CVS Health Corporation
CVS Health Corporation Fundamental Analysis
CVS Health Corporation (CVS) shows weak financial fundamentals with a PE ratio of 41.89, profit margin of 0.72%, and ROE of 3.87%. The company generates $408.8B in annual revenue with moderate year-over-year growth of 7.85%.
Key Strengths
Areas of Concern
The stock receives a Fundamental Health Score of 35.2/100 based on profitability, valuation, growth, and balance sheet metrics. The F grade reflects weak fundamentals and significant financial concerns.
Fundamental Health Score
We analyze CVS's fundamental strength across five key dimensions:
Efficiency Score
WeakCVS struggles to generate sufficient returns from assets.
Valuation Score
ModerateCVS shows balanced valuation metrics.
Growth Score
ModerateCVS shows steady but slowing expansion.
Financial Health Score
WeakCVS carries high financial risk with limited liquidity.
Profitability Score
WeakCVS struggles to sustain strong margins.
Key Financial Metrics
Is CVS Expensive or Cheap?
P/E Ratio
CVS trades at 41.89 times earnings. This suggests a premium valuation.
PEG Ratio
When adjusting for growth, CVS's PEG of -0.93 indicates potential undervaluation.
Price to Book
The market values CVS Health Corporation at 1.59 times its book value. This may indicate undervaluation.
EV/EBITDA
Enterprise value stands at 4.88 times EBITDA. This is generally considered low.
How Well Does CVS Make Money?
Net Profit Margin
For every $100 in sales, CVS Health Corporation keeps $0.72 as profit after all expenses.
Operating Margin
Core operations generate 1.46 in profit for every $100 in revenue, before interest and taxes.
ROE
Management delivers $3.87 in profit for every $100 of shareholder equity.
ROA
CVS Health Corporation generates $1.16 in profit for every $100 in assets, demonstrating efficient asset deployment.
Following the Money - Real Cash Generation
Operating Cash Flow
CVS Health Corporation generates limited operating cash flow of $10.36B, signaling weaker underlying cash strength.
Free Cash Flow
CVS Health Corporation generates weak or negative free cash flow of $7.41B, restricting financial flexibility.
FCF Per Share
Each share generates $5.81 in free cash annually.
FCF Yield
CVS converts 6.02% of its market value into free cash.
Financial Ratios Analysis
Valuation Ratios
P/E Ratio
Price to earnings ratio
41.89
vs 25 benchmark
PEG Ratio
Price/earnings to growth ratio
-0.93
vs 25 benchmark
P/B Ratio
Price to book value ratio
1.59
vs 25 benchmark
P/S Ratio
Price to sales ratio
0.30
vs 25 benchmark
Financial Health
Debt/Equity
Total debt to shareholders' equity
1.01
vs 25 benchmark
Current Ratio
Current assets to current liabilities
0.87
vs 25 benchmark
Efficiency Ratios
ROE
Return on equity percentage
0.04
vs 25 benchmark
ROA
Return on assets percentage
0.01
vs 25 benchmark
ROCE
Return on capital employed
0.04
vs 25 benchmark
How CVS Stacks Against Its Sector Peers
| Metric | CVS Value | Sector Average | Performance |
|---|---|---|---|
| P/E Ratio | 41.89 | 28.62 | Worse (Expensive) |
| ROE | 3.87% | 788.00% | Weak |
| Net Margin | 0.72% | -48085.00% (disorted) | Weak |
| Debt/Equity | 1.01 | 0.39 | Weak (High Leverage) |
| Current Ratio | 0.87 | 4.11 | Weak Liquidity |
| ROA | 1.16% | -21875.00% (disorted) | Weak |
CVS outperforms its industry in 0 out of 6 key metrics, but lagging in P/E Ratio.
Historical Growth Performance
5-Year Growth Trajectory
This section reviews CVS Health Corporation's 5-year compound annual growth rate (CAGR) and compares its performance against the typical investment style of its industry.
Revenue CAGR
54.59%
Industry Style: Defensive, Growth, Innovation
High GrowthEPS CAGR
-74.56%
Industry Style: Defensive, Growth, Innovation
DecliningFCF CAGR
-30.72%
Industry Style: Defensive, Growth, Innovation
Declining