CVS Valuation

CVS Health Corp

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73.150

+1.01(1.400%)1D

Overview
Forecast
Valuation
Earnings

CVS Relative Valuation

CVS's fair value is calculated using relative valuation, based on historical P/E and P/S ranges and their premiums/discounts relative to a competitor average, adjusted by weights. If the market price exceeds this fair value range, CVS is overvalued; if below, it's undervalued.

Historical Valuation

CVS Health Corp (CVS) is now in the Fair zone, suggesting that its current forward PE ratio of 11.11 is considered Fairly compared with the five-year average of 10.04. The fair price of CVS Health Corp (CVS) is between 68.38 to 83.06 according to relative valuation methord.

Relative Value

Fair Zone

68.38-83.06

Current Price：73.15

Fair

11.11

Trailing

Forward

9.34

EV/EBITDA

CVS Health Corp. (CVS) has a current EV/EBITDA of 9.34. The 5-year average EV/EBITDA is 9.04. The thresholds are as follows: Strongly Undervalued below 7.32, Undervalued between 7.32 and 8.18, Fairly Valued between 9.90 and 8.18, Overvalued between 9.90 and 10.76, and Strongly Overvalued above 10.76. The current Forward EV/EBITDA of 9.34 falls within the Historic Trend Line -Fairly Valued range.

11.27

EV/EBIT

CVS Health Corp. (CVS) has a current EV/EBIT of 11.27. The 5-year average EV/EBIT is 10.46. The thresholds are as follows: Strongly Undervalued below 8.39, Undervalued between 8.39 and 9.43, Fairly Valued between 11.49 and 9.43, Overvalued between 11.49 and 12.53, and Strongly Overvalued above 12.53. The current Forward EV/EBIT of 11.27 falls within the Historic Trend Line -Fairly Valued range.

0.23

CVS Health Corp. (CVS) has a current PS of 0.23. The 5-year average PS is 0.30. The thresholds are as follows: Strongly Undervalued below 0.13, Undervalued between 0.13 and 0.22, Fairly Valued between 0.39 and 0.22, Overvalued between 0.39 and 0.47, and Strongly Overvalued above 0.47. The current Forward PS of 0.23 falls within the Historic Trend Line -Fairly Valued range.

8.53

P/OCF

CVS Health Corp. (CVS) has a current P/OCF of 8.53. The 5-year average P/OCF is 8.72. The thresholds are as follows: Strongly Undervalued below 3.77, Undervalued between 3.77 and 6.24, Fairly Valued between 11.19 and 6.24, Overvalued between 11.19 and 13.67, and Strongly Overvalued above 13.67. The current Forward P/OCF of 8.53 falls within the Historic Trend Line -Fairly Valued range.

15.02

P/FCF

CVS Health Corp. (CVS) has a current P/FCF of 15.02. The 5-year average P/FCF is 10.27. The thresholds are as follows: Strongly Undervalued below 5.67, Undervalued between 5.67 and 7.97, Fairly Valued between 12.57 and 7.97, Overvalued between 12.57 and 14.87, and Strongly Overvalued above 14.87. The current Forward P/FCF of 15.02 falls within the Strongly Overvalued range.

CVS Health Corp (CVS) has a current Price-to-Book (P/B) ratio of 1.20. Compared to its 3-year average P/B ratio of 1.23 , the current P/B ratio is approximately -2.38% higher. Relative to its 5-year average P/B ratio of 1.36, the current P/B ratio is about -11.69% higher. CVS Health Corp (CVS) has a Forward Free Cash Flow (FCF) yield of approximately 5.15%. Compared to its 3-year average FCF yield of 11.07%, the current FCF yield is approximately -53.46% lower. Relative to its 5-year average FCF yield of 11.77% , the current FCF yield is about -56.21% lower.

1.20

P/B

Median3y

1.23

Median5y

1.36

5.15

FCF Yield

Median3y

11.07

Median5y

11.77

Competitors Valuation Multiple

The average P/S ratio for CVS's competitors is 0.49, providing a benchmark for relative valuation. CVS Health Corp Corp (CVS) exhibits a P/S ratio of 0.23, which is -52.85% above the industry average. Given its robust revenue growth of 8.42%, this premium appears unsustainable.

P/S

P/E

EV/EBITDA

EV/EBIT

P/S

Revenue Growth

Market Cap

Walgreens Boots Alliance Inc

Guardian Pharmacy Services Inc

1.18

35.86%

1.67B

Performance Decomposition

Market capitalization of CVS increased by 20.35% over the past 1 year. The primary factor behind the change was an increase in P/E Change from 12.79 to 20.37.

The secondary factor is the Revenue Growth, contributed 8.42%to the performance.

Overall, the performance of CVS in the past 1 year is driven by P/E Change. Which is more unsustainable.

8.42%

91.23B → 98.92B

Revenue Growth

-47.42%

1.94 → 1.02

Margin Expansion

59.35%

12.79 → 20.37

P/E Change

20.35%