CVS Beats on Q4 Earnings and Revenues but Shares Slide in Pre-Market

CVS Health Corporation CVS posted fourth-quarter 2025 adjusted earnings per share (EPS) of $1.09, down 8.4% year over year. The metric, however, topped the Zacks Consensus Estimate by 10.1%. The adjusted EPS figure considers certain asset amortization costs, acquisition-related integration costs and other adjustments.

On a reported basis, the company’s fourth-quarter GAAP earnings were $2.30 per share, up 76.9% year over year.

Full-year adjusted EPS was $6.75, increasing 24.5% from 2024 and beating the Zacks Consensus Estimate by 1.5%.

Revenues

Revenues rose 8.2% year over year to $105.69 billion. The top line surpassed the Zacks Consensus Estimate by 2.2%. This year-over-year upside was driven by revenue growth across all segments.

For 2025, total revenues came in at $402.07 billion, rising 7.8% from 2024 and exceeding the Zacks Consensus Estimate by 0.6%.

Following the announcement, CVS shares were down 1.3% in the pre-market trading session today.

Detailed Analysis of CVS’ Q4 Revenues

Health Services revenues increased 9% year over year to $51.24 billion, mainly driven by pharmacy drug mix and brand inflation, partially offset by continued pharmacy client price improvements.

Total pharmacy claims processed fell 7.5% on a 30-day equivalent basis compared with the prior-year level.

Revenues in the Pharmacy & Consumer Wellness segment rose 12.4% year over year to $37.66 billion. The upside was primarily driven by the pharmacy drug mix and increased prescription volume, including incremental volume resulting from the company’s Rite Aid prescription file acquisitions, partially offset by continued pharmacy reimbursement pressure and the impact of recent generic drug introductions.

Within the Health Care Benefits segment, the company registered revenues worth $36.29 billion, up 10.1% year over year. This upside was driven by increases in the Government business, largely due to the impact of the Inflation Reduction Act on the Medicare Part D program.

CVS Health Corporation Price, Consensus and EPS Surprise

CVS Health Corporation price-consensus-eps-surprise-chart | CVS Health Corporation Quote

CVS’ Margin Performance

The combined cost of products sold and healthcare costs rose 8.6% to $92.13 billion in the fourth quarter. Gross profit jumped 5.2% to $13.57 billion. Yet the gross margin contracted 37 basis points (bps) to 12.8%.

Adjusted operating margin in the quarter under review contracted 44 bps to 1.9% despite an 8.9% rise in total operating expenses ($11.46 billion).

Liquidity Position of CVS

CVS Health exited 2025 with cash and cash equivalents of $8.45 billion compared with $8.59 billion at the end of 2024. The long-term debt was $64.57 billion compared with $64.15 billion in the previous quarter.

The cumulative net cash provided by operating activities at the end of the fourth quarter of 2025 was $10.64 billion, compared with $9.11 billion in the year-ago period.

CVS’ 2026 Guidance

CVS Health issued its 2026 adjusted EPS guidance in the range of $7.00-$7.20. The Zacks Consensus Estimate for the metric is currently pegged at $7.15.

Our Take on CVS Stock

CVS Health’s fourth-quarter 2025 earnings and revenues beat the respective estimates. Revenues were up on a year-over-year basis. Within Pharmacy & Consumer Wellness, incremental volume was driven by the company's acquisition of Rite Aid prescription files. CVS’ pharmacy benefit manager, Caremark, closed another strong selling season with retention in the high 90s. Yet, higher costs and expenses led to margin debacle and bottom-line pressure. Persistent pharmacy reimbursement pressure continued to weigh on results.

CVS’ Zacks Rank and Key Picks

CVS Health currently carries a Zacks Rank #3 (Hold).

Some better-ranked stocks from the broader medical space are Envista NVST, National Vision EYE and Resmed RMD.

Envista, carrying a Zacks Rank #1 (Strong Buy) at present, posted fourth-quarter 2025 adjusted EPS of 38 cents, which exceeded the Zacks Consensus Estimate by 18.2%. Revenues of $750.6 million surpassed the Zacks Consensus Estimate by 11.2%. You can seethe complete list of today’s Zacks #1 Rank stocks here.

NVST has an earnings yield of 3.7% compared with the industry’s 2.3% yield. The company’s earnings outpaced estimates in each of the trailing four quarters, with the average surprise being 16.4%.

National Vision, currently carrying a Zacks Rank #2 (Buy), reported  adjusted EPS of 13 cents, which topped the Zacks Consensus Estimate by 8.3%. Revenues of $487.3 million beat the Zacks Consensus Estimate by 2.7%. 

EYE’s earnings yield of 5.8% compares favorably with the industry’s 2.8% yield. The company beat on earnings in each of the trailing four quarters, the average surprise being 2.75%.

Resmed, carrying a Zacks Rank #2 at present, reported second-quarter fiscal 2026 EPS of $2.81, which beat the Zacks Consensus Estimate by 46%. Revenues of $1.42 billion topped the Zacks Consensus Estimate by 2.3%.

RMD has an earnings yield of 7.1% compared with the industry’s 2.8% yield. The company’s earnings outperformed estimates in three of the trailing four quarters and missed in the remaining one, with the average surprise being 2.7%.

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