CVS Health Corporation (CVS) Financial Analysis

Snapshot

CVS Health generated $402.1 billion of revenue in FY2025, with $180.9 billion of gross profit, $4.7 billion of operating income and $1.7 billion of net income in FY2025. Diluted EPS was $1.39 in FY2025.

The latest reported quarter, Q2 FY2026, recorded $106.1 billion of revenue, $47.2 billion of gross profit, $4.7 billion of operating income and $3.0 billion of net income. Diluted EPS was $2.31 in Q2 FY2026, and free cash flow was $5.7 billion in Q2 FY2026. Revenue over the TTM to Q2 FY2026 was $415.1 billion, while net income over the TTM to Q2 FY2026 was $4.9 billion.

Growth

Revenue increased 7.85% in FY2025 against FY2024, reaching $402.1 billion in FY2025. Revenue compound annual growth was 7.63% in FY2022–FY2025 and 8.39% in FY2020–FY2025. Diluted EPS was $1.39 in FY2025, with growth of −62.0% in FY2025 against FY2024; its compound annual growth was −23.8% in FY2022–FY2025 and −23.9% in FY2020–FY2025.

Free cash flow was $7.8 billion in FY2025 and grew 23.4% in FY2025 against FY2024, though its compound annual growth was −16.6% in FY2022–FY2025. In Q2 FY2026, revenue rose 7.26% against Q2 FY2025, diluted EPS rose 188.7% against Q2 FY2025, and free cash flow rose 338.3% against Q2 FY2025.

Profitability

Gross margin was 45.0% in FY2025, an increase of 6.0 percentage points in FY2020–FY2025. Operating margin was 1.16% in FY2025, a decrease of −4.0 percentage points in FY2020–FY2025. Pre-tax margin was 0.53% in FY2025, down −3.1 percentage points in FY2020–FY2025, and net margin was 0.43% in FY2025, down −2.2 percentage points in FY2020–FY2025.

Returns on capital also declined over the latest year: return on equity was 2.34%, return on assets was 0.70%, and return on invested capital was 2.25% in FY2025. In Q2 FY2026, gross margin was 44.5% and operating margin was 4.43%. No industry-median profitability or return measures are reported.

Balance sheet

Total debt was $64.6 billion in FY2025, compared with $66.3 billion in FY2024. Net debt was $54.0 billion in FY2025, compared with $55.3 billion in FY2024, while cash and short-term investments were $10.6 billion in FY2025. Shareholders’ equity was $75.4 billion in FY2025 and book value per share was $59.50 in FY2025.

At Q2 FY2026, net debt was $47.5 billion, and net debt changed by −$3.9 billion in Q2 FY2026 against Q1 FY2026. The current ratio was 0.9× in Q2 FY2026, while debt to equity was 0.8× in Q2 FY2026. Working capital was −$14.0 billion in FY2025.

Cash flow & capital return

Operating cash flow was $10.6 billion in FY2025, increasing 16.8% in FY2025 against FY2024. Capital expenditure was $2.8 billion in FY2025, and free cash flow was $7.8 billion in FY2025, up 23.4% in FY2025 against FY2024. Free cash flow represented 451.8% of net income in FY2025.

Dividends paid were $3.4 billion in FY2025. Net share repurchases were −$394.0 million in FY2025, and capital returned to shareholders was $3.0 billion in FY2025. Weighted average shares were 1.3 billion shares in FY2025; the share-count change was −3.21% in FY2020–FY2025. In Q2 FY2026, free cash flow was $5.7 billion, after $3.4 billion in Q1 FY2026.

Valuation

Market capitalisation was $112.4 billion as of September 28, 2026. P/E was 22.9× as of September 28, 2026, higher than the 17.2× five-year median as of September 28, 2026, over the five fiscal years to FY2025, and below the 23.6× industry median as of September 28, 2026.

P/S was 0.3× as of September 28, 2026, equal to its 0.3× five-year median and below its 0.4× ten-year median. P/B was 1.4× as of September 28, 2026, equal to its 1.4× five- and ten-year medians and below the 2.4× industry median. EV/Sales was 0.4× as of September 28, 2026, equal to its 0.4× five-year median and below its 0.5× ten-year median.

What changed since last quarter

Revenue was $106.1 billion in Q2 FY2026, up 5.65% against Q1 FY2026 and 7.26% against Q2 FY2025. Diluted EPS was $2.31 in Q2 FY2026, up 0.43% against Q1 FY2026 and 188.7% against Q2 FY2025. Free cash flow was $5.7 billion in Q2 FY2026, up 66.3% against Q1 FY2026 and 338.3% against Q2 FY2025.

Operating margin was 4.43% in Q2 FY2026, down −0.2 percentage points against Q1 FY2026 but up 2.0 percentage points against Q2 FY2025. Management attributes the year-over-year revenue increase to growth across operating segments. Management attributes the operating-income increase to improved operating performance and the absence of prior-year legacy litigation charges. Management attributes higher operating cash flow in the six months ended June 30, 2026 to payment timing and improved Health Care Benefits performance.

Open questions

How durable is the improvement in operating performance across the operating segments?
How will the exit of the individual exchange business affect membership and revenue mix?
To what extent will pharmacy client price improvements, reimbursement pressure and drug-price changes affect results?
How will continued business investments and costs supporting acquired assets affect operating expenses?

Sources

Form 10-Q filed August 5, 2026 — management’s discussion and analysis

This page is for information only. It is not investment advice, a recommendation or an offer to buy or sell any security. Figures come from the sources listed above and may contain errors; verify against the company's filings.