CVS Health has had a rough year. The company’s stock is down 24%, despite recent stock market highs that have sent other stocks soaring. But are its recent issues really a sign of long-term trouble, or is now the right time to buy the dip? Let’s dig deeper into this unique company.
Why Their Business Model Stands Out
CVS Health has become an absolute behemoth in the healthcare industry. The retail pharmacy chain may be the most familiar part of the company, but CVS Health also offers home health solutions, pharmacy benefits, and even health insurance (in partnership with Aetna). This makes it a highly diversified stock opportunity in a high-demand industry. Demand for healthcare is only expected to rise over the coming years as the number of senior citizens rises and breakthroughs in diagnosis and treatment allow them to live longer lives.
What The Analysts Are Saying
Right now, Wall Street is bearish on CVS Health due to the current headwinds the company faces. Medical costs are rising, but Medicare Advantage rates aren’t keeping pace. This, combined with the fact that the industry as a whole is still dealing with fallout from the pandemic and stubbornly high interest rates, has caused problems for a lot of healthcare companies.
However, CVS Health has a lot going for it. In addition to its diversified business lines, the company has been experiencing reasonably steady top-line and bottom-line growth over the past several years. It’s currently trading at a steep discount of just 11 times trailing earnings. This makes it an attractive proposition for those willing to ride out the current challenges. It could take some time for things to turn around in the healthcare industry as a whole, so traders seeking explosive growth should look elsewhere. But if you want to get in on a large, consistently growing company that is likely to see significant gains in the coming years, CVS Health could be a smart buy.
Neither CVS nor Stocks.News have positions in this company.
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Contributing Writer
Lisa Fritscher has been a contributing writer for App.Stock.News since 2024. Lisa has been interested in investing since winning The Stock Market Game in high school. In more than a decade as a professional writer, she has written consumer-facing financial information and advice articles for a wide variety of publications. She has a Bachelor of Arts in Psychology from the University of South Flori...