Shares of
Anthem, Inc.
ANTM
have rallied 27% in a year compared with the
industry
’s growth of 18.3%. The
Medical
sector and the S&P 500 composite index have lost 20.6% and 3.6%, respectively, in the same time frame. With a market capitalization of $118.8 billion, the average volume of shares traded in the last three months was 1.2 million.
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Improving revenues resulting from membership growth, well-performing Medicare and Medicaid businesses, several buyouts and strong financial standing continue to drive Anthem.
This leading U.S. health benefits company, carrying Zacks Rank #3 (Hold), has a solid track record of beating estimates in each of the trailing five quarters.
Can ANTM Retain the Momentum?
The Zacks Consensus Estimate for 2022 earnings is pegged at $28.54, indicating an increase of 9.9% on 11.9% higher revenues of $153.2 billion. The consensus mark for 2023 earnings stands at $32.41, suggesting growth of 13.6% on 5.3% higher revenues of $161.4 billion.
The consensus mark for 2022 earnings has moved north 0.4%, while that for 2023 has moved up 0.5% in the past 60 days, reflecting analysts’ optimism.
Revenues of Anthem continue to benefit from premium rate increases and membership growth. Over the last 10 years (2011-2021), the top line has witnessed a CAGR of 8.8%. Several contract wins and renewals, courtesy of enhanced and affordable Medicare and Medicaid plans devised by the healthcare provider, are likely to continue driving membership figures within ANTM’s Government business. This year, management anticipates revenues of around $152 billion, which indicates an increase of 11% from the 2021 reported figure.
Anthem resorts to numerous acquisitions to bolster its business portfolio, driving membership growth and expanding its geographical presence. ANTM’s acquisition of New York-based Integra Managed Care to boost its Medicaid business is the company’s most recent buyout.
The healthcare provider remains committed to upgrading its portfolio by delving beyond merely offering traditional health insurance and including enhanced products and services meant to boost whole health care. In line with this, Anthem is focused on strengthening its reputation from being a health benefits organization to a reliable health partner. To fulfill the endeavor, Anthem announced its intention to change its name to Elevance Health, Inc. The name change received approval from ANTM’s shareholders last month. As a result, Anthem will start trading on the New York Stock Exchange (NYSE) from Jun 28, 2022, under the new ticker symbol ELV.
Anthem boasts a solid financial standing backed by a strong cash balance and adequate cash-generating abilities. ANTM generated cash from operations worth $2.5 billion in the first quarter of 2022, which increased 1.4% year over year. Riding on a solid financial position, the healthcare provider turns to prudent capital deployment moves through share buybacks or
dividend
payments.
Anthem boasts an impressive
VGM Score
of A. VGM Score helps identify stocks with the most attractive value, the best growth and the most promising momentum.
Stocks to Consider
Some better-ranked stocks in the
Medical
space are
UnitedHealth Group Incorporated
UNH
,
Assertio Holdings, Inc.
ASRT
and
AMN Healthcare Services, Inc.
AMN
. While Assertio sports a Zacks Rank #1 (Strong Buy), UnitedHealth Group and AMN Healthcare carry a Zacks Rank #2 (Buy) at present. You can see
the complete list of today’s Zacks #1 Rank stocks here
.
UnitedHealth Group’s earnings surpassed estimates in each of the last four quarters, the average surprise being 3.73%. The Zacks Consensus Estimate for UNH’s 2022 earnings suggests an improvement of 14.4% from the year-ago reported figure, while the same for revenues indicates growth of 11.6%. The consensus mark for UnitedHealth Group’s 2022 earnings has moved north by 0.3% in the past 30 days.
Assertio has a trailing four-quarter earnings surprise of 26.39%, on average. The Zacks Consensus Estimate for ASRT’s 2022 earnings is pegged at 40 cents, which compares favorably with a loss of 3 cents reported in the year-ago quarter. The Zacks Consensus Estimate for Assertio’s 2022 earnings has moved north by 14.3% in the past 30 days.
The bottom line of AMN Healthcare outpaced estimates in each of the trailing four quarters, the average surprise being 15.60%. The Zacks Consensus Estimate for AMN’s 2022 earnings indicates a rise of 30.3% year over year, while the same for revenues suggests an improvement of 25.9%. The consensus mark for AMN Healthcare’s 2022 earnings has moved north by 3.3% in the past 30 days.
Shares of UnitedHealth Group, Assertio and AMN Healthcare have gained 22%, 66.6% and 2.9%, respectively, in a year.
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