Health insurance provider Elevance Health (NYSE: EVH) reported revenue ahead of Wall Street’s expectations in Q1 CY2025, with sales up 14.5% year on year to $48.77 billion. Its non-GAAP profit of $11.97 per share was 4.3% above analysts’ consensus estimates.
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Elevance Health (ELV) Q1 CY2025 Highlights:
- Revenue: $48.77 billion vs analyst estimates of $46.43 billion (14.5% year-on-year growth, 5% beat)
- Adjusted EPS: $11.97 vs analyst estimates of $11.48 (4.3% beat)
- Adjusted EBITDA: $3.62 billion vs analyst estimates of $3.8 billion (7.4% margin, 4.6% miss)
- Management reiterated its full-year Adjusted EPS guidance of $34.50 at the midpoint
- Operating Margin: 6.5%, down from 8.2% in the same quarter last year
- Free Cash Flow Margin: 1.7%, down from 4% in the same quarter last year
- Customers: 45.83 million, up from 45.73 million in the previous quarter
- Market Capitalization: $92.07 billion
“At Elevance Health, our purpose—to improve the health of humanity—drives everything we do. In the first quarter, we made measurable progress reimagining the healthcare experience with personalized support, real-time digital solutions, and a whole-health model that improves outcomes and reduces cost. Through Carelon and our broader enterprise, we’re delivering on our strategy to be a lifetime trusted health partner—and elevating health beyond healthcare.”
Company Overview
Formerly known as Anthem until its 2022 rebranding, Elevance Health (NYSE: ELV) is one of America's largest health insurers, serving approximately 47 million medical members through its network-based managed care plans.
Health Insurance Providers
Upfront premiums collected by health insurers lead to reliable revenue, but profitability ultimately depends on accurate risk assessments and the ability to control medical costs. Health insurers are also highly sensitive to regulatory changes and economic conditions such as unemployment. Going forward, the industry faces tailwinds from an aging population, increasing demand for personalized healthcare services, and advancements in data analytics to improve cost management. However, continued regulatory scrutiny on pricing practices, the potential for government-led reforms such as expanded public healthcare options, and inflation in medical costs could add volatility to margins. One big debate among investors is the long-term impact of AI and whether it will help underwriting, fraud detection, and claims processing or whether it may wade into ethical grey areas like reinforcing biases and widening disparities in medical care.
Sales Growth
Reviewing a company’s long-term sales performance reveals insights into its quality. Any business can put up a good quarter or two, but many enduring ones grow for years. Thankfully, Elevance Health’s 10.9% annualized revenue growth over the last five years was decent. Its growth was slightly above the average healthcare company and shows its offerings resonate with customers.
Long-term growth is the most important, but within healthcare, a half-decade historical view may miss new innovations or demand cycles. Elevance Health’s recent performance shows its demand has slowed as its annualized revenue growth of 6.8% over the last two years was below its five-year trend. 
We can better understand the company’s revenue dynamics by analyzing its number of customers, which reached 45.83 million in the latest quarter. Over the last two years, Elevance Health’s customer base averaged 1.8% year-on-year declines. Because this number is lower than its revenue growth, we can see the average customer spent more money each year on the company’s products and services. 
This quarter, Elevance Health reported year-on-year revenue growth of 14.5%, and its $48.77 billion of revenue exceeded Wall Street’s estimates by 5%.
Looking ahead, sell-side analysts expect revenue to grow 7.8% over the next 12 months, similar to its two-year rate. This projection is above average for the sector and indicates its newer products and services will catalyze better top-line performance.
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Operating Margin
Operating margin is an important measure of profitability as it shows the portion of revenue left after accounting for all core expenses – everything from the cost of goods sold to advertising and wages. It’s also useful for comparing profitability across companies with different levels of debt and tax rates because it excludes interest and taxes.
Elevance Health was profitable over the last five years but held back by its large cost base. Its average operating margin of 6% was weak for a healthcare business.
Looking at the trend in its profitability, Elevance Health’s operating margin of 5.2% for the trailing 12 months may be around the same as five years ago, but it has decreased by 1.2 percentage points over the last two years. Still, we’re optimistic that Elevance Health can correct course and expand its profitability on a longer-term horizon due to its business quality.
This quarter, Elevance Health generated an operating profit margin of 6.5%, down 1.7 percentage points year on year. This reduction is quite minuscule and indicates the company’s overall cost structure has been relatively stable.
Earnings Per Share
We track the long-term change in earnings per share (EPS) for the same reason as long-term revenue growth. Compared to revenue, however, EPS highlights whether a company’s growth is profitable.
Elevance Health’s remarkable 11.5% annual EPS growth over the last five years aligns with its revenue performance. This tells us it maintained its per-share profitability as it expanded.
In Q1, Elevance Health reported EPS at $11.97, up from $10.64 in the same quarter last year. This print beat analysts’ estimates by 4.3%. Over the next 12 months, Wall Street expects Elevance Health’s full-year EPS of $34.30 to grow 5.3%.
Key Takeaways from Elevance Health’s Q1 Results
We liked that Elevance Health beat analysts’ revenue expectations this quarter. We were also happy its full-year EPS guidance narrowly outperformed Wall Street’s estimates. On the other hand, its customer base and EBITDA both missed. Overall, we think this was a mixed quarter. The stock remained flat at $410 immediately following the results.
Sure, Elevance Health had a solid quarter, but if we look at the bigger picture, is this stock a buy? We think that the latest quarter is only one piece of the longer-term business quality puzzle. Quality, when combined with valuation, can help determine if the stock is a buy. We cover that in our actionable full research report which you can read here, it’s free.
