CVS Stock Falls Despite Q3 Earnings & Revenue Beat, '25 EPS View Up

CVS Health Corporation CVS posted third-quarter 2025 adjusted earnings per share (EPS) of $1.60, up 46.8% year over year. The metric topped the Zacks Consensus Estimate by 17.65%. The adjusted EPS figure considers certain asset amortization costs, loss on assets held for sale and other adjustments.On a reported basis, the company’s GAAP loss was $3.13 compared to EPS of 7 cents in the prior-year period.CVS Q3 RevenuesRevenues rose 7.8% year over year to $102.87 billion. The top line surpassed the Zacks Consensus Estimate by 4.66%. This year-over-year upside was driven by revenue growth across all segments.Following the announcement, CVS shares were down 2.1% in the pre-market trading session today.Detailed Analysis of CVS’ Q3 RevenuesHealth Services revenues increased 11.6% year over year to $49.27 billion, mainly driven by pharmacy drug mix and brand inflation, partially offset by continued pharmacy client price improvements.Total pharmacy claims processed fell 1.8% on a 30-day equivalent basis compared with the prior-year level. CVS Health Corporation Price, Consensus and EPS Surprise CVS Health Corporation price-consensus-eps-surprise-chart | CVS Health Corporation QuoteRevenues in the Pharmacy & Consumer Wellness segment rose 11.7% year over year to $36.21 billion. The upside was primarily driven by the pharmacy drug mix and increased prescription volume.Within the Health Care Benefits segment, the company registered revenues worth $36 billion, up 9.1% 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’ Margin PerformanceThe total cost of sold products rose 7.7% to $57.05 billion in the third quarter. The gross profit jumped 7.9% to $45.83 billion. The gross margin expanded 3 basis points (bps) to 44.6%.The adjusted operating margin in the quarter under review expanded 12 bps to 33.6% despite a 6.9% rise in total operating expenses ($11.29 billion).Liquidity Position of CVSCVS Health exited the third quarter of 2025 with cash and cash equivalents of $9.10 billion compared with $11.79 billion at the end of the second quarter. The long-term debt was $60.51 billion compared with $57.29 billion in the previous quarter.The cumulative net cash provided by operating activities at the end of the third quarter of 2025 was $7.25 billion, almost the same as the year-ago period’s figure.CVS’ 2025 GuidanceCVS Health raised its 2025 adjusted EPS guidance range to $6.55-$6.65 (earlier $6.30 to $6.40). The Zacks Consensus Estimate for the metric is currently pegged at $6.36.Our Take on CVS StockCVS Health exited the third quarter of 2025 with both earnings and revenues beating their respective estimates. The metrics were also 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. Despite higher costs and expenses, the margins remained favorable in the quarter. In addition, the raised full-year outlook for the bottom line is also encouraging.Meanwhile, persistent pharmacy reimbursement pressure continues to weigh on results.CVS’ Zacks Rank and Key PicksCVS Health currently carries a Zacks Rank #3 (Hold).Some better-ranked stocks from the broader medical space are Medpace Holdings MEDP, Intuitive Surgical ISRG and Boston Scientific BSX.Medpace, currently sporting a Zacks Rank #1 (Strong Buy), reported a third-quarter 2025 EPS of $3.86, which surpassed the Zacks Consensus Estimate by 10.29%. Revenues of $659.9 million beat the Zacks Consensus Estimate by 3.04%. You can see the complete list of today’s Zacks #1 Rank stocks here.MEDP has an estimated earnings growth rate of 17.1% for 2025 compared with the industry’s 16.6% growth. The company surpassed earnings estimates in each of the trailing four quarters, the average surprise being 14.28%.Intuitive Surgical, carrying a Zacks Rank #2 (Buy) at present, posted a third-quarter 2025 adjusted EPS of $2.40, exceeding the Zacks Consensus Estimate by 20.6%. Revenues of $2.51 billion topped the Zacks Consensus Estimate by 3.9%.ISRG has an estimated long-term earnings growth rate of 15.7% compared with the industry’s 11.9% growth. The company’s earnings outpaced estimates in each of the trailing four quarters, the average surprise being 16.34%.Boston Scientific, currently carrying a Zacks Rank #2, reported a third-quarter 2025 adjusted EPS of 75 cents, which surpassed the Zacks Consensus Estimate by 5.6%. Revenues of $5.07 billion topped the Zacks Consensus Estimate by 1.9%.BSX has an estimated long-term earnings growth rate of 16.4% compared with the industry’s 13.5% growth. The company’s earnings beat estimates in each of the trailing four quarters, the average surprise being 7.36%.#1 Semiconductor Stock to Buy (Not NVDA)The incredible demand for data is fueling the market's next digital gold rush. As data centers continue to be built and constantly upgraded, the companies that provide the hardware for these behemoths will become the NVIDIAs of tomorrow.One under-the-radar chipmaker is uniquely positioned to take advantage of the next growth stage of this market. It specializes in semiconductor products that titans like NVIDIA don't build. It's just beginning to enter the spotlight, which is exactly where you want to be.See This Stock Now for Free >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Boston Scientific Corporation (BSX): Free Stock Analysis Report Intuitive Surgical, Inc. (ISRG): Free Stock Analysis Report CVS Health Corporation (CVS): Free Stock Analysis Report Medpace Holdings, Inc. (MEDP): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks