnings Yield | - | - | - | - | - |
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