Aajan
Enhanced Health (NYSE:ELV) fell to pre-market lows on Wednesday after the company forecast a lower-than-expected earnings outlook for 2023 with membership growth of just ~1%, while Medicaid and Medicare Advantage driving performance in 2022.
In 2022, Elevance (ELV) added 2.2 million members to join total medical membership to ~47.5 million with ~5% YoY growth as the Medicaid business and organic growth in Medicare Advantage boost the government business.
The company’s Q4 2022 member count grew by 248,000, fueled by organic growth in Medicaid, primarily due to the pause in eligibility recertification and the Vivida Health acquisition that brought 29,000 members come to Elevance (ELV).
By 2023, the company expects its medical enrollment to hit 47.4K – 48.5K, meaning ~1% YoY growth on average.
However, the insurer beat Wall Street forecasts with its Q4 2022 financial report as operating revenue grew ~10% year over year to $39.7 billion and operating government business met Wall Street estimates, adding $24.6 billion in revenue with ~13% year-over-year growth.
Full-year revenue grew ~14% YoY to $155.7 billion as premium revenue grew ~14% YoY to $133.2 billion, even as quarterly premium revenue missed estimates of 33, 6 billion USD with ~9% YoY growth.
For 2023, Altitude (ELV) expects premium revenue to hit $140 billion, bringing operating revenue to $164 billion, in line with consensus.
Meanwhile, the company’s trade & specialty business added ~$10.4 billion, less than Wall Street had anticipated. At the same time, pharmaceutical benefits management company CarelonRx, formerly known as IngenioRx, surpassed estimates bringing in $7.5 billion in revenue with ~11% year-over-year growth.
Cost-benefit ratios for the quarter and full year fell 10 basis points to 89.4% and 87.4%, respectively, due to certain adjustments to reflect recent regulatory requirements. Height (ELV) posted a ~12% SG&A ratio for the quarter, showing a drop of 20 basis points as adjusted earnings per share improved by ~2% YoY to $5.23 over estimate.
Read: Looking for Alpha collaborator, Samuel Petersson gives Buy rating on Elevance (ELV), citing the company’s financial performance, balance sheet, dividends and share repurchases.
