CVS Health’s fourth quarter results reflected steady execution across its pharmacy, health services, and insurance businesses, with management crediting improvements in operational efficiency and customer experience as key drivers. CEO David Joyner highlighted the completed transition to a cost-based reimbursement model and successful integration of Rite Aid assets as important milestones, noting, “We have successfully completed the transition to a cost-based reimbursement. This was a significant step in creating a more transparent and stable pharmacy market.” The quarter also saw robust same-store sales growth, attributed to prescription volume and enhanced consumer engagement.
Is now the time to buy CVS? Find out in our full research report (it’s free for active Edge members).
CVS Health (CVS) Q4 CY2025 Highlights:
- Revenue: $105.7 billion vs analyst estimates of $103.7 billion (8.2% year-on-year growth, 2% beat)
- Adjusted EPS: $1.09 vs analyst estimates of $1.00 (9.4% beat)
- Adjusted EBITDA: $3.26 billion vs analyst estimates of $3.09 billion (3.1% margin, 5.7% beat)
- Adjusted EPS guidance for the upcoming financial year 2026 is $7.10 at the midpoint, missing analyst estimates by 1%
- Operating Margin: 2%, in line with the same quarter last year
- Locations: 8,979 at quarter end, down from 9,135 in the same quarter last year
- Same-Store Sales rose 16% year on year (10.2% in the same quarter last year)
- Market Capitalization: $99.84 billion
While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions From CVS Health’s Q4 Earnings Call
- Justin Lake (Wolfe Research) asked how preliminary Medicare Advantage rate proposals could impact long-term target margins. CEO David Joyner and Aetna President Steven Nelson reiterated their commitment to margin recovery, stating, “the commitment remains unchanged,” despite rate uncertainties.
- Lisa Gill (JPMorgan) questioned whether FTC and PBM legislative proposals might limit CVS’s ability to negotiate in the pharmaceutical supply chain. Joyner responded that while specifics on the FTC are pending, new legislation aligns with CVS’s TrueCost model and is manageable.
- Michael Cherny (Leerink) inquired about the competitive outlook for CVS’s pharmacy and consumer wellness segment post-Rite Aid integration. Division leader Len Shankman emphasized increased prescription growth, operational investments, and a successful transition to cost-based pricing as advantages.
- Andrew Mok (Barclays) sought clarity on drivers behind upward revisions in commercial membership. Nelson pointed to better-than-expected retention and enhanced technology solutions as primary factors supporting growth.
- Erin Wilson Wright (Morgan Stanley) asked about the impact and timing of technology investments on financial performance in 2026. CFO Brian Newman and Chief Pharmacy Officer Prem Shah highlighted ongoing AI and platform investments, anticipating both cost savings and future product launches.
Catalysts in Upcoming Quarters
Looking forward, the StockStory team will be watching (1) progress on regulatory and policy developments affecting Medicare Advantage and PBM transparency, (2) CVS’s ability to maintain and grow commercial membership through product innovation, and (3) the pace of adoption and monetization of the open engagement platform and AI-driven initiatives. Execution in pharmacy integration and cost-based reimbursement models will also serve as critical indicators of CVS Health’s ability to deliver on its multi-year objectives.
CVS Health currently trades at $78.50, up from $75.77 just before the earnings. At this price, is it a buy or sell? The answer lies in our full research report (it’s free).
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