Can Elevance Offset Rising Expenses in Q4 With Higher Premiums?

Elevance Health, Inc. ELV is set to report its fourth-quarter 2025 results on Jan. 28, 2026, before the opening bell. The Zacks Consensus Estimate for the to-be-reported quarter’s earnings is currently pegged at $3.10 per shareon revenues of $49.59 billion.

The fourth-quarter earnings estimate witnessed one downward revision and no upward revisions over the past month. The bottom-line projection indicates a year-over-year decline of 19.3%. However, the Zacks Consensus Estimate for quarterly revenues implies a year-over-year increase of 10.2%.

For 2025, the Zacks Consensus Estimate for Elevance’s revenues is pegged at $197.98 billion, implying a rise of 13% year over year. The consensus mark for 2025 EPS is pegged at $29.99, indicating a 9.2% year-over-year decrease.

Elevance’s earnings beat the consensus estimate in three of the trailing four quarters and missed once, with the average surprise being 6.4%. This is depicted in the figure below.

Elevance Health, Inc. Price and EPS Surprise

Elevance Health, Inc. price-eps-surprise | Elevance Health, Inc. Quote

Q4 Earnings Whispers for Elevance

Our proven model does not conclusively predict an earnings beat for the company this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. That is not the case here.

ELV currently has an Earnings ESP of -1.41% and a Zacks Rank #4 (Sell). You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

What’s Shaping Elevance’s Q4 Results?

The Zacks Consensus Estimate for product revenues indicates 1.5% growth from the year-ago period’s $6.7 billion. The consensus estimate for premiums indicates a 12.3% increase from the year-ago period. These are likely to have aided revenues in the fourth quarter.

The consensus mark for Commercial Individual membership implies 3.5% growth from a year ago, while our model estimate indicates a 3.3% increase. However, the consensus estimate for Commercial Fee-based memberships indicates a 0.4% year-over-year decline. Also, declining memberships in Medicaid are likely to have kept fourth-quarter performance in check.

Meanwhile, the Zacks Consensus Estimate for Carelon brand’s operating income for the fourth quarter indicates an 8.9% year-over-year increase. Growth in CarelonRx is primarily expected to have aided the brand. The Zacks Consensus Estimate for the Health Benefits segment’s operating income for the fourth quarter indicates a 12.1% year-over-year increase.

However, its expenses are likely to have remained elevated in the to-be-reported quarter due to substantial investments in digital capabilities and platforms. High benefit expenses, cost of products sold and interest expenses are likely to have affected profit margins, making an earnings beat uncertain. The Zacks Consensus Estimate for the benefit expense ratio is pegged at 93.4, higher than the year-ago level of 92.4. We expect total expenses to jump 8.4% year over year in the fourth quarter.

Stocks That Warrant a Look

While an earnings beat looks uncertain for Elevance, here are some companies from the broader Medical space that you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat this time around:

Universal Health Services, Inc. UHS has an Earnings ESP of +8.33% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for Universal Health’s bottom line for the to-be-reported quarter of $5.91 indicates 20.1% year-over-year growth. It has witnessed one upward revision against no downward movement over the past week. The consensus mark for Universal Health’s revenues is pegged at $4.48 billion, a 9% increase from a year ago.

Merit Medical Systems, Inc. MMSI has an Earnings ESP of +2.09% and a Zacks Rank of 2.

The Zacks Consensus Estimate for Merit Medical’s bottom line for the to-be-reported quarter is pegged at 96 cents, which indicates 3.2% year-over-year growth. The company’s earnings beat estimates in each of the trailing four quarters, with an average surprise of 14.1%. The consensus estimate for MMSI’s revenues signals 10% growth.

Moderna, Inc. MRNA has an Earnings ESP of +4.86% and a Zacks Rank of 3.

The Zacks Consensus Estimate for Moderna’s bottom line for the to-be-reported quarter improved by 11 cents over the past week. Its earnings beat estimates in each of the past four quarters, with an average surprise of 31.5%. Moderna’s revenues for the to be reported quarter are pegged at $664.51 million.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

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

Zacks Investment Research