CVS Stock Up on Q2 Earnings & Revenue Beat, '25 EPS View Raised

CVS Health Corporation CVS posted second-quarter 2025 adjusted earnings per share (EPS) of $1.81, down 1.1% year over year. The metric topped the Zacks Consensus Estimate by 23.1%. 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 earnings were 80 cents per share compared with $1.41 in the prior-year period.CVS Q2 RevenuesRevenues rose 8.4% year over year to $98.91 billion. The top line surpassed the Zacks Consensus Estimate by 5.5%. This year-over-year upside was driven by revenue growth across all segments.Following the announcement, CVS shares rose nearly 7.8% in the pre-market trading session today.Detailed Analysis of CVS’ Q2 Earnings ReleaseHealth Services revenues increased 10.2% year over year to $46.45 billion, mainly driven by pharmacy drug mix and brand inflation, partially offset by continued pharmacy client price improvements.Total pharmacy claims processed remained relatively consistent on a 30-day equivalent basis compared with the prior-year level. Revenues in the Pharmacy & Consumer Wellness segment rose 12.5% year over year to $33.58 billion. The upside was primarily driven by the pharmacy drug mix and increased prescription and front store volume. Within the Health Care Benefits segment, the company registered revenues worth $36.26 billion, up 11.6% 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 8% to $54.00 billion in the second quarter. The gross profit rose 8.9% to $44.91 billion. The gross margin expanded 20 basis points (bps) to 45.4%.The adjusted operating margin in the quarter under review expanded 20 bps to 34.1% despite an 8.4% rise in total operating expenses ($11.21 billion).CVS Liquidity PositionCVS Health exited the second quarter of 2025 with cash and cash equivalents of $11.79 billion compared with $10.08 billion at the end of the first quarter. The long-term debt was $57.29 billion compared with $59.04 billion in the previous quarter. CVS Health Corporation Price, Consensus and EPS Surprise CVS Health Corporation price-consensus-eps-surprise-chart | CVS Health Corporation QuoteThe cumulative net cash provided by operating activities at the end of the second quarter of 2025 was $6.45 billion compared with $7.99 billion in the year-ago period.CVS’ 2025 GuidanceCVS Health raised its 2025 adjusted EPS guidance to $6.30-$6.40 from $6.00-$6.20. The Zacks Consensus Estimate for the metric is pegged at $6.12.Our Take on CVS StockCVS Health exited the second quarter of 2025 on a solid note, with earnings and revenues beating their respective estimates. The bottom line decreased on a year-over-year basis but benefited from an increase in the Health Care Benefits and Pharmacy & Consumer Wellness segments’ operating results. The expansion of both margins in the quarter is highly encouraging. Though the company raised its EPS outlook for the full year to reflect strong performance across each of its businesses, it maintains a cautious view on elevated cost trends and possible macro headwinds ahead. CVS’ Zacks Rank and Other Key PicksCVS Health currently carries a Zacks Rank #2 (Buy).Some other top-ranked stocks from the broader medical space are Boston Scientific BSX, Cardinal Health CAH and Cencora COR.Boston Scientific, carrying a Zacks Rank #2 at present, reported a second-quarter 2025 adjusted EPS of 75 cents, which beat the Zacks Consensus Estimate by 4.2%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.Revenues of $5.06 billion topped the Zacks Consensus Estimate by 2.3%. BSX has a long-term earnings growth rate of 14% compared with the industry’s 14.2%. Cardinal Health, carrying a Zacks Rank #2 at present, posted third-quarter fiscal 2025 adjusted EPS of $2.35, which exceeded the Zacks Consensus Estimate by 9.3%. Revenues of $54.88 billion missed the Zacks Consensus Estimate by 0.3%. CAH has an estimated long-term earnings growth rate of 10.9% compared with the industry’s 9.9%. Cencora currently carries a Zacks Rank #2. The Zacks Consensus Estimate for third-quarter fiscal 2025 adjusted EPS is currently pegged at $3.78 and the same for revenues is pinned at $80.33 billion.Cencora has an estimated long-term growth rate of 12.8%. COR’s earnings yield of 5.4% compares favorably with the industry’s 4.1%.One Big Gain, Every Trading DayTo help you take full advantage of this market, you’re invited to access every stock recommendation in all our private portfolios - for just $1.Zacks private portfolio services that closed 256 double and triple-digit winners in 2024 alone. That’s about one big gain every day the market was open. 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