Elevance Health, Inc. (ELV) Downgrades 2025 Earnings Amid Rising Medical Costs

We recently compiled a list of 10 Most Undervalued Healthcare Stocks to Buy According to Analysts. Elevance Health, Inc. stands third on our list among the most undervalued healthcare stocks.

Elevance Health, Inc. (NYSE:ELV) is a major U.S. healthcare company, known for its insurance brands Anthem and WellPoint, and its growing Carelon health services arm. It serves around 45.6 million medical plan members and is recognized for integrating technology and value-based care to improve healthcare delivery.

The company is facing increased healthcare utilization and rising medical costs, especially in the ACA and Medicaid segments. This has led to a downgrade in full-year 2025 earnings. A “market-wide morbidity shift” is evident, with new ACA enrollees using emergency services at nearly double the rate of commercial members, and Medicaid patients showing higher acuity due to redeterminations.

Amid these challenges, some investors see Elevance Health, Inc. (NYSE:ELV) as one of the most undervalued stocks in the healthcare sector, given its long-term positioning and strategic adjustments. The company expects a surge in elective procedures by Q4 2025 as members act ahead of expiring tax credits in 2026 that could raise their out-of-pocket costs.

To address these pressures, the business is ramping up AI-driven tools for risk detection, care coordination, and operational efficiency. It’s also expanding value-based care contracts, particularly in behavioral health and oncology, with over one-third of benefit expenses tied to risk-sharing models. The company is adjusting pricing strategies for ACA plans and advocating for Medicaid access amid potential regulatory changes.

A healthcare professional discussing a treatment plan with a patient in an outpatient clinic.

Though total membership fell by 212,000 in Q2 due to Medicaid attrition, the Medicare Advantage segment continues to grow. Elevance Health, Inc. (NYSE:ELV) is prioritizing long-term financial stability over aggressive member growth as it navigates rising costs, shifting regulations, and post-pandemic care patterns.

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