Elevance Health (ELV) Down 8.4% Since Last Earnings Report: Can It Rebound?

It has been about a month since the last earnings report for Elevance Health (ELV). Shares have lost about 8.4% in that time frame, underperforming the S&P 500.

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

Elevance Q3 Earnings Beat Estimates on Strong MA Membership

Elevance Health reported third-quarter 2025 adjusted earnings per share (EPS) of $6.03, which surpassed the Zacks Consensus Estimate by 21.1%. The bottom line dropped 29.9% year over year.

Operating revenues advanced 12% year over year to $50.1 billion. The top line beat the consensus mark by 1.2%.

The quarterly results benefited on the back of strong growth in premiums, product revenues and net investment income. Segment-wise, the Carelon division posted a robust revenue surge, aided by buyouts and scaling risk-based services, while Health Benefits saw increased premium yields and Medicare Advantage membership growth. However, the upside was partly offset by a decline in overall medical membership due to Medicaid reverifications and an elevated expense level.

ELV’s Q3 Operational Update

Medical membership of Elevance Health was around 45.4 million as of Sept. 30, 2025, which dipped 0.9% year over year. The decrease was due to a decline in Medicaid membership as a result of eligibility reverifications, partially offset by growth in Medicare Advantage. The reported figure missed the Zacks Consensus Estimate and our estimate of 45.6 million. 

Premiums totaled $41.8 billion in the quarter under review, which improved 13.5% year over year, and outpaced the consensus mark of $41 billion and our estimate of $40.2 billion. Product revenues grew 4.6% year over year to $6.2 billion. The metric missed the Zacks Consensus Estimate of $6.3 billion but beat our estimate of $6.1 billion.

Net investment income advanced 13.4% year over year to $625 million, which surpassed the consensus mark of $449 million and our estimate of $476.5 million. Adjusted operating margin of 2.7% deteriorated 280 basis points (bps) year over year. 

Total expenses escalated 12.7% year over year to $49.3 billion in the third quarter, higher than our estimate of $47.7 billion. The year-over-year increase was due to higher benefit expenses, cost of products sold and interest expenses.

Operating expense ratio came in at 10.5%, which improved 130 bps year over year. The benefit expense ratio deteriorated 180 bps year over year to 91.3%.

Q3 Segmental Results of ELV

Health Benefits

The unit recorded operating revenues of $42.2 billion in the third quarter, which rose 10% year over year and beat the Zacks Consensus Estimate of $41.5 billion as well as our estimate of $40.2 billion. The segment benefited from increased premium yields, rising Medicare Advantage membership and buyouts.

Operating gain plunged 62.5% year over year to $0.6 billion, lower than the consensus mark of $0.9 billion. The operating margin of 1.4% deteriorated 280 bps year over year.

Carelon

The segment’s operating revenues soared 33% year over year to $18.3 billion in the quarter under review, higher than the Zacks Consensus Estimate of $18 billion and our estimate of $17.4 billion. The year-over-year improvement was driven by buyouts in home health and pharmacy services, higher CarelonRx product revenues and the scaling of risk-based capabilities in Carelon Services. 

The unit’s operating gain of $0.8 billion remained unchanged year over year. The operating margin deteriorated 160 bps year over year to 4.2%.

Corporate & Other

Operating revenues more than doubled year over year to $149 million in the third quarter.  The unit incurred an operating loss of $81 million, narrower than the prior-year quarter’s loss of $999 million.

ELV’s Financial Details (as of Sept. 30, 2025)

Elevance Health exited the third quarter with cash and cash equivalents of $8.7 billion, which advanced 5.1% from the 2024-end level. Total assets of $122.7 billion increased 5% from the figure at 2024-end. 

Long-term debt, less the current portion, amounted to $31.2 billion, up 6.7% from the figure as of Dec. 31, 2024. Short-term borrowings at the third-quarter end were $180 million, while the current portion of the long-term debt amounted to $749 million.

Total equity of $44.1 billion fell 6.4% from the 2024-end level.

Elevance Health generated net cash flow from operations of $4.2 billion in the first nine months of 2025, which fell 17.6% from the prior-year comparable period.

ELV: Capital Deployment Update

Elevance Health bought back shares worth $875 million in the third quarter. It had a leftover capacity of around $7.2 billion under its share buyback authorization as of Sept. 30, 2025.

Elevance Health paid a quarterly dividend of $1.71 per share, adding up to a cash distribution worth $381 million.

ELV’s 2025 Outlook

The company reiterates its adjusted EPS to be around $30, which indicates a 9.2% decline from the 2024 reported figure. Management maintains its view for benefit expense ratio at around 90%
The operating margin for the Health Benefits segment was earlier estimated to witness a decrease of 50-25 basis points (bps) from the 2024 reported figure.

Also, the operating margin for CarelonRx was expected to see 0-20 bps growth, while the same for Carelon Services was estimated to witness a decrease of 100-50 bps.

Management earlier expected operating revenues to witness high-single to low-double-digit growth in 2025 from the 2024 level. Premium revenues were earlier estimated to witness low-double-digit growth from the 2024 level. Medical enrollment was forecasted to be between 45.8 million and 46.6 million in 2025. 

Net investment income was earlier anticipated to be $1.9 billion. Interest expenses were forecasted to be $1.5 billion in 2025, while operating cash flow was likely to be approximately $6 billion. Diluted shares were earlier estimated at 225-226 million.

How Have Estimates Been Moving Since Then?

In the past month, investors have witnessed a downward trend in estimates review.

The consensus estimate has shifted -21.39% due to these changes.

VGM Scores

At this time, Elevance Health has a average Growth Score of C, though it is lagging a bit on the Momentum Score front with a D. However, the stock has a grade of A on the value side, putting it in the top 20% for value investors.

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

Outlook

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

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