QS Research · Michael Burry's Scion Capital analyst template · 2006
Cigna Group (CI)
As of 2026-11-11 · 12/15 boxes filled from SEC filings and market data
Report price $303.13 (close 2026-11-10)
Conclusion: LONG
Conviction medium · base case +72% · downside -24% · upside +95%
At $303.13, Cigna trades at 13.3x TTM net income of $5.99B and 1.84x book for 13.8% ROE; the independent 22.9x peer-median P/E gives a base value of $521.93, or +72%. I use TTM net income for all cases: downside assumes 10% lower earnings and an 11.3x compressed P/E, giving about $231 (-24%), while upside assumes 26x on the same TTM earnings, about $591 (+95%), supported by the dated 2026-11-05 guidance raise and the Investor Day 10%-14% adjusted EPS CAGR target. The market is missing that Cigna Healthcare and Specialty are growing, the FTC PBM settlement removes an overhang, and capital return plus a net-cash balance sheet protect per-share value, but the no-moat PBM economics and large-client repricing argue for a discount. The verdict is long because the anchored base is +30% or higher and the downside is better than -25%, with medium conviction.
Key numbers
- Share price: $303.13
- Market cap: $79.88B
- Latest financial period: TTM to Sep 30, 2026
- Revenue (TTM): $286.32B
- P/E (TTM): 13.3x
- Price / book: 1.84x
- Earnings-quality flags (TTM): none flagged
- Revenue growth (latest fiscal year): +11.2%
The 15 boxes
- ✓ 1. Long-form business notes
Cigna Group is a two-segment global health company: Evernorth Health Services (pharmacy benefit services plus specialty and care services) and Cigna Healthcare (U.S. Healthcare plus International Health), with Other Operations holding run-off and COLI businesses. Scale has grown fast — revenue $160.40B in FY2020 to $274.90B in FY2025 and $286.32B TTM to 2026-09-30 — while operating income rose far less, from $8.15B to $9.20B and $9.78B TTM. The portfolio changed materially between the two annual reports: Evernorth was launched and named as a segment in 2020, the group disability/life business was sold to New York Life on December 31, 2020, and the Medicare Advantage, Part D, Medicare Supplement and CareAllies businesses were sold to HCSC on March 19, 2025, leaving a more Evernorth-weighted company. Unit economics run through funding mix (ASO vs insured), rebate sharing, and large single clients rather than through fixed assets.
- ✓ 2. Competitive advantage
Cigna's advantages are scale-based, not price-based: a 1.7 million-physician / 6,000-hospital U.S. network (as of December 31, 2025) and an array of funding solutions are the named competitive edges, but the company's own risk factors say clients "can easily move between our competitors and us" and that price remains a primary basis of competition. The record shows growth without margin: revenue rose from $160.40B (FY2020) to $274.90B (FY2025) and $286.32B (TTM to 2026-09-30) while operating income went only $8.15B to $9.20B to $9.78B, so operating margin fell from about 5.1% to about 3.4% (computed from the XBRL figures). Returns are real but uneven — net income $5.96B on total equity $41.71B in FY2025 after $3.43B on $41.03B in FY2024 — and concentration is high: one pharmacy benefit client was ~19% of total external revenue in FY2025.
- ✓ 3. 10-Q takeaways
Q3 2026 total revenues rose 6% to $73.7B and adjusted income from operations was $2.1B, or $7.98 per share, versus $7.83 a year earlier, while GAAP shareholders' net income fell 23% to $1.4B ($5.47) mainly on the absence of a Q3 2025 after-tax gain on sale. Evernorth grew adjusted revenues 6% but pre-tax adjusted income fell 4% (Pharmacy Benefit Services -22%); Cigna Healthcare pre-tax adjusted income rose 15% on 9% revenue with an MCR of 85.0%. Full-year 2026 guidance was raised to at least $30.60 adjusted EPS, and nine-month operating cash flow was $3,281M versus $3,452M.
- ✓ 4. Corporate governance
Filled; members read this box.
- ✓ 5. Overview of the prior 3 years of 8-K filings
Filled; members read this box.
- ✓ 6. Other significant filings
Filled; members read this box.
- ✓ 7. Chronology of significant news and events
Filled; members read this box.
- ✓ 8. Comparables valuation interpretation
Filled; members read this box.
- ✓ 9. Insider trading interpretation
Filled; members read this box.
- ○ 10. Earnings-call notes
- ○ 11. Impression of the shareholder letter
- ○ 12. Scuttlebutt overview
- ✓ 13. Valuation and risk/reward summary
Filled; members read this box.
- ✓ 14. Current price suppression and potential catalysts
Filled; members read this box.
- ✓ 15. Conclusions
The call above.
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