Cigna Shares on the Couch: Time to Stay Strong or Walk Away Now?

The Cigna Group CI is well poised to grow on the back of new business and client relationship expansion in the Evernorth Health Services unit. Strategic focus shift, strong cash generating ability, shareholder value-boosting efforts and diversified and growing revenue streams are some major tailwinds.

Cigna — with a market cap of $74.6 billion — provides pharmacy services, benefits management, care solutions, health insurance products, as well as data and analytics. Courtesy of solid prospects, this Zacks Rank #3 (Hold) stock is worth holding on to at the moment.

Let’s delve deeper.

The Zacks Consensus Estimate for Cigna’s 2025 earnings is pegged at $29.63 per share, indicating a 8.4% year-over-year rise. It remained stable over the past 30 days. The company beat earnings estimates in three of the last four quarters and missed once.

Cigna Group Price, Consensus and EPS Surprise

Cigna Group price-consensus-eps-surprise-chart | Cigna Group Quote

The consensus estimate for 2025 revenues stands at $272.11 billion, suggesting a 10.1% rise. Expanding pharmacy benefit services, thanks to rising customers and prescription volumes and improving specialty volumes in Specialty and Care Services are expected to boost the top line. Its massive scale provides pricing power and unit economics. New client wins and renewed existing relationships help generate more service contract revenues.

Cigna has a strong shareholder value boosting program in place. In the first nine months of 2025, it repurchased a total of 8.2 million shares for $2.6 billion and paid dividends worth $1.2 billion. Over the past four reported quarters, it generated free cash flow of $7.4 billion.

Cigna trades at a forward P/E of 9.28X, well below its five-year median of 10.62X and the industry average of 15.84X. The discount suggests investors are focused on near-term uncertainties, potentially overlooking the company’s longer-term earnings power and structural growth drivers.

Key Concerns

There are a few factors that investors should keep an eye on.

Cigna’s return on assets of 5.01% is below the industry average of 5.65%, suggesting that the company is generating less profit from its assets relative to its industry peers. Its high debt level, with a net debt to capital of 35.68% (against the industry average of 24.04%), is a concern.

Also, a high MCR is affecting Cigna’s Healthcare profits. Nevertheless, we believe that a systematic and strategic plan of action will drive the company’s long-term growth.

Key Medical Picks

Some better-ranked stocks in the broader Medical space are CareDx, Inc. CDNA, Encompass Health Corporation EHC and The Ensign Group, Inc. ENSG, each carrying a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

The Zacks Consensus Estimate for CareDx’s current-year earnings implies a 25.5% increase from the year-ago reported figure. The consensus mark for its current-year revenues is pegged at $374.08 million. CDNA beat earnings estimates in three of the last four quarters and missed once, with an average surprise of 76.5%.

The Zacks Consensus Estimate for Encompass Health’s 2025 earnings indicates a 19.6% year-over-year increase to $5.30 per share. It has witnessed one upward estimate revision over the past 60 days against no movement in the opposite direction. The consensus mark for EHC’s 2025 revenues indicates 10.4% growth from a year ago.

The Zacks Consensus Estimate for Ensign’s 2025 bottom line suggests 18.2% year-over-year growth. It beat earnings estimates in all the last four quarters, with an average surprise of 2.3%. ENSG has witnessed three upward estimate revisions over the past 60 days against no movement in the opposite direction.

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

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