A Fresh Look at Elevance Health (ELV) Valuation as Membership Growth Follows Push Into Digital Care and AI

Elevance Health (ELV) has been making headlines as it pushes past the boundaries of traditional insurance, diving deeper into primary care, digital health, and AI-driven healthcare platforms. These moves are more than buzzwords; they are driving measurable shifts, such as an 11% jump in Medicare Advantage memberships and a 5% uptick in individual sign-ups in the second quarter of 2025. Even as challenges persist in the ACA and Medicaid markets, Elevance is reminding investors of its adaptability and focus on delivering care that goes beyond the norm.

Over the past year, however, the company’s share price has not reflected the growth in its new business lines. While recent initiatives have generated positive chatter, Elevance Health’s stock is down over the past year and has yet to break out of its downward trend. Despite the momentum in membership numbers and the broader embrace of telehealth and pharmacy services, investors have not seen these changes fully reflected in the company’s valuation, at least not yet.

The major question for those considering Elevance Health now is whether these moves signal an inflection point for the stock. Is there meaningful upside remaining, or is the market already anticipating further growth?

Most Popular Narrative: 18% Undervalued

According to the narrative by NateF, Elevance Health is currently trading well below its calculated fair value. This may present a potentially attractive opportunity for investors focused on long-term growth prospects.

As a potential growth investment, Elevance Health offers a compelling mix of undervaluation and long-term growth drivers, particularly in the Medicare Advantage and value-based care segments. Although near-term risks such as Medicaid enrollment declines and cost pressures pose challenges, its diversified revenue base and focus on innovation provide resilience.

Curious what is fueling this bold projection? The narrative points to surprising profit and revenue growth dynamics, as well as unusual market conditions that could propel the stock much higher. Want to know which assumptions could shift the valuation equation and potentially change how investors view Elevance Health?

Result: Fair Value of $390.54 (UNDERVALUED)

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

However, persistent Medicaid enrollment declines and rising healthcare costs could challenge Elevance’s outlook. These factors may potentially limit any near-term recovery in the stock price.

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

Another View: DCF Model Puts Undervaluation in the Spotlight

Taking a different approach, our DCF model paints a similar picture and reinforces the idea that Elevance Health may be trading below its underlying value. Still, could there be factors the model misses?

Look into how the SWS DCF model arrives at its fair value.

Simply Wall St performs a discounted cash flow (DCF) on every stock in the world every day (check out Elevance Health for example). We show the entire calculation in full. You can track the result in your watchlist or portfolio and be alerted when this changes, or use our stock screener to discover undervalued stocks based on their cash flows. If you save a screener we even alert you when new companies match - so you never miss a potential opportunity.

Build Your Own Elevance Health Narrative

If you see things differently or want to dig into the numbers on your own terms, you can build a fresh narrative in just a few minutes. Do it your way.

A good starting point is our analysis highlighting 3 key rewards investors are optimistic about regarding Elevance Health.

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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.

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