CVS Health Corp
Exchange: NYSESector: HealthcareIndustry: Healthcare Plans
CVS Caremark Corporation (CVS Caremark), together with its subsidiaries, is a pharmacy health care provider in the United States. CVS Caremark provides pharmacy services through its pharmacy benefit management (PBM), mail order and specialty pharmacy division, CVS Caremark Pharmacy Services; approximately 7,300 CVS/pharmacy retail stores; retail-based health clinic subsidiary, MinuteClinic, and its online retail pharmacy, CVS.com. The Company operates in three business segments: Pharmacy Services, Retail Pharmacy and Corporate. Its corporate segment provides management and administrative services to support the overall operations of the Company. In April 2012, Health Net, Inc.'s subsidiary, Health Net Life Insurance Company, sold its Medicare stand-alone Prescription Drug Plan (Medicare PDP) business to a subsidiary of CVS Caremark. In February 2013, it bought Drogaria Onofre.
Did you know?
Free cash flow has been growing at -4.7% annually.
Current Price
$82.01
-0.10%GoodMoat Value
$415.20
406.3% undervaluedProfile
Valuation (TTM)
Market Cap$104.11B
P/E58.88
EV$159.85B
P/B1.38
Shares Out1.27B
P/Sales0.26
Revenue$402.07B
EV/EBITDA32.76
CVS Health Corp (CVS) Stock Analysis
GoodMoat Analysis
CVS Health is a major integrated healthcare company with a potentially durable moat from its vertical integration and scale, but its current valuation appears unfavourable with low profitability and a high P/E ratio. The GoodMoat target price suggests a significant margin of safety, but this conflicts with the fundamental data provided. This discrepancy makes the stock a high-priority candidate for deeper due diligence to reconcile the numbers.
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CVS Health operates as a vertically integrated healthcare giant, combining a leading pharmacy benefits manager (PBM), a vast retail pharmacy network, and health insurance via Aetna. This structure creates a potential moat through vertical integration (controlling multiple layers of the healthcare value chain) and significant scale privilege in its retail and PBM operations. Applying the GoodMoat framework, it likely scores well on criteria like switching costs and regulatory barriers, suggesting a durable competitive advantage.
However, the fundamental data presents significant concerns for a value investor. Key quality indicators are weak: a profit margin of 0.4%, an ROE of 2.4%, and a P/E of 51.8 are far from the high-return, profitable profile the framework seeks. The Debt/Equity ratio of 1.06 also indicates a leveraged balance sheet. While the 8.5% FCF yield is attractive, it exists alongside these poor profitability metrics.
The Decision Framework creates a clear conflict. The implied moat suggests we can proceed to valuation, but the quality metrics are largely unfavourable. The valuation assessment is paradoxical: the current P/E of 51.8 appears extreme for a low-margin business, yet the provided GoodMoat target of $415.20 implies a massive margin of safety. This stark contradiction between the target price and the reported fundamentals means an investor cannot proceed without first reconciling which data set—the target or the core financials—accurately reflects the business. The stock is not a clear pass or fail but a high-priority case for investigation.
Analysis based on data as of 2024-05-15.
Market Cap$104.11B
Current Price$82.01
P/E Ratio58.88
Forward P/E—
PEG Ratio0.76
EPS$1.39
Book Value$59.25
P/B Ratio1.38
CVS Financial Charts
FCF vs CAPEX
FCFCAPEX
Forward estimates use -4.7% FCF growth (CAGR)
Cash vs Debt
Net Debt: 71.5B
Revenue
256.8B
FY19
268.7B
FY20
292.1B
FY21
322.5B
FY22
357.8B
FY23
372.8B
FY24
402.1B
FY25
Net Income
6.6B
FY19
7.2B
FY20
8.0B
FY21
4.3B
FY22
8.3B
FY23
4.6B
FY24
1.8B
FY25
CVS 52-Week Range
$57.32
$83.90
50-Day MA: $76.08200-Day MA: $74.50
Did you know?
Free cash flow has been growing at -4.7% annually.
CVS Health Corp (CVS) Financial Summary
CVS Health Corp (CVS) is a Healthcare company in the Healthcare Plans industry, listed on NYSE. The stock currently trades at $82.01 with a market capitalization of $104.11B.
Key valuation metrics include a P/E ratio of 58.88, price-to-book ratio of 1.38, and EPS of $1.39. The company reports a profit margin of 0.4% and return on equity of 2.4%.
CVS Key Financial Metrics
| Metric | Value |
|---|---|
| Market Cap | $104.11B |
| P/E Ratio | 58.88 |
| EPS | $1.39 |
| P/B Ratio | 1.38 |
| P/S Ratio | 0.26 |
| EV/EBITDA | 32.76 |
| Dividend Yield | 3.26% |
| Profit Margin | 0.4% |
| Return on Equity | 2.4% |
| Debt/Equity | 1.06 |
CVS Revenue & Earnings History
| Year | Revenue | Net Income |
|---|---|---|
| FY19 | $256.78B | $6.63B |
| FY20 | $268.71B | $7.18B |
| FY21 | $292.11B | $8.00B |
| FY22 | $322.47B | $4.31B |
| FY23 | $357.78B | $8.34B |
| FY24 | $372.81B | $4.61B |
| FY25 | $402.07B | $1.77B |
CVS Health Corp (CVS) Valuation
Based on GoodMoat's DCF model, CVS Health Corp has a fair value estimate of $415.20. At the current price of $82.01, the stock appears 80.2% undervalued relative to our intrinsic value estimate.
CVS Quality Indicators
CVS Health Corp maintains a profit margin of 0.4% and an operating margin of 1.2%. Return on equity stands at 2.4%. The current ratio is 0.84. Debt-to-equity ratio is 1.06.
About CVS Health Corp
CVS Caremark Corporation (CVS Caremark), together with its subsidiaries, is a pharmacy health care provider in the United States. CVS Caremark provides pharmacy services through its pharmacy benefit management (PBM), mail order and specialty pharmacy division, CVS Caremark Pharmacy Services; approximately 7,300 CVS/pharmacy retail stores; retail-based health clinic subsidiary, MinuteClinic, and its online retail pharmacy, CVS.com. The Company operates in three business segments: Pharmacy Services, Retail Pharmacy and Corporate. Its corporate segment provides management and administrative services to support the overall operations of the Company. In April 2012, Health Net, Inc.'s subsidiary, Health Net Life Insurance Company, sold its Medicare stand-alone Prescription Drug Plan (Medicare PDP) business to a subsidiary of CVS Caremark. In February 2013, it bought Drogaria Onofre.
CVS Free Cash Flow
CVS Health Corp generated $7.81B in trailing twelve-month free cash flow, representing an FCF yield of 7.50%. This strong FCF yield suggests the company generates substantial cash relative to its market value.
CVS Shares Outstanding
CVS Health Corp has 1.27 billion shares outstanding at a share price of $82.01, giving it a market capitalization of $104.11B.
CVS Recent Insider Trades
Recent insider transactions at CVS Health Corp include:
| Insider | Type | Shares | Value |
|---|---|---|---|
| Nelson Steven H (EVP and President, Aetna) | BUY | 24 | $1288.80 |