CVS Health Care Delivery: Will the Growth Momentum Last in Q2?

CVS Health’s CVS Health Care Delivery business has been driving strong top-line growth in recent quarters. Housed within the Health Services segment, revenues grew 27% in the March 2025 quarter, excluding the impact of the company’s exit from the Accountable Care Organization Realizing Equity, Access and Community Health program and the sale of the Medicare Shared Savings Program business. The decisions stemmed from CVS Health’s routine review of its portfolio of assets to ensure sustainable performance and alignment with long-term strategic goals.

The Health Care Delivery unit gains from robust contributions of Signify Health and Oak Street Health — both of which were acquired in 2023. These assets have significantly advanced CVS’ value-based strategy by adding primary care, home-based care and provider enablement capabilities. In the first quarter, integration costs tied to Signify Health and Oak Street Health totaled $45 million.

Signify completed more than 3 million in-home health evaluations (IHEs) in 2024, a record volume supported by growth in Aetna members. Oak Street, too, saw accelerated patient growth, which was backed by the company’s enterprise connections. The momentum carried into the first quarter, with Signify seeing growth in IHE volumes and Oak Street reporting approximately 37% growth in at-risk members.

That said, the financial performance of the Health Care Delivery business remains closely tied to Medicare Advantage medical cost trends and regulations. CVS observed some early signs of pressure in medical cost trends at Oak Street Health in the first quarter, which it plans to continue monitoring closely over the next several months. For now, the company remains confident about the growth trajectory of this business. 

How HUM and AGL Compete With CVS Health

Humana’s HUM CenterWell segment includes pharmacy, senior primary care and home solutions operations. In the first quarter of 2025, CenterWell services revenues grew 37.5% year over year, mainly driven by higher revenues from growth in the primary care business. The segment also benefited from administrative cost efficiencies resulting from value creation initiatives and improved operating trends in primary care due to stabilizing medical cost trends and the maturing of v28 mitigation activities, partially offset by the ongoing phase-in of v28.

Agilon Health AGL is working to transform senior healthcare across U.S. communities by combining the agilon platform with a long-term partnership model involving existing physician groups and a growing network of like-minded physicians. In the first quarter of 2025, Agilon saw a material increase in patients choosing to receive advanced illness management through its PalliUM program, which is now live across most of the markets. The initiative relies on the trust between a senior patient and their primary care doctor and offers significant quality of life benefits to patients and family members.

CVS’ Price Performance, Valuation and Estimates

In the past six months, CVS Health shares have risen 6.2% against the industry’s 11.6% fall.

CVS shares are trading at a forward 12-month price-to-earnings ratio of 9.06, lower than the 14.37 industry average. The stock carries a Value Score of A.

Consensus estimates for the company's 2025 earnings have been showing an upward trend.  

CVS stock currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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This article originally published on Zacks Investment Research (zacks.com).

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