CVS Q1 Earnings & Revenues Beat, '25 EPS View Raised, Stock Up

CVS Health Corporation CVS posted adjusted earnings per share (EPS) of $2.25 in the first quarter of 2025, up 71.8% year over year. The metric also topped the Zacks Consensus Estimate by 34.7%. The adjusted EPS figure considers certain asset amortization costs, loss on assets held for sale and other adjustments. (Find the latest EPS estimates and surprises on Zacks Earnings Calendar.)

On a reported basis, the company’s GAAP earnings were $1.41 per share compared with 88 cents in the prior-year period.

CVS’ Q1 Revenues

Revenues in the first quarter rose 7% year over year to $94.59 billion. The top line surpassed the Zacks Consensus Estimate by 1.8%. This year-over-year upside was driven by revenue growth across all segments.

Following the announcement, CVS shares rose nearly 6.8% in the pre-market trading session today.

Detailed Analysis of CVS’ Q1 Earnings Release

Health Services revenues increased 7.9% year over year to $43.46 billion in the reported quarter. This was mainly driven by pharmacy drug mix, growth in specialty pharmacy and brand inflation, offset by continued pharmacy client price improvements.

Total pharmacy claims processed remained relatively consistent on a 30-day equivalent basis compared with the prior year, primarily driven by increased utilization and largely offset by the impact of an additional day in 2024 due to the leap year.

CVS Health Corporation Price, Consensus and EPS Surprise

CVS Health Corporation price-consensus-eps-surprise-chart | CVS Health Corporation Quote

Revenues in the Pharmacy & Consumer Wellness segment were up 11.1% year over year to $31.91 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 $34.81 billion in the first quarter, up 8% year over year. This upside was driven by growth in the Medicare product line, including the impact of improved Medicare Advantage star ratings for the 2025 payment year.

CVS’ Margin Performance

The total cost of sold products rose 6.2% to $51.06 billion in the first quarter. The gross profit rose 7.9% to $43.53 billion. The gross margin expanded 38 basis points (bps) to 46%.

The adjusted operating margin in the quarter under review expanded 36 bps to 34.4% despite a 7.1% rise in operating expenses ($11.02 billion).

CVS’ Liquidity Position

CVS Health exited the first quarter of 2025 with cash and cash equivalents of $10.08 billion compared with $8.59 billion at the end of fourth-quarter 2024. The long-term debt was $59.04 billion compared with $60.53 billion at the end of the fourth quarter of 2024.

The cumulative net cash provided by operating activities at the end of the first quarter of 2025 was $4.56 billion compared with $4.90 billion in the year-ago period.

CVS’ 2025 Guidance

CVS Health provided updated guidance, projecting adjusted EPS in the range of $6.00 to $6.20 (previously $5.75 to $6.00). The Zacks Consensus Estimate for the metric is pegged at $5.90.

Our Take on CVS Stock

CVS Health exited the first quarter of 2025 on a solid note, with earnings and revenues beating respective estimates. The bottom line benefited from an increase in the Health Care Benefits segment’s operating results, reflecting the favorable year-over-year impact of prior-year development and improved underlying performance in Medicare. The expansion of both margins in the quarter is highly encouraging. Though the company raised its EPS outlook for the full year to reflect strong performance across each of its businesses, it maintains a cautious view on elevated cost trends and possible macro headwinds ahead.  

CVS’ Zacks Rank and Key Picks

CVS Health currently carries a Zacks Rank #3 (Hold).

Some better-ranked stocks from the broader medical space are AngioDynamics ANGO, Integer Holdings Corporation ITGR and Boston Scientific BSX.

AngioDynamics, currently sporting a Zacks Rank #1 (Strong Buy), reported a third-quarter fiscal 2025 adjusted EPS of 3 cents against the Zacks Consensus Estimate of a 13-cent loss. Revenues of $72 million beat the Zacks Consensus Estimate by 2%. You can see the complete list of today’s Zacks #1 Rank stocks here.

ANGO has an estimated fiscal 2026 earnings growth rate of 27.8% compared with the S&P 500 composite’s 10.5% growth. The company surpassed earnings estimates in each of the trailing four quarters, with the average surprise being 70.9%.

Integer Holdings, sporting a Zacks Rank #1 at present, posted a first-quarter 2025 adjusted EPS of $1.31, exceeding the Zacks Consensus Estimate by 3.1%. Revenues of $437.4 million surpassed the Zacks Consensus Estimate by 1.3%.

ITGR has an estimated long-term earnings growth rate of 20.8% compared with the industry’s 14.3% growth. The company’s earnings surpassed estimates in three of the trailing four quarters and missed on one occasion, with the average surprise being 2.8%.

Boston Scientific, currently carrying a Zacks Rank #2 (Buy), reported a first-quarter 2025 adjusted EPS of 75 cents, which surpassed the Zacks Consensus Estimate by 11.9%. Revenues of $4.66 billion topped the Zacks Consensus Estimate by 2.3%.

BSX has an estimated 2025 earnings growth rate of 15.9% compared with the S&P 500 composite’s 11.9% growth. The company’s earnings surpassed estimates in each of the trailing four quarters, with the average surprise being 8.8%.

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

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