A Look at CVS Health’s Valuation Following Annual Earnings and Recent Share Price Gains

CVS Health (CVS) shares traded steadily on Monday after the company released its latest earnings, which showed an increase in annual net income and modest revenue growth. Investors are now considering how these figures could shape the company’s outlook.

See our latest analysis for CVS Health.

CVS Health’s stock momentum has been impressive lately, with a 10.1% share price return over the past month and a massive 35% gain in the last 90 days. That acceleration has powered the company to an 86.5% year-to-date rise, while the total shareholder return over the past year stands at 46.7%. This suggests investors are warming to CVS’s improving fundamentals and outlook, even as the long-term three-year total return is still catching up.

If solid results in healthcare have you curious about where the next opportunity lies, it’s worth seeing what’s happening on the broader stage. Check out See the full list for free.

With shares on a sharp upward trajectory, the question now is whether CVS Health still offers value for new investors or if recent gains mean the market has already accounted for future growth potential.

Most Popular Narrative: 1.6% Undervalued

According to the most widely followed narrative, CVS Health's fair value sits at $83.79, slightly above its last close at $82.48. This signals limited but meaningful upside, tied to changes in digital health and integrated care.

Integration of recent and ongoing acquisitions (such as Aetna, Oak Street, and Signify Health), along with vertical alignment between insurance, pharmacy, and care delivery, provide substantial cross-selling and synergy opportunities. These factors support long-term operating margin and earnings growth as margin recovery initiatives gain traction.

Read the complete narrative.

Want to uncover the numbers analysts believe will supercharge CVS Health’s future? The big story in this narrative is an earnings and margin forecast that could upend expectations. Get the full scoop on what’s behind this valuation, including which bold levers might drive future growth. Curiosity piqued?

Result: Fair Value of $83.79 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, persistent margin pressures or continued reimbursement challenges in pharmacy and insurance could threaten CVS Health's future growth trajectory.

Find out about the key risks to this CVS Health narrative.

Build Your Own CVS Health Narrative

If you see the story unfolding differently or want to dive into the numbers on your own terms, it only takes a few minutes to craft your personal take. So why not Do it your way

A great starting point for your CVS Health research is our analysis highlighting 3 key rewards and 3 important warning signs that could impact your investment decision.

Looking for More Smart Investment Opportunities?

Turn momentum into results by acting today. The right screener could highlight your next winner, so avoid missing trends that others are already benefiting from.

• Capture long-term income potential by catching these 17 dividend stocks with yields > 3% with yields consistently above 3% and a history of rewarding shareholders.
• Pinpoint underpriced gems when you use these 873 undervalued stocks based on cash flows to zero in on stocks rich in cash flow but still overlooked by the market.
• Ride the wave of technological innovation by uncovering these 24 AI penny stocks poised to disrupt industries and set tomorrow’s trends.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com