CVS Health Corp

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CVS : NYSE : Health Care
$87.33 up 1.40 | 1.60%
Today's Range: 86.25 - 87.41
Avg. Daily Volume: 5,353,800
10/20/16 - 3:43 PM ET

Financial Analysis

CVS HEALTH CORP's gross profit margin for the second quarter of its fiscal year 2016 has decreased when compared to the same period a year ago. Even though sales increased, the net income has decreased. CVS HEALTH CORP has weak liquidity. Currently, the Quick Ratio is 0.54 which shows a lack of ability to cover short-term cash needs. The company's liquidity has decreased from the same period last year.

During the same period, stockholders' equity ("net worth") has decreased by 6.37% from the same quarter last year. Overall, the key liquidity measurements indicate that the company is in a position in which financial difficulties could develop in the future.

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Income Statement Q2 FY16 Q2 FY15
Net Sales ($mil)43725.037169.0
EBITDA ($mil)3056.02771.0
EBIT ($mil)2437.02283.0
Net Income ($mil)924.01272.0

Balance Sheet Q2 FY16 Q2 FY15
Cash & Equiv. ($mil)1207.01404.0
Total Assets ($mil)92748.074668.0
Total Debt ($mil)28636.013145.0
Equity ($mil)34760.037127.0

Profitability Q2 FY16 Q2 FY15
Gross Profit Margin17.4718.54
EBITDA Margin6.987.45
Operating Margin5.576.14
Sales Turnover1.81.95
Return on Assets5.196.37
Return on Equity13.8212.82
Debt Q2 FY16 Q2 FY15
Current Ratio1.111.3
Interest Expense284.0136.0
Interest Coverage8.5816.79

Share Data Q2 FY16 Q2 FY15
Shares outstanding (mil)1065.01118.0
Div / share0.430.35
Book value / share32.6433.21
Institutional Own % n/a n/a
Avg Daily Volume5103454.05008333.0


BUY. This stock's P/E ratio indicates a discount compared to an average of 21.86 for the Food & Staples Retailing industry and a discount compared to the S&P 500 average of 24.54. To use another comparison, its price-to-book ratio of 2.70 indicates valuation on par with the S&P 500 average of 2.72 and a discount versus the industry average of 3.50. The current price-to-sales ratio is well below the S&P 500 average, but above the industry average. Upon assessment of these and other key valuation criteria, CVS HEALTH CORP proves to trade at a discount to investment alternatives within the industry.

1 2 3 4 5
premium   discount
  Price/Cash Flow
1 2 3 4 5
premium   discount
CVS 20.28 Peers 21.86   CVS 10.10 Peers 10.63

Average. An average P/E ratio can signify an industry neutral price for a stock and an average growth expectation.

CVS is trading at a valuation on par with its peers.


Average. The P/CF ratio, a stock’s price divided by the company's cash flow from operations, is useful for comparing companies with different capital requirements or financing structures.

CVS is trading at a valuation on par to its peers.

1 2 3 4 5
premium   discount
  Price to
1 2 3 4 5
premium   discount
CVS 13.44 Peers 17.98   CVS 0.76 Peers 2.18

Discount. A lower price-to-projected earnings ratio than its peers can signify a less expensive stock or lower future growth expectations.

CVS is trading at a discount to its peers.


Discount. The PEG ratio is the stock’s P/E divided by the consensus estimate of long-term earnings growth. Faster growth can justify higher price multiples.

CVS trades at a significant discount to its peers.

1 2 3 4 5
premium   discount
  Earnings Growth
1 2 3 4 5
lower   higher
CVS 2.70 Peers 3.50   CVS 4.83 Peers -5.31

Discount. A lower price-to-book ratio makes a stock more attractive to investors seeking stocks with lower market values per dollar of equity on the balance sheet.

CVS is trading at a discount to its peers.


Higher. Elevated earnings growth rates can lead to capital appreciation and justify higher price-to-earnings ratios.

CVS is expected to have an earnings growth rate that significantly exceeds its peers.

1 2 3 4 5
premium   discount
  Sales Growth
1 2 3 4 5
premium   discount
CVS 0.56 Peers 0.53   CVS 14.52 Peers 4.03

Average. In the absence of P/E and P/B multiples, the price-to-sales ratio can display the value investors are placing on each dollar of sales.

CVS is trading at a valuation on par with its industry on this measurement.


Higher. A sales growth rate that exceeds the industry implies that a company is gaining market share.

CVS has a sales growth rate that significantly exceeds its peers.



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