MMarketMath

ELV

StalwartQuality: Medium (55/100)2 red flags

Elevance Health · Health Care · Managed Health Care

$398.87

52w 274.84 – 436.24

20y monthly, adjusted

Mkt cap

$86.5B

P/E

15.3

P/FCF

27.3

FCF yield

3.7%

ROE

12.9%

Shldr yield

4.8%

div 1.8% + bb 3.0%

What today's price assumes

At $86.5B, the market is pricing in 11.9% annual free-cash-flow growth for the next decade (10% discount rate, 2.5% terminal growth). Over the last ten years, FCF actually grew -1.2% per year — the price asks for acceleration beyond the historical record.

Simple DCF per-share range: $154 · $154 · $190 (4% / base / optimistic growth). An estimate, not a target.

Adjust the assumptions yourself →

Historical multiple lens

At its own median P/OCF of 10.8× across 18 years, ELV would trade near $213/share (25th–75th percentile: $142–$279); it trades at 20.2× 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

+8.3%

Rev 5y

+10.3%

Rev 10y

+9.7%

EPS 5y

+7.0%

EPS 10y

+10.4%

FCF 5y

−20.0%

FCF 10y

−1.2%

Fundamentals

Fiscal 2007–2025, from SEC filings

Revenue

2007: $61.2B
2008: $61.3B
2009: $64.9B
2010: $58.7B
2011: $60.7B
2012: $61.5B
2013: $71.0B
2014: $73.9B
2015: $79.2B
2016: $84.9B
2017: $90.0B
2018: $92.1B
2019: $104.2B
2020: $121.9B
2021: $138.6B
2022: $156.6B
2023: $171.3B
2024: $177.0B
2025: $199.1B
$0$50.0B$100.0B$150.0B
07
11
15
19
23

Net income

2007: $3.3B
2008: $2.5B
2009: $4.7B
2010: $2.9B
2011: $2.6B
2012: $2.7B
2013: $2.5B
2014: $2.6B
2015: $2.6B
2016: $2.5B
2017: $3.8B
2018: $3.8B
2019: $4.8B
2020: $4.6B
2021: $6.2B
2022: $5.9B
2023: $6.0B
2024: $6.0B
2025: $5.7B
$0$2.0B$4.0B$6.0B
07
11
15
19
23

Free cash flow

2007: $4.0B
2008: $2.2B
2009: $2.7B
2010: $965.3M
2011: $2.9B
2012: $2.2B
2013: $2.4B
2014: $2.7B
2015: $3.6B
2016: $2.7B
2017: $3.4B
2018: $2.6B
2019: $5.0B
2020: $9.7B
2021: $7.3B
2022: $7.2B
2023: $6.8B
2024: $4.6B
2025: $3.2B
$0$2.5B$5.0B$7.5B
07
11
15
19
23

Diluted shares (lower is better)

2008: 523.0M
2009: 480.5M
2010: 415.8M
2011: 365.1M
2012: 324.8M
2013: 303.8M
2014: 285.9M
2015: 272.9M
2016: 268.1M
2017: 267.8M
2018: 264.2M
2019: 260.3M
2020: 254.3M
2021: 246.8M
2022: 242.8M
2023: 237.4M
2024: 232.9M
2025: 224.6M
0200.0M400.0M
07
11
15
19
23

Margins

2%4%6%8%07101316192225
Net marginFCF marginGross margin

Capital returned (dividends + buybacks)

2007: $6.2B
2008: $3.3B
2009: $2.6B
2010: $4.4B
2011: $3.4B
2012: $2.9B
2013: $2.1B
2014: $3.5B
2015: $2.2B
2016: $684.0M
2017: $2.7B
2018: $2.5B
2019: $2.5B
2020: $3.7B
2021: $3.0B
2022: $3.5B
2023: $4.1B
2024: $4.4B
2025: $4.1B
$0$2.0B$4.0B$6.0B
07
11
15
19
23

Cash vs long-term debt

$0$10.0B$20.0B$30.0B07101316192225
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: $43.7B
Q3'23: $42.8B
Q4'23: $42.6B
Q1'24: $42.6B
Q2'24: $43.9B
Q3'24: $45.1B
Q4'24: $45.4B
Q1'25: $48.9B
Q2'25: $49.8B
Q3'25: $50.7B
Q4'25: $49.7B
Q1'26: $50.2B
Q2'26: $50.5B
$0$20.0B$40.0B
23
24
24
25
26

Net income by quarter

Q2'23: $1.9B
Q3'23: $1.3B
Q4'23: $856.0M
Q1'24: $2.2B
Q2'24: $2.3B
Q3'24: $1.0B
Q4'24: $418.0M
Q1'25: $2.2B
Q2'25: $1.7B
Q3'25: $1.2B
Q4'25: $547.0M
Q1'26: $1.8B
Q2'26: $1.5B
$0$1.0B$2.0B
23
24
24
25
26
QuarterRevenueYoYNet incomeYoYEPSOCF
Q2'26$50.5B+1.4%$1.5B−16.1%6.71$1.9B
Q1'26$50.2B+2.6%$1.8B−19.2%8.00$4.3B
Q4'25 *$49.7B+9.5%$547.0M+30.9%2.56$84.0M
Q3'25$50.7B+12.4%$1.2B+17.0%5.32$1.1B
Q2'25$49.8B+13.4%$1.7B−24.2%7.72$2.1B
Q1'25$48.9B+14.8%$2.2B−2.8%9.61$1.0B
Q4'24 *$45.4B+6.6%$418.0M−51.2%1.88$706.0M
Q3'24$45.1B+5.3%$1.0B−21.2%4.36$2.7B
Q2'24$43.9B+0.5%$2.3B+24.1%9.85$447.0M
Q1'24$42.6B+1.0%$2.2B+12.9%9.59$2.0B
Q4'23 *$42.6B+6.8%$856.0M−1.0%3.68−$3.0B
Q3'23$42.8B+7.3%$1.3B−19.6%5.45$2.6B
Q2'23$43.7B+13.0%$1.9B+13.2%7.79$1.9B

Track record

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

Series3y5y10y15y
Revenue+8.3%+10.3%+9.7%+8.5%
Operating cash flow−20.1%−16.7%+0.2%+7.7%
Free cash flow−24.1%−20.0%−1.2%+8.3%
EPS (diluted)+1.3%+7.0%+10.4%+9.0%
Equity+6.6%+5.7%+6.7%+4.2%
LT debt+11.3%+9.8%+7.2%+9.3%
Diluted shares−2.6%−2.5%−1.9%−4.0%
Stock price−1.8%+2.7%+13.9%+14.8%

$100, 3 years ago

$95vs $177 in SPY

-1.8% vs 20.9%/yr

$100, 5 years ago

$114vs $181 in SPY

2.7% vs 12.7%/yr

$100, 10 years ago

$366vs $414 in SPY

13.9% vs 15.3%/yr

$100, 15 years ago

$791vs $816 in SPY

14.8% vs 15.0%/yr

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

Last 5 years

$0.31

$7.0B created / $22.9B retained

Last 10 years

$1.20

$46.2B created / $38.4B retained

Quality & capital discipline

Cash-based returns and how management deploys capital

Cash ROIC

5.7%

OCF ÷ (equity + debt)

OCF / EV yield

4.0%

MC vs 10× OCF

2.02

≤1 = priced under 10× OCF

Debt / FCF

9.7y

SBC / FCF

8.7%

Owner earnings

$2.9B

OCF − capex − SBC

OE yield

3.4%

Share count 5y

−4.9%

per year; negative = buybacks

Capital intensity

2.3%

net PP&E ÷ revenue

Sales efficiency

$0.02

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

Growth engine (5y): reinvested 52.7% of operating cash flow at an incremental return of -34.8% — an organically fundable growth rate of about -18.3% per year (growth ≈ reinvestment rate × incremental ROIC).

Checklist

14 of 26 checks pass · 54%. Checks with structurally missing inputs are excluded.

Growth & Consistency

5/7

  • Revenue growth

    10.3% · 5y CAGR ≥ 5%

    pass

  • EPS growth

    7.0% · 5y CAGR ≥ 5%

    pass

  • FCF growth

    -20.0% · 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

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

    pass

  • Cash flow keeps up with sales

    -16.7% vs 10.3% · OCF CAGR ≥ 0.9× revenue CAGR

    fail

Profitability

1/6

  • Net margin

    2.8% · ≥ 8%

    fail

  • Operating margin

    3.6% · ≥ 10%

    fail

  • Gross margin stable or rising

    — · no drop > 2 pts over 3y

    na

  • Return on equity

    12.9% · ≥ 12%

    pass

  • Cash ROIC

    5.7% · ≥ 12%

    fail

  • FCF margin

    1.6% · ≥ 5%

    fail

  • Earnings back their cash

    OCF $4.3B vs NI $5.7B · OCF ≥ net income (latest FY)

    fail

Balance Sheet

2/5

  • Debt payable from cash flow

    9.7y · LT debt ≤ 3× FCF

    fail

  • Cash cushion

    31% · cash ≥ 50% of LT debt

    fail

  • Leverage

    0.70 · LT debt ≤ 1.5× equity

    pass

  • Equity positive and compounding

    $43.9B · equity > 0 and grew over ~5y

    pass

  • Interest burden

    19% · interest ≤ 15% of operating income

    fail

Capital Allocation

3/4

  • Share count flat or shrinking

    -4.9% · ≤ +0.5%/yr over ~5y

    pass

  • Stock comp restrained

    9% · SBC ≤ 15% of FCF

    pass

  • Distributions funded by FCF

    130% · dividends + buybacks ≤ 100% of FCF

    fail

  • Repurchases are a habit

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

    pass

Valuation Discipline

3/4

  • FCF yield

    3.7% · ≥ 3%

    pass

  • Earnings multiple

    15.3 · P/E ≤ 25

    pass

  • Price asks less than history delivered

    11.9% vs -1.2% · implied FCF growth ≤ historical FCF CAGR

    fail

  • Shareholder yield

    4.8% · 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.

Distributions exceed FCF

Dividends plus buybacks exceeded free cash flow in the latest fiscal year.

Financial data

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

FYRevenueGross profitOp incomeNet incomeEPSOCFCapExFCFDividendsBuybacksSBCCashLT debtEquityShares
2025199,125—7,1995,66225.214,2901,1163,1741,5292,6052769,49130,79743,882225
2024177,011—7,8625,98025.685,8081,2564,5521,5082,9001918,28829,21841,315233
2023171,340—8,4995,98725.228,0611,2966,7651,3952,6762896,52623,24639,306237
2022156,595—8,2835,89424.288,3991,1527,2471,2292,3162647,38722,34936,243243
2021138,639—7,5596,15824.958,3641,0877,2771,1041,9002554,88021,15736,060247
2020121,867—6,3604,57217.9810,6881,0219,6679542,7002835,74119,33533,199254
2019104,213—5,9994,80718.476,0611,0774,9848181,7012944,93717,78731,728260
201892,105—5,4263,75014.193,8271,2082,6197761,6852263,93417,21728,541264
201790,040—4,1753,84314.354,1857913,3947051,9981703,60917,38226,503268
201684,863—4,8012,4709.213,2705842,68668401654,07514,35925,101268
201579,157—4,7532,5609.384,2126383,5746571,5161482,11315,32523,045273
201473,874—4,4182,5708.993,3697152,6554812,9991692,15214,02024,251286
201371,024—4,0012,4908.203,0526472,4064481,6201461,58213,57424,765304
201261,497—3,6202,6568.182,7455452,2003672,4971472,47514,17123,803325
201160,711—3,7822,6477.253,3745202,8553583,0401352,2028,46623,288365
201058,699—4,0782,8876.941,41745196504,3601361,7898,14823,813416
200964,940—4,1794,7469.883,0393782,661—2,6381544,8168,33824,863481
200861,251—4,3482,4914.762,5353462,190—3,2761562,1847,83421,432523
200761,168——3,3455.564,3453224,023—6,1511772,768—22,990—

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 ↗