Elevance Health's Q4 2024 Earnings: A Mixed Bag of Growth and Challenges

Elevance Health Inc (ELV), a leading U.S. health insurer, reported its fourth quarter and full year 2024 earnings on January 23, 2025. The company's financial performance reflected a mix of growth and challenges, with some key metrics exceeding expectations while others fell short. Here's a breakdown of the earnings call and the company's outlook for 2025.

Key Financial Highlights:

* Operating revenue for Q4 2024: $45.0 billion, surpassing analyst estimates of $44.862.61 million.
* Diluted EPS for Q4 2024: $1.81, significantly below the estimated $3.17.
* Adjusted diluted EPS for Q4 2024: $3.84, exceeding expectations.
* Full-year operating revenue for 2024: $175.2 billion, closely aligning with the annual estimate of $175,300.94 million.
* Full-year diluted EPS for 2024: $25.68, while the adjusted diluted EPS was $33.04, surpassing the annual estimate of $27.08.

Growth Drivers and Challenges:

Elevance Health's revenue growth was driven by higher premium yields in the Health Benefits segment, acquisitions, and growth in CarelonRx product revenue. However, the company faced challenges with membership attrition in its Medicaid business, impacting overall performance. The benefit expense ratio increased to 92.4% in Q4 2024, up by 320 basis points from the previous year, primarily due to higher Medicaid medical cost trends.

Outlook for 2025:

Elevance Health's outlook for 2025 includes a projected GAAP diluted EPS range of $30.40 to $31.10 and an adjusted diluted EPS range of $34.15 to $34.85. The company also announced a 5% increase in its quarterly dividend to $1.71 per share and repurchased 4.5 million shares for $1.8 billion.



Analyst Recommendations:

As of January 24, 2025, 19 analysts have provided recommendations for Elevance Health, with 13 analysts rating the stock as a "buy," 4 as a "hold," and 2 as a "sell." The average price target is $415.00, indicating a potential upside of approximately 3.4% from the current stock price of $401.36.

In conclusion, Elevance Health's Q4 2024 earnings call demonstrated a mixed bag of growth and challenges. While the company's revenue and adjusted EPS exceeded expectations, its diluted EPS fell short. The company faces headwinds in managing Medicaid costs and membership retention but remains committed to its strategic focus on expanding product offerings and managing costs effectively. Investors should monitor the company's progress in addressing these challenges and achieving its 2025 outlook.