MMarketMath

CVS

StalwartQuality: Low (36/100)1 red flag

CVS Health · Health Care · Health Care Services

$94.11

52w 69.51 – 110.68

20y monthly, adjusted

Mkt cap

$120.4B

P/E

67.7

P/FCF

15.3

FCF yield

6.5%

ROE

2.4%

Shldr yield

2.8%

div 2.8% + bb 0.0%

What today's price assumes

At $120.4B, the market is pricing in 4.1% annual free-cash-flow growth for the next decade (10% discount rate, 2.5% terminal growth). Over the last ten years, FCF actually grew 2.4% per year — the price asks for acceleration beyond the historical record.

Simple DCF per-share range: $83 · $83 · $103 (4% / base / optimistic growth). An estimate, not a target.

Adjust the assumptions yourself →

Historical multiple lens

At its own median P/OCF of 6.7× across 19 years, CVS would trade near $55/share (25th–75th percentile: $53–$69); it trades at 11.3× today.

Assumes the historical multiple regime persists — re-ratings can be permanent.

Growth record

Compound annual growth rates from as-filed 10-K data, split-adjusted

Rev 3y

+7.6%

Rev 5y

+8.4%

Rev 10y

+10.1%

EPS 5y

−23.9%

EPS 10y

−11.3%

FCF 5y

−10.3%

FCF 10y

+2.4%

Fundamentals

Fiscal 2007–2025, from SEC filings

Revenue

2007: $76.3B
2008: $87.5B
2009: $98.2B
2010: $95.8B
2011: $107.1B
2012: $123.1B
2013: $126.8B
2014: $139.4B
2015: $153.3B
2016: $177.5B
2017: $184.8B
2018: $193.9B
2019: $256.8B
2020: $268.7B
2021: $292.1B
2022: $322.5B
2023: $357.8B
2024: $372.8B
2025: $402.1B
$0$200.0B$400.0B
07
11
15
19
23

Net income

2007: $2.6B
2008: $3.2B
2009: $3.7B
2010: $3.4B
2011: $3.5B
2012: $3.9B
2013: $4.6B
2014: $4.6B
2015: $5.2B
2016: $5.3B
2017: $6.6B
2018: −$594.0M
2019: $6.6B
2020: $7.2B
2021: $8.0B
2022: $4.3B
2023: $8.3B
2024: $4.6B
2025: $1.8B
$0$2.5B$5.0B$7.5B
07
11
15
19
23

Free cash flow

2007: $1.4B
2008: $1.8B
2009: $1.5B
2010: $2.8B
2011: $4.0B
2012: $4.6B
2013: $3.8B
2014: $6.0B
2015: $6.2B
2016: $7.9B
2017: $6.1B
2018: $6.8B
2019: $10.4B
2020: $13.4B
2021: $15.7B
2022: $13.4B
2023: $10.4B
2024: $6.3B
2025: $7.8B
$0$5.0B$10.0B$15.0B
07
11
15
19
23

Diluted shares (lower is better)

2007: 1.4B
2008: 1.5B
2009: 1.4B
2010: 1.4B
2011: 1.3B
2012: 1.3B
2013: 1.2B
2014: 1.2B
2015: 1.1B
2016: 1.1B
2017: 1.0B
2018: 1.0B
2019: 1.3B
2020: 1.3B
2021: 1.3B
2022: 1.3B
2023: 1.3B
2024: 1.3B
2025: 1.3B
0500.0M1.0B
07
11
15
19
23

Margins

0%10%20%07101316192225
Net marginFCF marginGross margin

Capital returned (dividends + buybacks)

2007: $5.7B
2008: $406.0M
2009: $2.9B
2010: $2.0B
2011: $3.7B
2012: $5.2B
2013: $5.1B
2014: $5.3B
2015: $6.6B
2016: $6.3B
2017: $6.4B
2018: $2.0B
2019: $2.6B
2020: $2.6B
2021: $2.6B
2022: $6.4B
2023: $5.1B
2024: $6.4B
2025: $3.4B
$0$2.0B$4.0B$6.0B
07
11
15
19
23

Cash vs long-term debt

$0$25.0B$50.0B$75.0B07101316192225
CashLT debt

Quarterly

Discrete quarters from 10-Q filings; Q4 derived as fiscal year minus Q1–Q3. OCF is unwound from the year-to-date figures 10-Qs report. Compare to the same quarter a year ago — most businesses are seasonal.

Revenue by quarter

Q2'23: $88.9B
Q3'23: $89.8B
Q4'23: $93.8B
Q1'24: $88.4B
Q2'24: $91.2B
Q3'24: $95.4B
Q4'24: $97.7B
Q1'25: $94.6B
Q2'25: $98.9B
Q3'25: $102.9B
Q4'25: $105.7B
Q1'26: $100.4B
Q2'26: $106.1B
$0$50.0B$100.0B
23
24
24
25
26

Net income by quarter

Q2'23: $1.9B
Q3'23: $2.3B
Q4'23: $2.0B
Q1'24: $1.1B
Q2'24: $1.8B
Q3'24: $87.0M
Q4'24: $1.6B
Q1'25: $1.8B
Q2'25: $1.0B
Q3'25: −$4.0B
Q4'25: $2.9B
Q1'26: $2.9B
Q2'26: $3.0B
−$2.0B$0$2.0B
23
24
24
25
26
QuarterRevenueYoYNet incomeYoYEPSOCF
Q2'26$106.1B+7.3%$3.0B+191.8%2.31$6.3B
Q1'26$100.4B+6.2%$2.9B+65.4%2.30$4.2B
Q4'25 *$105.7B+8.2%$2.9B+79.0%2.31$3.4B
Q3'25$102.9B+7.8%−$4.0B−4669.0%-3.13$796.0M
Q2'25$98.9B+8.4%$1.0B−42.3%0.80$1.9B
Q1'25$94.6B+7.0%$1.8B+59.8%1.41$4.6B
Q4'24 *$97.7B+4.2%$1.6B−19.6%1.30$1.9B
Q3'24$95.4B+6.3%$87.0M−96.2%0.07−$745.0M
Q2'24$91.2B+2.6%$1.8B−6.9%1.41$3.1B
Q1'24$88.4B+3.7%$1.1B−47.9%0.88$4.9B
Q4'23 *$93.8B+11.9%$2.0B−12.3%1.59−$2.6B
Q3'23$89.8B+10.6%$2.3B—1.75$2.7B
Q2'23$88.9B+10.3%$1.9B−37.2%1.48$5.9B

Track record

Compound annual growth by period. For debt and share count, negative is the good direction.

Series3y5y10y15y
Revenue+7.6%+8.4%+10.1%+10.0%
Operating cash flow−13.0%−7.7%+2.2%+5.5%
Free cash flow−16.6%−10.3%+2.4%+7.1%
EPS (diluted)−24.7%−23.9%−11.3%−3.8%
Equity+1.7%+1.6%+7.3%+4.7%
LT debt+6.2%+0.4%+8.7%+13.8%
Diluted shares−1.3%−0.7%+1.2%−0.5%
Stock price+17.4%+5.2%+3.2%+9.4%

$100, 3 years ago

$162vs $176 in SPY

17.4% vs 20.7%/yr

$100, 5 years ago

$129vs $181 in SPY

5.2% vs 12.6%/yr

$100, 10 years ago

$137vs $412 in SPY

3.2% vs 15.2%/yr

$100, 15 years ago

$385vs $813 in SPY

9.4% vs 15.0%/yr

The $1 test — market value created per $1 of earnings retained (Buffett's hurdle: at least $1)

Last 5 years

$1.25

$14.6B created / $11.6B retained

Last 10 years

$0.55

$14.1B created / $25.6B retained

Quality & capital discipline

Cash-based returns and how management deploys capital

Cash ROIC

7.8%

OCF ÷ (equity + debt)

OCF / EV yield

6.2%

MC vs 10× OCF

1.13

≤1 = priced under 10× OCF

Debt / FCF

7.7y

SBC / FCF

6.9%

Owner earnings

$7.3B

OCF − capex − SBC

OE yield

6.1%

Share count 5y

−0.4%

per year; negative = buybacks

Capital intensity

—

net PP&E ÷ revenue

Sales efficiency

$0.02

new PP&E per $1 new revenue, 5y

Growth engine (5y): reinvested 9.6% of operating cash flow at an incremental return of -80.1% — an organically fundable growth rate of about -7.7% per year (growth ≈ reinvestment rate × incremental ROIC).

Checklist

13 of 26 checks pass · 50%. Checks with structurally missing inputs are excluded.

Growth & Consistency

4/7

  • Revenue growth

    8.4% · 5y CAGR ≥ 5%

    pass

  • EPS growth

    -23.9% · 5y CAGR ≥ 5%

    fail

  • FCF growth

    -10.3% · 5y CAGR ≥ 5%

    fail

  • Revenue rises consistently

    9 of 9 · up in ≥ 7 of last 10 years

    pass

  • FCF consistently positive

    10 of 10 · positive in ≥ 8 of last 10 years

    pass

  • Profitable every year

    9 of 10 · net income > 0 in ≥ 8 of last 10

    pass

  • Cash flow keeps up with sales

    -7.7% vs 8.4% · OCF CAGR ≥ 0.9× revenue CAGR

    fail

Profitability

1/6

  • Net margin

    0.4% · ≥ 8%

    fail

  • Operating margin

    1.2% · ≥ 10%

    fail

  • Gross margin stable or rising

    — · no drop > 2 pts over 3y

    na

  • Return on equity

    2.4% · ≥ 12%

    fail

  • Cash ROIC

    7.8% · ≥ 12%

    fail

  • FCF margin

    1.9% · ≥ 5%

    fail

  • Earnings back their cash

    OCF $10.6B vs NI $1.8B · OCF ≥ net income (latest FY)

    pass

Balance Sheet

2/5

  • Debt payable from cash flow

    7.7y · LT debt ≤ 3× FCF

    fail

  • Cash cushion

    14% · cash ≥ 50% of LT debt

    fail

  • Leverage

    0.80 · LT debt ≤ 1.5× equity

    pass

  • Equity positive and compounding

    $75.2B · equity > 0 and grew over ~5y

    pass

  • Interest burden

    67% · interest ≤ 15% of operating income

    fail

Capital Allocation

4/4

  • Share count flat or shrinking

    -0.4% · ≤ +0.5%/yr over ~5y

    pass

  • Stock comp restrained

    7% · SBC ≤ 15% of FCF

    pass

  • Distributions funded by FCF

    44% · dividends + buybacks ≤ 100% of FCF

    pass

  • Repurchases are a habit

    5 of 10 · buybacks in ≥ 5 of last 10 years

    pass

Valuation Discipline

2/4

  • FCF yield

    6.5% · ≥ 3%

    pass

  • Earnings multiple

    67.7 · P/E ≤ 25

    fail

  • Price asks less than history delivered

    4.1% vs 2.4% · implied FCF growth ≤ historical FCF CAGR

    fail

  • Shareholder yield

    2.8% · dividends + buybacks ≥ 2% of market cap

    pass

Red flags

Mechanical checks — a flag is a question to investigate, not a verdict

Heavy debt load

Long-term debt exceeds 5 years of free cash flow.

Financial data

As filed in 10-Ks; per-share figures split-adjusted. $ in millions.

FYRevenueGross profitOp incomeNet incomeEPSOCFCapExFCFDividendsBuybacksSBCCashLT debtEquityShares
2025402,067—4,6601,7681.3910,6392,8327,8073,39705358,45360,50275,2141,271
2024372,809—8,5164,6143.669,1072,7816,3263,3733,0235408,58660,52775,5601,262
2023357,776—13,7438,3446.4713,4263,03110,3953,1322,0125888,19658,63876,4611,290
2022322,467—7,9544,3113.2616,1772,72713,4502,9073,50044712,94550,47671,4691,323
2021292,111—13,3108,0016.0218,2652,52015,7452,62504849,40851,97175,0751,329
2020268,706—13,9117,1795.4615,8652,43713,4282,62404007,85459,20769,3891,314
2019256,776—11,9876,6345.0812,8482,45710,3912,60304535,68364,69963,8641,305
2018193,919—4,021-594-0.578,8652,0376,8282,03802804,05971,44458,2251,044
2017184,76528,5459,5386,6226.448,0071,9186,0892,0494,3612341,69622,18137,6911,024
2016177,52628,85710,3865,3174.9010,1412,2247,9171,8404,4612223,37125,61536,8301,079
2015153,29026,5289,4755,2374.638,5392,3676,1721,5765,0012302,45926,26737,1961,126
2014139,36725,3678,7994,6443.968,1372,1366,0011,2884,0011652,48111,63037,9581,169
2013126,76123,7838,0374,5923.745,7831,9843,7991,0973,9761414,08912,84137,9381,226
2012123,12022,4887,2103,8623.026,6712,0304,6418294,3301321,3759,13337,6531,280
2011107,08020,5626,3313,4582.575,8561,8723,9846743,0011351,4139,20838,0131,347
201095,77820,2196,1373,4272.494,7792,0052,7744791,5001501,4278,65237,7001,377
200998,21520,3586,4253,6962.554,0352,5481,4874392,4771651,0868,75635,7681,450
200887,47218,2906,0463,1982.183,9472,1801,76738323921,3528,05734,5741,469
200776,33016,1084,7942,6371.923,2301,8051,4253235,370781,056—31,3221,372

Some concepts are structurally absent for certain industries (banks report no gross profit or capex). Missing ≠ zero.

Compare with peers →·10-K filings on EDGAR ↗