Elevance Health (NYSE: ELV) was close to a market selloff on Wednesday after the company reported lower-than-expected revenue in 2023 and membership growth of ~1%, while Medicaid and Medicare Advantage drove its 2022 performance.
In 2022, Elevance (ELV) added 2.2M members taking total hospital membership to ~47.5M and ~5% YoY growth as the Medicaid business and organic growth in Medicare Advantage boosted the state business.
The company’s Q4 2022 membership grew by 248K, driven by organic growth in Medicaid primarily due to the suspension of re-admissions and the acquisition of Vivida Health which brought 29K members to Elevance (ELV).
For 2023, the company expects its medical registration to reach 47.4K – 48.5K, which means ~1% YoY growth in the middle.
However, the health insurer beat street forecasts with its Q4 2022 earnings as operating income rose ~10% YoY to $39.7B, and the public sector business met Wall Street estimates, adding revenue of $24.6B and ~13% YoY growth. .
Full-year revenue rose ~14% YoY to $155.7B while core revenue grew ~14% YoY to $133.2B, although quarterly revenue missed estimates at $33.6B with ~9% YoY growth.
For 2023, Elevance ( ELV ) expects initial revenue to reach $140B, based on operating income of up to $164B, according to the agreement.
Meanwhile, the company’s private equity business added ~$10.4B short of Wall Street’s forecasts. At the same time, pharmacy operator CarelonRx, formerly known as IngenioRx, is estimated to bring in $7.5B in revenue and ~11% YoY growth.
Gross margin for the quarter and full year decreased by 10bps to 89.4% and 87.4%, respectively, driven by other adjustments to reflect current demand. Elevance ( ELV ) posted a ~12% SG&A margin in the quarter, reflecting a 20bps decline as adjusted earnings per share rose ~2% YoY to $5.23 to beat estimates.
Read: Seeking Alpha shareholder Samuel Petersson has issued a Buy rating on Elevance (ELV), citing the company’s financial performance, balance sheet, earnings, and share price.