Is CVS Health Corporation (CVS) A Risky Investment?


CVS Health Corporation (NYSE:CVS) finished Thursday with an addition of $0.06 to close at $99.83, an upside of 0.06 percent. An average of 4,971,580 shares of common stock have been traded in the last five days. There was a fall of -$2.48 in the past week, and it reached a new high 29 times over the past 12 months. The last 20 days have seen an average of 4,624,605 shares traded, while the 50-day average volume stands at 4,787,856.

CVS stock has decreased by -1.29% in the last month. The company shares reached their 1-month lowest point of $97.75 on 09/01/22. With the stock rallying to its 52-week high on 02/08/22, shares of the company touched a low of $81.78 and a high of $111.25 in 52 weeks. It has reached a new high 8 times so far this year and lost -3.23% or -$3.33 in price. In spite of this, the price is down -10.27% from the 52-week high.

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Insider Transactions

50 days have passed since CVS Health Corporation (CVS) last reported insider trading activity. Lotvin Alan, who is EVP&President-PharmacyServices, most recently acquired $22,541 shares at $104.00 per share on Aug 04. In this transaction, the insider spent $2,344,264. EVP&President-PharmacyServices, Lotvin Alan, disposed of 120,899 shares at a price of $98.00 on Aug 03. The insider now owns more than $11,848,102 worth of shares. Prior to that, EVP/Pres, Health Care Benefits Finke Daniel P went on to Sale 9,546 shares at $100.00 each on Aug 03. An amount of $954,600 was transacted.

Valuation Metrics

CVS Health Corporation (CVS) has a trailing price-to-earnings (P/E) ratio of 16.22. The stock’s beta is 0.71. Other valuation ratios to consider include the trailing price-to-sales (P/S) ratio at 0.43, the price-to-book (PB) ratio at 1.74, and the price-to-cash flow ratio at 10.04.

The company has a payout ratio of 33.80%. The company’s most recent quarterly dividend payment was $0.55 a share, without any change from last year. Its latest increase dividend $0.05 reported on Friday December 10 2021.

Financial Health

The quick ratio of CVS Health Corporation for the three months ended March 30 was 0.70, and the current ratio was 0.90, indicating that the company is not able to meet its debt obligations. Further, the company has a long term debt to equity ratio of 0.68 and a total debt to equity ratio of 0.73 for the quarter ending March 30. Its gross profit as reported stood at $116.31 billion compared to revenue of $292.11 billion.

Earnings Surprise

For the three-month period that ended March 30, CVS Health Corporation had $2.88 billion in cash and short-term investments compared to $50.8 billion in total debt. In the quarter under review, the net income was up than the previous quarter. The company posted a net income of $2.95 billion in the quarter, while revenues of $2.31 billion were grew 5.69%. The analyst consensus anticipated CVS Health Corporation’s latest quarter earnings to come in at $2.15 per share, but it turned out to be $2.22, a 3.30% surprise. For the quarter, EBITDA amounted to $5.66 billion. Shareholders own equity worth $1.31 billion.

Technical Picture

From a technical analysis perspective, let’s take a brief look at CVS Health Corporation (CVS) price momentum. RSI 9-day as of the close on 22 September was 41.42%, suggesting the stock is Neutral, with historical volatility in this time frame at 17.91%.

As of today, CVS’s price is $101.02 -2.42% or -$2.48 from its 5-day moving average. CVS is currently trading -1.43% lower than its 20-day SMA and +3.85% higher than its 100-day SMA. However, the stock’s current price level is +6.83% above the SMA50 and +7.75% above the SMA200.

The stochastic %K and %D were 43.78% and 56.89%, respectively, and the average true range (ATR) was 2.06. With the 14-day stochastic at 35.28% and the average true range at 2.04, the RSI (14) stands at 45.76%. The stock has reached -1.02 on the 9-day MACD Oscillator while the 14-day reading was at -0.77.

Analyst Ratings

Loop Capital launched coverage on CVS Health Corporation (NYSE: CVS) in its analyst report released on June 17, 2022. The firm assigned the stock a Buy rating.


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