Have you been paying attention to shares of CVS Health (CVS)? Shares have been on the move with the stock up 3.4% over the past month. The stock hit a new 52-week high of $100.55 in the previous session. CVS Health has gained 26.6% since the start of the year compared to the -3.6% move for the Zacks Medical sector and the -6.8% return for the Zacks Medical Services industry.
What's Driving the Outperformance?
The stock has a great record of positive earnings surprises, as it hasn't missed our earnings consensus estimate in any of the last four quarters. In its last earnings report on May 6, 2026, CVS Health reported EPS of $2.57 versus consensus estimate of $2.21 while it beat the consensus revenue estimate by 6.41%.
For the current fiscal year, CVS Health is expected to post earnings of $7.44 per share on $409 in revenues. This represents a 10.22% change in EPS on a 1.72% change in revenues. For the next fiscal year, the company is expected to earn $8.37 per share on $425.13 in revenues. This represents a year-over-year change of 12.5% and 3.94%, respectively.
Valuation Metrics
Though CVS Health has recently hit a 52-week high, what is next for CVS Health? A key aspect of this question is taking a look at valuation metrics in order to determine if the company has run ahead of itself.
On this front, we can look at the Zacks Style Scores, as these give investors a variety of ways to comb through stocks (beyond looking at the Zacks Rank of a security). The individual style scores for Value, Growth, Momentum and the combined VGM Score run from A through F. The idea behind the style scores is to help investors pick the most appropriate Zacks Rank stocks based on their individual investment style.
CVS Health has a Value Score of A. The stock's Growth and Momentum Scores are C and F, respectively, giving the company a VGM Score of B.
In terms of its value breakdown, the stock currently trades at 13.5X current fiscal year EPS estimates, which is not in-line with the peer industry average of 15.4X. On a trailing cash flow basis, the stock currently trades at 6.7X versus its peer group's average of 10.1X. Additionally, the stock has a PEG ratio of 0.98. This is good enough to put the company in the top echelon of all stocks we cover from a value perspective, making CVS Health an interesting choice for value investors.
Zacks Rank
We also need to look at the Zacks Rank for the stock, as this supersedes any trend on the style score front. Fortunately, CVS Health currently has a Zacks Rank of #2 (Buy) thanks to a solid earnings estimate revision trend.
Since we recommend that investors select stocks carrying Zacks Rank of 1 (Strong Buy) or 2 (Buy) and Style Scores of A or B, it looks as if CVS Health passes the test. Thus, it seems as though CVS Health shares could still be poised for more gains ahead.
How Does CVS Stack Up to the Competition?
Shares of CVS have been soaring, and the company still appears to be a decent choice, but what about the rest of the industry? One industry peer that looks good is Labcorp Holdings Inc. (LH). LH has a Zacks Rank of #2 (Buy) and a Value Score of B, a Growth Score of B, and a Momentum Score of A.
Earnings were strong last quarter. Labcorp Holdings Inc. beat our consensus estimate by 3.91%, and for the current fiscal year, LH is expected to post earnings of $18.00 per share on revenue of $14.71 billion.
Shares of Labcorp Holdings Inc. have gained 4.4% over the past month, and currently trade at a forward P/E of 14.73X and a P/CF of 10.68X.
The Medical Services industry is in the top 44% of all the industries we have in our universe, so it looks like there are some nice tailwinds for CVS and LH, even beyond their own solid fundamental situation.
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This article originally published on Zacks Investment Research (zacks.com).