Diversified healthcare company CVS Health (NYSE:CVS) beat Wall Street’s revenue expectations in Q4 CY2025, with sales up 8.2% year on year to $105.7 billion. Its non-GAAP profit of $1.09 per share was 9.4% above analysts’ consensus estimates.
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CVS Health (CVS) Q4 CY2025 Highlights:
- Revenue: $105.7 billion vs analyst estimates of $103.7 billion (8.2% year-on-year growth, 2% beat)
- Adjusted EPS: $1.09 vs analyst estimates of $1.00 (9.4% beat)
- Adjusted Operating Income: $2.60 billion vs analyst estimates of $2.46 billion (2.5% margin, 5.6% beat)
- Adjusted EPS guidance for the upcoming financial year 2026 is $7.10 at the midpoint, missing analyst estimates by 1%
- Operating Margin: 2%, in line with the same quarter last year
- Free Cash Flow Margin: 2.5%, up from 1.1% in the same quarter last year
- Same-Store Sales rose 16% year on year (10.2% in the same quarter last year)
- Market Capitalization: $96.18 billion
CEO Commentary"Our fourth quarter and full-year results demonstrate the progress we are making in transforming the health care experience with our unique collection of businesses. From lowering drug prices, to improving navigation of health care, to being the front door of care across our country, we are well positioned to achieve our ambition to be the most trusted health care company in America."
Company Overview
With over 9,000 retail pharmacy locations serving as neighborhood health destinations across America, CVS Health (NYSE:CVS) operates retail pharmacies, provides pharmacy benefit management services, and offers health insurance through its Aetna subsidiary.
Revenue Growth
A company’s long-term performance is an indicator of its overall quality. Any business can put up a good quarter or two, but many enduring ones grow for years. Luckily, CVS Health’s sales grew at a decent 8.4% compounded annual growth rate over the last five years. Its growth was slightly above the average healthcare company and shows its offerings resonate with customers.
We at StockStory place the most emphasis on long-term growth, but within healthcare, a half-decade historical view may miss recent innovations or disruptive industry trends. CVS Health’s recent performance shows its demand has slowed as its annualized revenue growth of 6% over the last two years was below its five-year trend. 
We can better understand the company’s revenue dynamics by analyzing its same-store sales, which show how much revenue its established locations generate. Over the last two years, CVS Health’s same-store sales averaged 12.2% year-on-year growth. Because this number is better than its revenue growth, we can see its sales from existing locations are performing better than its sales from new locations. 
This quarter, CVS Health reported year-on-year revenue growth of 8.2%, and its $105.7 billion of revenue exceeded Wall Street’s estimates by 2%.
Looking ahead, sell-side analysts expect revenue to grow 1.3% over the next 12 months, a deceleration versus the last two years. This projection doesn't excite us and indicates its products and services will face some demand challenges.
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Adjusted Operating Margin
Adjusted operating margin is one of the best measures of profitability because it tells us how much money a company takes home after subtracting all core expenses, like marketing and R&D. It also removes various one-time costs to paint a better picture of normalized profits.
CVS Health was profitable over the last five years but held back by its large cost base. Its average adjusted operating margin of 4.5% was weak for a healthcare business.
Analyzing the trend in its profitability, CVS Health’s adjusted operating margin decreased by 2.3 percentage points over the last five years. The company’s two-year trajectory also shows it failed to get its profitability back to the peak as its margin fell by 1.3 percentage points. This performance was poor no matter how you look at it - it shows its expenses were rising and it couldn’t pass those costs onto its customers.
This quarter, CVS Health generated an adjusted operating margin profit margin of 2.5%, in line with the same quarter last year. This indicates the company’s overall cost structure has been relatively stable.
Earnings Per Share
Revenue trends explain a company’s historical growth, but the long-term change in earnings per share (EPS) points to the profitability of that growth – for example, a company could inflate its sales through excessive spending on advertising and promotions.
Sadly for CVS Health, its EPS declined by 2.1% annually over the last five years while its revenue grew by 8.4%. This tells us the company became less profitable on a per-share basis as it expanded due to non-fundamental factors such as interest expenses and taxes.
We can take a deeper look into CVS Health’s earnings to better understand the drivers of its performance. As we mentioned earlier, CVS Health’s adjusted operating margin was flat this quarter but declined by 2.3 percentage points over the last five years. This was the most relevant factor (aside from the revenue impact) behind its lower earnings; interest expenses and taxes can also affect EPS but don’t tell us as much about a company’s fundamentals.
In Q4, CVS Health reported adjusted EPS of $1.09, down from $1.19 in the same quarter last year. Despite falling year on year, this print beat analysts’ estimates by 9.4%. Over the next 12 months, Wall Street expects CVS Health’s full-year EPS of $6.75 to grow 6.4%.
Key Takeaways from CVS Health’s Q4 Results
It was encouraging to see CVS Health beat analysts’ revenue expectations this quarter. We were also glad its EPS outperformed Wall Street’s estimates. On the other hand, its full-year EPS guidance slightly missed. Overall, this print had some key positives. Investors were likely hoping for more, and shares traded down 3.4% to $73.18 immediately after reporting.
Is CVS Health an attractive investment opportunity right now? If you’re making that decision, you should consider the bigger picture of valuation, business qualities, as well as the latest earnings. We cover that in our actionable full research report which you can read here (it’s free).
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