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Why Is Elevance Health (ELV) Up 0% Since Last Earnings Report?

It has been about a month since the last earnings report for Elevance Health (ELV). Shares have added about 0% in that time frame, underperforming the S&P 500.

Will the recent trend continue leading up to its next earnings release, or is Elevance Health due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.

Elevance Health Beats on Q1 Earnings, Hikes Profit View

Elevance Health reported first-quarter 2023 earnings of $9.46 per share, which beat the Zacks Consensus Estimate of $9.26 and our estimate of $9.22. Additionally, the bottom line advanced 15.5% year over year.

ELV’s operating revenues improved 10.6% year over year to $41,898 million in the quarter under review. The top line beat the consensus mark by 2.5% and came higher than our estimate of $40,766.5 million.

The strong quarterly results were aided by growing premiums stemming from rate increases coupled with membership growth across its Medicaid and Medicare Advantage businesses. Also, rising prescription volumes and expanding post-acute care business in Carelon added to the positives. However, the upside was partly offset by an elevated expense level.

Quarterly Operational Update

Medical membership of Elevance Health as of Mar 31, 2023, totaled 48.1 million, which rose 2.9% year over year in the first quarter but came slightly lower than our estimate of 48.2 million. The improvement came on the back of strong Medicaid, Medicare Advantage, commercial fee-based and ACA health plan businesses. The positives were partially offset by attrition in employer group risk-based business.

The benefit expense ratio of ELV improved 30 basis points (bps) year over year to 85.8% compared with our estimate of 85.7%.

Premiums of $35,868 million rose 9.4% year over year in the quarter under review, higher than our estimate of $35,233.9 million. Product revenues climbed 21.8% year over year to $4,022 million.

Net investment income of $387 million grew 7.5% year over year but lagged our estimate of $393.9 million. The total operating margin improved 40 bps year over year to 6.8% in the first quarter.

Total expenses increased 10.5% year over year to $39,553 million due to increased benefit expenses, cost of products sold, and operating costs. Our estimate indicated total expenses of $38,463.8 million for the first quarter. The operating expense ratio was at 11.5%, flat year over year.

Segmental Results

It now has four reportable segments: Health Benefits (aggregation of the previously known Commercial & Specialty Business and Government Business), CarelonRx (previously IngenioRx), Carelon Services (previously Diversified Business Group), and Corporate & Other.

Health Benefits Business

The segment has reported operating revenues of $37,280 million, which advanced 9.6% year over year in the first quarter. Operating gain increased 16.6% year over year to $2,159 million, owing to premium rate adjustments and Medicaid membership growth. The operating margin of 5.8% improved 40 bps year over year in the quarter under review.


The healthcare services brand Carelon was launched in June 2022 as part of ELV’s rebranding process. Carelon gives aggregated results of CarelonRx and Carelon Services.

Operating revenues of the newly formed unit were $11,336 million, which advanced 17.7% year over year in the first quarter. Operating gain rose 20.6% year over year to $721 million on the back of growing prescription volumes linked with increasing integrated medical and standalone pharmacy members. Also, expanding post-acute care business and strong care delivery businessperformance aided the results. Carelon’s operating margin of 6.4% improved 20 bps year over year.

Corporate & Other

Operating revenues fell 8.1% year over year to $251 million in the quarter under review. The segment has reported an operating loss of $49 million, wider than the prior-year quarter’s loss of $22 million. It was affected by a jump in unallocated corporate costs.

Financial Details (as of Mar 31, 2023)

Elevance Health exited the first quarter with cash and cash equivalents of $10,142 million, which jumped from the 2022-end level of $7,387 million.

Total assets of $109 billion increased from the $102.8 billion figure as of Dec 31, 2022.

Long-term debt, less current portion, was $25,201 million, up from the $22,349 million figure at 2022-end. While short-term borrowings as of the first quarter-end were at $265 million, there was no current portion of the long-term debt.

Total equity of $37,460 million increased from the 2022-end level of $36,330 million.

Net cash provided by operating activities for the first quarter was $6,469 million, up from the year-ago level of $2,541 million.

Capital Deployment

Elevance Health bought back shares worth $622 million in the first quarter. ELV had $6.3 billion remaining under its share buyback authorization as of Mar 31, 2023.

In the quarter under review, ELV paid out a quarterly dividend of $1.48 per share, adding up to a cash distribution worth $351 million.

2023 Outlook

Adjusted earnings are estimated to be more than $32.70 per share, up from previous guidance of $32.60 and the 2022 reported figure of $29.07, backed by lower costs.

Management earlier anticipated operating revenues of $164 billion for 2023, suggesting 5.4% growth from the 2022 reported figure. Premium revenues were expected to be $140 billion.

Medical enrollment was projected to be 47.4-48.5 million this year.

Net investment income was forecast to be $1,600 million. Interest expenses were expected to be $1,000 million in 2023 while operating cash flows were likely to be more than $7.6 billion.

Earlier, operating margins for the Health Benefits and Carelon Services segments were anticipated to witness an increase of 25-50 bps each from the 2022 reported figures. Meanwhile, the metric for the CarelonRx segment was estimated to be unchanged from the 2022 reported level.

How Have Estimates Been Moving Since Then?

It turns out, estimates revision have trended downward during the past month.

VGM Scores

Currently, Elevance Health has a great Growth Score of A, though it is lagging a lot on the Momentum Score front with an F. However, the stock was allocated a grade of A on the value side, putting it in the top quintile for this investment strategy.

Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.


Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Elevance Health has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.

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