CVS HEALTH Corp (CVS) stock analysis

P/E below its 5-year median

Cvs Health's P/E of 10.4 is below its own 5-year median of 18.0.

P/E below the industry

Cvs Health's P/E of 10.4 is below the Miscellaneous Retail median of 17.9.

EV/EBITDA below its 5-year median

Cvs Health's EV/EBITDA of 8.2 is below its 5-year median of 10.3.

P/B below the industry

Cvs Health's price-to-book of 1.42 is below the Miscellaneous Retail median of 2.05.

Trading below fair value

The share price of $89.52 is below our fair value estimate of $129.23.

Margin of safety over 20%

The price is 30.7% below fair value, more than the 20% cushion we look for.

Revenue growing under 10% a year

Revenue grew 7.6% a year over the last three fiscal years, short of the 10% we look for.

EPS growing under 10% a year

Diluted EPS grew -24.7% a year over the last three fiscal years.

Earnings growth accelerating

Net income grew 2253% over the last twelve months, against a 5-year average of -24.4% a year.

Growing faster than the industry

Revenue grew 6.7% over the last twelve months; the Miscellaneous Retail median is 5.9%.

Guidance raised

Cvs Health raised its 2026 Projected Total revenues outlook on Aug 5, 2026.

Gross margin slipping

Gross margin was 44.2% over the last twelve months, against 44.8% a year earlier.

Return on equity under 15%

Return on equity was 14.4% over the last twelve months and averaged 7.3% over five years; we look for 15% on both.

Return on capital over 10%

Return on invested capital was 10.8%, above the 10% that usually covers the cost of capital.

Return on equity above the industry

Cvs Health's return on equity of 14.4% is above the Miscellaneous Retail median of -3.2%.

Earnings shrank over 5 years

Net income shrank 24.4% a year on average over the last five fiscal years.

Net margin above its 5-year average

Net margin was 2.6% over the last twelve months, against a 5-year average of 1.6%.

Net margin above the industry

Cvs Health's net margin of 2.6% is above the Miscellaneous Retail median of -0.3%.

High debt

Debt is 75.4% of shareholders' equity, above the 40% we consider low.

Debt falling against equity

Debt to equity fell from 93.2% five years ago to 75.4%.

Debt covered by cash flow

Operating cash flow over the last twelve months equals 30.8% of total debt.

Interest not well covered

Operating income covers interest expense 4.9 times; we look for at least 5.

Short-term assets don't cover short-term debts

Current assets are 0.85 times current liabilities.

Bankruptcy risk in the grey zone

The Altman Z-score is 2.51; above 3 is the safe zone and below 1.8 the distress zone.

Pays a dividend

Cvs Health paid dividends worth 2.2% of the share price over the last twelve months.

Yield below Treasuries

The 2.2% yield is below the 4.4% on a 1-year Treasury.

Yield below the top quarter

The top quarter of US dividend payers yield 3.8% or more; Cvs Health yields 2.2%.

Dividend not cut

The dividend per share has not fallen by more than 10% in any of the last 10 fiscal years.

Covered by earnings

Dividends take 31.0% of net income.

Covered by free cash flow

Dividends take 22.0% of free cash flow.