QS Research · Michael Burry's Scion Capital analyst template · 2006
Elevance Health, Inc. (ELV)
As of 2026-11-11 · 12/15 boxes filled from SEC filings and market data
Report price $429.65 (close 2026-11-10); latest close $429.48 (2026-11-11), +0.0% since the report; figures re-marked at the latest close
Conclusion: LONG
Conviction medium · base case +32% · downside -24% · upside +47%
The market is paying 18.1x TTM net income and 2.08x book for an 11.5% ROE, a mid-pack multiple that treats the current $5.43B TTM operating income as the run-rate even though Q3 2026 adjusted EPS beat and the 2026-10-21 release raised FY2026 adjusted EPS to at least $29.00 and framed 2027 at at least 12% growth. At the independent peer-median 23.8x P/E the base case is $564.95, or +31%; adding 12% 2027 EPS growth at that same multiple gives about $633, or +47%. A 10% decline from TTM net income at a compressed approximately 15.4x P/E gives about $329, or -24%, so the downside stays inside the -25% long threshold. The dated catalyst is the Oct 21 guidance raise and 2027 growth frame; the risk is that margin compression, membership loss and CMS/Medicaid cost issues prove permanent rather than temporary, so conviction is medium.
Key numbers
- Share price: $429.48
- Market cap: $92.79B
- Latest financial period: TTM to Sep 30, 2026
- Revenue (TTM): $201.83B
- P/E (TTM): 18.1x
- Price / book: 2.08x
- Earnings-quality flags (TTM): none flagged
- Revenue growth (latest fiscal year): +12.5%
The 15 boxes
- ✓ 1. Long-form business notes
Elevance Health is a large U.S. health insurer/health-services company with 45.2M medical members at Dec 31, 2025 and four reportable segments: Health Benefits, CarelonRx, Carelon Services and Corporate & Other. It earns risk-based premiums, administrative fees from self-funded employers, and Carelon pharmacy/health-service fees; U.S. government agencies were about 32% of FY2025 consolidated revenue. FY2025 revenue was $199.12B, operating income $7.20B and net income $5.66B; TTM to Sep 30, 2026 revenue was $201.83B, operating income $5.43B and net income $5.14B. From FY2020 to FY2025 the filing language shifted from IngenioRx/Diversified Business Group to CarelonRx/Carelon Services, with acquisitions and a planned 2026 exit from Medicare Part D.
- ✓ 2. Competitive advantage
Elevance has a real but narrow moat: an exclusive licence to the BCBS brand in its most significant markets, #1 local share in each BCBS market, and provider networks it says give it a "highly competitive unit cost position". The financial record does not show that advantage widening: revenue rose from $121.87B (FY2020) to $199.12B (FY2025) to $201.83B (TTM to Sep 2026), but operating income fell from $8.50B (FY2023) to $7.20B (FY2025) to $5.43B (TTM), so operating margin fell from roughly 5.2% in FY2020 to 2.7% TTM. Returns are still decent rather than exceptional, at about 12.9% on FY2025 total equity and 11.5% on TTM equity (my arithmetic on the XBRL figures), with no preferred stock in the capital structure. Competition is on price and bids, and new PBM rebate and Part D rules plus state PBM laws bear directly on the Carelon pharmacy business.
- ✓ 3. 10-Q takeaways
Q3 2026 was a modest top line with a better bottom line: operating revenue $50,440 million (+0.7% YoY) and shareholders' net income $1,365 million (+14.8%), EPS $6.27 versus adjusted diluted EPS $6.99, with a $1.85 per share net non-operating benefit sitting inside the GAAP number. The medical side improved (benefit expense ratio 90.6%, down 70 bp on Medicare Advantage and Individual ACA) while the operating expense ratio rose 90 bp to 11.4% on targeted one-time investments, so Health Benefits operating gain fell to $436 million from $601 million and Carelon carried the quarter. Nine-month shareholders' net income fell 10.2% to $4,592 million, driven by a Medicare Advantage risk adjustment loss contingency accrual, while nine-month operating cash flow rose to $7,512 million from $4,206 million. Management raised FY 2026 guidance to at least $22.00 diluted EPS and at least $29.00 adjusted diluted EPS, with operating cash flow at least $6.5 billion.
- ✓ 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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