Why Elevance Health (ELV) Is Among the Best Telehealth Stocks to Buy Now

Elevance Health (NYSE: ELV), a leading managed care organization with a focus on Medicare Advantage (MA) and integrated telehealth services, has emerged as a standout player in the healthcare sector. With a robust financial performance, strategic initiatives, and a favorable regulatory backdrop, the company is positioned to capitalize on growing demand for telehealth and holistic healthcare solutions. Below is an analysis of why investors should consider Elevance Health as a top telehealth stock to buy now.

Market Position and Financial Strength

Elevance Health ranks third among the best telehealth stocks to buy in 2025, driven by its 800,000+ virtual visits in 2023 and its three core segments: Health Benefits (health plans), CarelonRx (pharmacy services), and Carelon Services (integrated care). These segments collectively generated $45 billion in Q4 2024 revenue, a 6% year-over-year increase, with total operating income rising 3% to $175.2 billion in 2024.

The company’s Q1 2025 results were particularly strong, with an adjusted EPS of $11.97, surpassing both its internal guidance of $11.62 and the analyst consensus of $11.32. Full-year 2025 guidance remains intact at $34.15–$34.85 per share, supported by 9.9% projected growth in Medicare Advantage membership to 2.2–2.25 million members.

Strategic Initiatives Driving Growth

1. Telehealth Expansion: Elevance’s telehealth services are embedded in its Carelon Services segment, offering integrated behavioral, physical, pharmacy, and social care. This holistic approach aligns with rising consumer demand for convenient, accessible healthcare solutions.
2. Partnerships and Innovation: The company’s recent partnership with a healthcare technology firm aims to enhance digital health offerings, improving patient accessibility and outcomes.
3. Mental Health Focus: A new initiative to expand mental health resources underscores Elevance’s commitment to addressing a growing societal need, differentiating it from competitors.
4. Medicare Advantage Dominance: Elevance benefits from a 5.06% increase in Medicare payment rates for 2026, projected to add over $25 billion in industry revenue. With 2.2 million MA members, it is well-positioned to capture this upside.

Competitive Landscape and Risks

Elevance operates in a crowded but high-growth sector. Key competitors include UnitedHealth Group (UNH), Humana (HUM), and Molina Healthcare (MOH). While UnitedHealth faces headwinds from rising MA costs (leading to a 23% stock decline in early 2025), Elevance has demonstrated superior cost management and earnings resilience.

Risks:
- Medicaid Margin Pressures: Elevance’s Medicaid membership dipped 4.7% in Q1 2025, reflecting a strategic pivot toward higher-margin MA.
- Regulatory and Sector Volatility: Rising medical costs and CMS policy changes pose risks, though Elevance’s pricing discipline and scale mitigate these concerns.

Analyst and Investor Sentiment

Analysts maintain a bullish consensus, with an average rating of Outperform and a $493.87 price target (16.3% upside from April 2025’s $424.53). GuruFocus estimates a $622.65 “GF Value” (46.6% premium), while Bernstein raised its target to $585, citing margin recovery potential.

Elevance’s P/E ratio of 16.1x is undervalued relative to peers, and its $96.11 billion market cap reflects investor confidence in its long-term prospects.

Conclusion

Elevance Health is a compelling buy for investors seeking exposure to telehealth and Medicare Advantage growth. Its strategic focus on MA, telehealth integration, and prudent financial management position it to outperform peers like UnitedHealth Group. With CMS rate hikes, expanding mental health initiatives, and a robust analyst outlook, ELV offers a 16.3% upside potential and a dividend yield of 1.6%, making it a balanced play for growth and income.

While risks such as Medicaid margin pressures exist, Elevance’s scale, brand strength (via its Blue Cross Blue Shield network), and disciplined execution suggest these are manageable. As telehealth adoption continues to rise and Medicare enrollment grows, Elevance Health is primed to deliver sustained outperformance in 2025 and beyond.