Elevance Health Inc (NYSE:ELV) reported its fourth quarter and full-year 2025 financial results, delivering a performance that has elicited a cautious response from investors in early trading. The healthcare giant posted revenue and adjusted earnings per share that came in below Wall Street's expectations for the quarter, overshadowing the company's reaffirmed long-term growth target.
Earnings and Revenue Versus Estimates
The company's quarterly results presented a mixed financial picture when held against analyst forecasts. For the critical fourth quarter, Elevance reported operating revenue of $49.3 billion. This figure fell short of the consensus estimate of approximately $50.3 billion. Similarly, the company's adjusted earnings per share (EPS) of $3.33, while representing a solid profit, missed the analyst projection of $3.13.
The key quarterly comparisons are as follows:
- Reported Q4 Revenue: $49.3 billion
- Estimated Q4 Revenue: ~$50.3 billion
- Reported Q4 Adj. EPS: $3.33
- Estimated Q4 Adj. EPS: $3.13
For the full year 2025, the company generated operating revenue of $197.6 billion, a 13% increase over the prior year.
Market Reaction and Price Action
The market's immediate reaction to the earnings release has been negative. In pre-market trading following the announcement, ELV shares are down approximately 4.0%. This downward move suggests investor focus has settled on the revenue miss and underlying margin pressures, rather than the EPS beat. The stock had been relatively stable in the weeks leading up to the report, with minor declines over the past month.
Key Takeaways from the Quarterly Report
The earnings release highlighted several important dynamics within Elevance Health's business segments:
- Revenue Growth with Margin Pressure: The company achieved significant top-line growth, driven by higher premium yields, acquisitions, and growth in Medicare Advantage membership. However, this was partially offset by attrition in the Medicaid business. Profitability was challenged by elevated medical costs, particularly in Affordable Care Act plans and Medicare Part D, leading to a year-over-year contraction in both operating and adjusted operating margins.
- Segment Performance Divergence: A clear split emerged between the company's core insurance arm and its services platform.
- The Health Benefits segment saw an 11% increase in revenue but swung to an adjusted operating loss of $0.2 billion in the quarter, citing higher medical cost trends.
- Conversely, the Carelon services segment was a strong performer, with revenue surging 27% and adjusted operating gain holding steady at $0.6 billion for the quarter. Full-year adjusted operating gain for Carelon grew 10%.
- Capital Returns and Outlook: Management demonstrated confidence in its financial position by continuing to return capital to shareholders. The company repurchased $471 million worth of shares in Q4 and announced a 1% increase in its quarterly dividend to $1.72 per share. Crucially, CEO Gail Boudreaux stated the company "remain[s] confident in our ability to return to at least 12% adjusted EPS growth in 2027."
Forward-Looking Comparison
While the press release did not provide specific numerical guidance for 2026, the company's long-term EPS growth target offers a benchmark. Analyst estimates currently project full-year 2026 revenue of approximately $206.9 billion and Q1 2026 revenue of about $51.4 billion. Investors will be listening closely to the earnings call for management's 2026 outlook to gauge how the company plans to navigate cost pressures and return to its stated double-digit EPS growth trajectory.
For a detailed breakdown of historical earnings and future analyst estimates for Elevance Health, you can review the data here.
Disclaimer: This article is for informational purposes only and does not constitute financial advice, a recommendation, or an offer to buy or sell any security. Investing involves risk, including the potential loss of principal.
