It has been about a month since the last earnings report for CVS Health (CVS). Shares have added about 4.1% in that time frame, outperforming the S&P 500.
But investors have to be wondering, will the recent positive trend continue leading up to its next earnings release, or is CVS 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.
CVS Health Tops Q3 Earnings and Revenue Estimates
CVS Health posted third-quarter 2025 adjusted earnings per share of $1.60, up 46.8% year over year. The metric topped the Zacks Consensus Estimate by 17.65%. The adjusted figure considers certain asset amortization costs, loss on assets held for sale and other adjustments.
On a reported basis, the company’s GAAP loss was $3.13 compared to earnings of 7 cents per share in the prior-year period.
CVS Q3 Revenues
Revenues rose 7.8% year over year to $102.87 billion. The top line surpassed the Zacks Consensus Estimate by 4.66%. This year-over-year upside was driven by revenue growth across all segments.
Detailed Analysis of CVS’ Q3 Revenues
Health Services revenues increased 11.6% year over year to $49.27 billion, mainly driven by pharmacy drug mix and brand inflation, partially offset by continued pharmacy client price improvements.
Total pharmacy claims processed fell 1.8% on a 30-day equivalent basis compared with the prior-year level.
Revenues in the Pharmacy & Consumer Wellness segment rose 11.7% year over year to $36.21 billion. The upside was primarily driven by the pharmacy drug mix and increased prescription volume.
Within the Health Care Benefits segment, the company registered revenues worth $36 billion, up 9.1% year over year. This upside was driven by increases in the Government business, largely due to the impact of the Inflation Reduction Act on the Medicare Part D program.
CVS’ Margin Performance
The total cost of sold products rose 7.7% to $57.05 billion in the third quarter. The gross profit jumped 7.9% to $45.83 billion. The gross margin expanded 3 basis points (bps) to 44.6%.
The adjusted operating margin in the quarter under review expanded 12 bps to 33.6% despite a 6.9% rise in total operating expenses ($11.29 billion).
Liquidity Position of CVS
CVS Health exited the third quarter of 2025 with cash and cash equivalents of $9.10 billion compared with $11.79 billion at the end of the second quarter. The long-term debt was $60.51 billion compared with $57.29 billion in the previous quarter.
The cumulative net cash provided by operating activities at the end of the third quarter of 2025 was $7.25 billion, almost the same as the year-ago period’s figure.
CVS’ 2025 Guidance
CVS Health raised its 2025 adjusted earnings per share guidance range to $6.55-$6.65 (earlier $6.30 to $6.40). The Zacks Consensus Estimate for the metric is currently pegged at $6.36.
How Have Estimates Been Moving Since Then?
Since the earnings release, investors have witnessed a flat trend in estimates review.
VGM Scores
Currently, CVS Health has a subpar Growth Score of D, however its Momentum Score is doing a lot better with a B. Charting a somewhat similar path, the stock has a score 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 B. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
CVS Health has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
Performance of an Industry Player
CVS Health is part of the Zacks Medical Services industry. Over the past month, Labcorp Holdings (LH), a stock from the same industry, has gained 6.3%. The company reported its results for the quarter ended September 2025 more than a month ago.
Labcorp reported revenues of $3.56 billion in the last reported quarter, representing a year-over-year change of +8.6%. EPS of $4.18 for the same period compares with $3.50 a year ago.
Labcorp is expected to post earnings of $3.95 per share for the current quarter, representing a year-over-year change of +14.5%. Over the last 30 days, the Zacks Consensus Estimate has changed -0.8%.
Labcorp has a Zacks Rank #3 (Hold) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of C.
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CVS Health Corporation (CVS): Free Stock Analysis Report Labcorp Holdings Inc. (LH): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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