Is ELV a good stock to buy? We came across a bullish thesis on Elevance Health, Inc. on Grillo Insights’s Substack by Eric García. In this article, we will summarize the bulls’ thesis on ELV. Elevance Health, Inc.’s share was trading at $289.24 as of March 23rd. ELV’s trailing and forward P/E were 11.56 and 11.39 respectively according to Yahoo Finance.
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Elevance Health, Inc., together with its subsidiaries, operates as a health benefits company in the United States. ELV reported Q4 and full-year 2025 results reflecting a challenging environment, yet the company is strategically positioned to recover profitability. Consolidated operating revenue reached $49.3 billion in Q4 (+10% YoY) and $197.6 billion for the full year (+13% YoY), driven by premium growth, acquisitions, and Medicare Advantage membership expansion.
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Despite top-line strength, profitability contracted: full-year adjusted EPS of $30.29 declined 8.3% YoY, partially offset by ~$3.75 per share of non-recurring tax benefits. Elevated medical costs increased the benefit expense ratio to 90% for the year, and adjusted operating margins fell to 3.8% from 5.3% in 2024.
Segment performance was mixed. Health Benefits revenue rose 11% to $167.1 billion, but operating gain dropped 34% with margins at 2.5%, reflecting Medicaid and Medicare Advantage pressures. Medicaid remains the most stressed area, with membership declines, rising costs, and negative operating margins expected in 2026.
Medicare Advantage is being deliberately managed for margin improvement, though enrollment may decline 15-19%. Individual ACA plans are stable, while commercial accounts remain solid. Carelon, including CarelonRx and Carelon Services, posted strong growth (+33% overall), supported by risk-based solutions, acquisitions, and external client expansion, though margins moderated slightly.
Management is focused on operational discipline, advanced analytics, specialty pharmacy programs, patient advocacy expansion, and real-time prior authorizations, alongside recalibrated long-term margin targets reflecting portfolio mix shifts. Cash flow remains healthy at $4.3 billion in 2025 with $4.1 billion returned to shareholders, and 2026 projections target ~$5.5 billion.
While near-term headwinds are significant, Elevance’s disciplined execution, margin-focused strategy, and Carelon growth provide a path to sustainable EPS growth and long-term value creation, making it a cautiously bullish story with upside tied to successful execution and Medicaid stabilization.
