2 Reasons to Like ELV (and 1 Not So Much)

Elevance Health has followed the market’s trajectory closely, rising in tandem with the S&P 500 over the past six months. The stock has climbed by 12.3% to $328.40 per share while the index has gained 7.7%. 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. With $197.6 billion in revenue over the past 12 months, Elevance Health is one of the most scaled enterprises in healthcare. This is particularly important because health insurance providers companies are volume-driven businesses due to their low margins. Elevance Health’s five-year average ROIC was 27.2%, placing it among the best healthcare companies. This illustrates its management team’s ability to invest in highly profitable ventures and produce tangible results for shareholders. However, Elevance Health’s total customers came in at 45.23 million in the latest quarter, and over the last two years, their count averaged 1.2% year-on-year declines. This performance was underwhelming and shows the company lost deals and renewals.