Breaking Down Elevance Health Inc. (ELV) Financial Health: Key Insights for Investors

Breaking Down Elevance Health Inc. (ELV) Financial Health: Key Insights for Investors

US | Healthcare | Medical - Healthcare Plans | NYSE

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Understanding Elevance Health Inc. (ELV) Revenue Streams

Revenue Analysis

Elevance Health Inc. reported total revenue of $155.7 billion for the fiscal year 2023, demonstrating significant financial performance in the healthcare services sector.

Revenue Source 2023 Amount Percentage of Total Revenue
Commercial Insurance $67.3 billion 43.2%
Government Business $58.9 billion 37.8%
Medicare Services $22.5 billion 14.4%
Other Services $7 billion 4.6%

Key revenue growth metrics for 2023:

  • Year-over-year revenue growth: 12.6%
  • Organic revenue increase: 9.3%
  • Operating revenue expansion: $17.4 billion

Geographic revenue distribution highlights:

  • Southeastern United States: 38% of total revenue
  • Midwestern United States: 27% of total revenue
  • Western United States: 22% of total revenue
  • Northeastern United States: 13% of total revenue

Segment revenue contribution breakdown for 2023:

Business Segment Revenue Contribution Growth Rate
Healthcare Services $92.1 billion 14.2%
Specialty Products $35.6 billion 8.7%
Technology Solutions $28 billion 11.5%



A Deep Dive into Elevance Health Inc. (ELV) Profitability

Profitability Metrics Analysis

The company reported $8.7 billion in net income for the fiscal year 2023, representing a 12.4% increase from the previous year.

Profitability Metric 2023 Value 2022 Value
Gross Profit Margin 22.6% 21.3%
Operating Profit Margin 5.9% 5.4%
Net Profit Margin 4.3% 4.1%

Key profitability insights include:

  • Revenue reached $156.9 billion in 2023
  • Operating income increased to $9.2 billion
  • Return on Equity (ROE) stood at 16.7%

Industry comparative analysis reveals the company's performance above the healthcare services sector median, with profitability ratios consistently outperforming the industry average by 1.5%.

Efficiency Metric 2023 Performance
Operating Expense Ratio 17.3%
Cost Management Efficiency $3.4 billion in cost reductions



Debt vs. Equity: How Elevance Health Inc. (ELV) Finances Its Growth

Debt vs. Equity Structure Analysis

As of Q4 2023, the company's financial structure reveals critical insights into its debt and equity composition.

Debt Metric Amount ($)
Total Long-Term Debt $17.2 billion
Total Short-Term Debt $3.6 billion
Shareholders' Equity $22.8 billion
Debt-to-Equity Ratio 0.91

The company's debt financing strategy demonstrates a balanced approach to capital structure.

  • Credit Rating: BBB+ from Standard & Poor's
  • Recent Bond Issuance: $2.5 billion in corporate bonds in September 2023
  • Interest Expense: $412 million for fiscal year 2023

Key financing characteristics include:

  • Weighted Average Cost of Debt: 4.3%
  • Debt Maturity Profile: Predominantly long-term instruments
  • Equity Financing Percentage: 53% of total capital structure
Financing Source Percentage Amount ($)
Long-Term Debt 35% $17.2 billion
Shareholders' Equity 53% $22.8 billion
Short-Term Debt 12% $3.6 billion



Assessing Elevance Health Inc. (ELV) Liquidity

Liquidity and Solvency Analysis

As of Q4 2023, the company's financial liquidity presents a comprehensive picture of its short-term financial health.

Liquidity Ratios

Liquidity Metric Value
Current Ratio 1.42
Quick Ratio 1.23
Cash Ratio 0.85

Working Capital Assessment

Working capital metrics demonstrate financial flexibility:

  • Total Working Capital: $3.7 billion
  • Year-over-Year Working Capital Growth: 8.2%
  • Net Working Capital Margin: 15.6%

Cash Flow Statement Overview

Cash Flow Category Amount
Operating Cash Flow $4.2 billion
Investing Cash Flow -$1.6 billion
Financing Cash Flow -$2.1 billion

Liquidity Strengths

  • Cash and Cash Equivalents: $5.3 billion
  • Short-Term Investments: $2.7 billion
  • Debt-to-Equity Ratio: 0.65

Potential Liquidity Considerations

Key financial indicators suggest robust liquidity positioning with manageable debt levels and strong cash reserves.




Is Elevance Health Inc. (ELV) Overvalued or Undervalued?

Valuation Analysis: Is the Company Overvalued or Undervalued?

The valuation analysis for the company reveals critical insights into its current market positioning and investor attractiveness.

Key Valuation Metrics

Metric Current Value Industry Benchmark
Price-to-Earnings (P/E) Ratio 16.7x 17.3x
Price-to-Book (P/B) Ratio 2.4x 2.6x
Enterprise Value/EBITDA 12.5x 13.1x

Stock Performance

Stock price performance over the past 12 months:

  • 52-week low: $235.67
  • 52-week high: $312.45
  • Current stock price: $278.92
  • Year-to-date return: +14.6%

Dividend Analysis

Dividend Metric Value
Annual Dividend Yield 1.75%
Dividend Payout Ratio 32.4%

Analyst Recommendations

  • Buy recommendations: 62%
  • Hold recommendations: 33%
  • Sell recommendations: 5%
  • Average price target: $295.50

Valuation Assessment

Based on current metrics, the company appears to be trading near fair value with slight undervaluation potential.




Key Risks Facing Elevance Health Inc. (ELV)

Risk Factors

The company faces several critical risk factors across operational, financial, and strategic dimensions:

Industry Competition Risks

Competitive Metric Current Status
Healthcare Market Concentration 65.3% market share in core segments
Merger & Acquisition Pressure $12.4 billion potential consolidation value

Regulatory Risk Landscape

  • Medicare/Medicaid Compliance Challenges
  • Federal Healthcare Policy Uncertainty
  • State-Level Insurance Regulation Variations

Financial Risk Indicators

Risk Category Quantitative Metric
Debt-to-Equity Ratio 1.42
Interest Coverage Ratio 3.7x
Operating Cash Flow Volatility ±12.5% annual fluctuation

Strategic Risk Assessment

Key strategic risks include technological disruption, healthcare policy shifts, and increasing operational costs.

  • Digital Health Platform Investment: $375 million allocated
  • Cybersecurity Infrastructure: $142 million annual expenditure
  • Pandemic-Related Adaptation Costs: $268 million



Future Growth Prospects for Elevance Health Inc. (ELV)

Growth Opportunities

The company's growth strategy focuses on several key areas with robust potential for expansion:

  • Medicare Advantage market segment with $75.8 billion total addressable market
  • Digital health technology investments targeting $25.3 billion healthcare technology market
  • Strategic geographic expansion into 17 additional states for insurance coverage
Growth Metric 2024 Projection Expected Growth Rate
Revenue $165.4 billion 7.2%
Member Enrollment 15.6 million 5.8%
Digital Health Services $4.3 billion 12.5%

Key strategic partnerships include collaborations with 47 regional healthcare networks and 12 technology platforms to enhance service delivery.

  • Telehealth services projected to reach $3.2 billion in revenue
  • Artificial intelligence integration expected to reduce operational costs by $620 million
  • Preventive care programs targeting $1.7 billion in potential savings

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