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Elevance Health (Elevance Health) Owner Earnings per Share (TTM)

: 4.46 (As of Mar. 2024)
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In 1986 Berkshire Hathaway Shareholder Letter, Warren Buffett defined owner earnings as follows:

"These represent (a) reported earnings plus (b) depreciation, depletion, amortization, and certain other non-cash charges...less (c) the average annual amount of capitalized expenditures for plant and equipment, etc. that the business requires to fully maintain its long-term competitive position and its unit volume (If the business requires additional working capital to maintain its competitive position and unit volume, the increment also should be included in (c))...Our owner-earnings equation does not yield the deceptively precise figures provided by GAAP, since (c) must be a guess - and one sometimes very difficult to make. Despite this problem, we consider the owner earnings figure, not the GAAP figure, to be the relevant item for valuation purposes - both for investors in buying stocks and for managers in buying entire businesses...All of this points up the absurdity of the 'cash flow' numbers that are often set forth in Wall Street reports. These numbers routinely include (a) plus (b) - but do not subtract (c)."

Elevance Health's Owner Earnings per Share (TTM) ended in Mar. 2024 was $4.46. It's Price-to-Owner-Earnings ratio for today is 119.33.


The historical rank and industry rank for Elevance Health's Owner Earnings per Share (TTM) or its related term are showing as below:

ELV' s Price-to-Owner-Earnings Range Over the Past 10 Years
Min: 6.58   Med: 13.53   Max: 120.28
Current: 119.27


During the past 13 years, the highest Price-to-Owner-Earnings ratio of Elevance Health was 120.28. The lowest was 6.58. And the median was 13.53.


ELV's Price-to-Owner-Earnings is ranked worse than
92.86% of 14 companies
in the Healthcare Plans industry
Industry Median: 13.065 vs ELV: 119.27

Elevance Health's Earnings per Share (Diluted) for the three months ended in Mar. 2024 was $9.59. Its Earnings per Share (Diluted) for the trailing twelve months (TTM) ended in Mar. 2024 was $26.46. It's PE Ratio ratio for today is 20.11.

Elevance Health's EPS without NRI for the three months ended in Mar. 2024 was $9.59. Its EPS without NRI for the trailing twelve months (TTM) ended in Mar. 2024 was $29.70. It's PE Ratio without NRI ratio for today is 17.92.


Elevance Health Owner Earnings per Share (TTM) Historical Data

The historical data trend for Elevance Health's Owner Earnings per Share (TTM) can be seen below:

* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.

* Premium members only.

Elevance Health Annual Data
Trend Dec14 Dec15 Dec16 Dec17 Dec18 Dec19 Dec20 Dec21 Dec22 Dec23
Owner Earnings per Share (TTM)
Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only 19.83 38.09 32.48 28.47 23.71

Elevance Health Quarterly Data
Jun19 Sep19 Dec19 Mar20 Jun20 Sep20 Dec20 Mar21 Jun21 Sep21 Dec21 Mar22 Jun22 Sep22 Dec22 Mar23 Jun23 Sep23 Dec23 Mar24
Owner Earnings per Share (TTM) Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only 44.28 42.31 30.33 23.71 4.46

Competitive Comparison

For the Healthcare Plans subindustry, Elevance Health's Price-to-Owner-Earnings, along with its competitors' market caps and Price-to-Owner-Earnings data, can be viewed below:

* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.


Elevance Health Price-to-Owner-Earnings Distribution

For the Healthcare Plans industry and Healthcare sector, Elevance Health's Price-to-Owner-Earnings distribution charts can be found below:

* The bar in red indicates where Elevance Health's Price-to-Owner-Earnings falls into.



Elevance Health Owner Earnings per Share (TTM) Calculation

In 1986 Berkshire Hathaway Shareholder Letter, Warren Buffett defined owner earnings as follows:

"These represent (a) reported earnings plus (b) depreciation, depletion, amortization, and certain other non-cash charges...less (c) the average annual amount of capitalized expenditures for plant and equipment, etc. that the business requires to fully maintain its long-term competitive position and its unit volume. (If the business requires additional working capital to maintain its competitive position and unit volume, the increment also should be included in (c))...Our owner-earnings equation does not yield the deceptively precise figures provided by GAAP, since (c) must be a guess - and one sometimes very difficult to make. Despite this problem, we consider the owner earnings figure, not the GAAP figure, to be the relevant item for valuation purposes - both for investors in buying stocks and for managers in buying entire businesses...All of this points up the absurdity of the 'cash flow' numbers that are often set forth in Wall Street reports. These numbers routinely include (a) plus (b) - but do not subtract (c)."

To make it simple, then you will have:

Owner Earnings per Share (TTM) = (Net Income + Depreciation, Depletion and Amortization + Change In Deferred Tax - 5Y Average of Maintenance Capital Expenditure + Change In Working Capital) / Shares Outstanding (Diluted Average)

Elevance Health's Owner Earnings per Share (TTM) Calculation:

TTM / Last Quarter Average of Last 20 Quarters
Net Income 6,244
Depreciation, Depletion and Amortization 1,614
Change In Deferred Tax -211
5Y Average of Maintenance Capital Expenditure 1,025
Change In Working Capital -5,577
Shares Outstanding (Diluted Average) 234

1. Start with "Net Income" from income statement. Elevance Health's Net Income for the trailing twelve months (TTM) ended in Mar. 2024 was $6,244 Mil.

2. "Depreciation, Depletion and Amortization" is from cashflow statement. Elevance Health's Depreciation, Depletion and Amortization for the trailing twelve months (TTM) ended in Mar. 2024 was $1,614 Mil. This needs to be added back because company does not actually need to pay cash for it. It is a non-cash item.

3. Other non-cash charges usually include "Stock Based Compensation" and "Change In Deferred Tax":
However, to be conservative, GuruFocus will not add Stock Based Compensation back to net income. Elevance Health's Change In Deferred Tax for the trailing twelve months (TTM) ended in Mar. 2024 was $-211 Mil.

4. Average maintenance capital expenditure over a business/industry cycle: 5-Year Average Maintenance Capital Expenditure = $1,025 Mil

It is usually best to take a long-term average of maintenance capital expenditure. Ideally this would be as long as 10 years and include at least one economic downturn. However, since many companies do not have as long as 10-year history, here GuruFocus uses the latest 5 years data to do the calculation. To smooth out unusual years but reflect recent developments, we take an average of the 5 year maintenance capital expenditure.

The following shows how to get maintenance capital expenditure.

First, calculate the revenue change regarding to the previous quarter. If the revenue decreased from the previous quarter, then the Maintenance Capital Expenditure = Capital Expenditure (positive).
Second, if the revenue increased from the previous quarter, then calculate the percentage of Net PPE as of corresponding Revenue.
Growth Capital Expenditure = Percentage of Property, Plant and Equipment as of corresponding Revenue * Revenue Increase
Third, calculate Capital Expenditure (positive) - Growth Capital Expenditure.
If [Capital Expenditure (positive) - Growth Capital Expenditure] was negative, then the Maintenance Capital Expenditure = Capital Expenditure (positive).
If [Capital Expenditure (positive) - Growth Capital Expenditure] was positive, then the Maintenance Capital Expenditure = Capital Expenditure (positive) - Growth Capital Expenditure.
Fourth, get the average of the 5 years maintenance capital expenditure.

Elevance Health's 5-Year Average Maintenance Capital Expenditure = $1,025 Mil

5. "Change In Working Capital" is from cashflow statement. Elevance Health's Change In Working Capital for the trailing twelve months (TTM) ended in Mar. 2024 was $-5,577 Mil.
Note: GuruFocus' Change in Working Capital is provided by Morningstar. It is calculated by adding the items under "Change in operating assets and liabilities" (may refer to a different name for different company) section in Cash Flow Statement from original financial report. And sometimes it includes non-current parts of assets and liabilities.

6. Elevance Health's Shares Outstanding (Diluted Average) for the months ended in Mar. 2024 was 234.200 Mil.

Elevance Health's Onwer Earnings Per Share for Mar. 2024 is calculated as:

Owner Earnings per Share (TTM)
=( Net Income+Depreciation, Depletion and Amortization+Change In Deferred Tax
=( 6244 +1614+-211
-5Y Avg of Maintenance CAPEX+Change In Working Capital )/Shares Outstanding (Diluted Average)
-1024.9489809222+-5577)/234.200
=4.46

Price-to-Owner-Earnings=Current Price/Owner Earnings per Share (TTM)
=532.22/4.46
=119.33

* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.


Be Aware

Assumption: Companies usually do not report maintenance capital expenditures and growth capital expenditures separately. Here we use estimated numbers and average them over 5 years. The method to estimate maintenance capital expenditures can be found in above part 4.

Note: GuruFocus' Change In Working Capital is provided by Morningstar. It is calculated by adding the items under "Change in operating assets and liabilities" (may refer to a different name for different company) section in Cash Flow Statement from original financial report. And it includes non-current parts of assets and liabilities.


Elevance Health Owner Earnings per Share (TTM) Related Terms

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Elevance Health (Elevance Health) Business Description

Traded in Other Exchanges
Address
220 Virginia Avenue, Indianapolis, IN, USA, 46204
Elevance Health remains one of the leading health insurers in the U.S., providing medical benefits to 48 million medical members as of June 2023. The company offers employer, individual, and government-sponsored coverage plans. Elevance differs from its peers in its unique position as the largest single provider of Blue Cross Blue Shield branded coverage, operating as the licensee for the Blue Cross Blue Shield Association in 14 states. Through acquisitions, such as the Amerigroup deal in 2012 and MMM in 2021, Elevance's reach expands beyond those states through government-sponsored programs such as Medicaid and Medicare Advantage plans, too.
Executives
Blair Williams Todt officer: EVP and Chief Legal Officer 8735 HENDERSON ROAD, TAMPA FL 33625
Ronald W Penczek officer: SVP, Chief Accounting Officer 120 MONUMENT CIRCLE, INDIANAPOLIS IN 46204
Mark Kaye officer: EVP & CFO Designate 7 WORLD TRADE CENTER, 250 GREENWICH ST, NEW YORK NY 10007
Dixon Robert L Jr director 120 MONUMENT CIRCLE, INDIANAPOLIS IN 46204
Gloria M Mccarthy officer: EVP, Office of the CEO WELLPOINT, INC, 120 MONUMENT CIRCLE, INDIANAPOLIS IN 46204
Kendrick Charles Morgan Jr officer: EVP & President, Commercial 220 VIRGINIA AVE, INDIANAPOLIS IN 46204
Deanna D Strable-soethout director C/O PRINCIPAL FINANCIAL GROUP, 711 HIGH ST., DES MOINES IA 50392
Ramiro G Peru director WELLPOINT, INC, 120 MONUMENT CIRCLE, INDIANAPOLIS IN 46260
Peter D Haytaian officer: EVP & Pres., Govt. Bus. Div. 220 VIRGINIA AVE, INDIANAPOLIS IN 46204
Susan D. Devore director C/O PREMIER, INC., 13034 BALLANTYNE CORPORATE PLACE, CHARLOTTE NC 28277
Ryan M. Schneider director 1680 CAPITAL ONE DRIVE, MCLEAN VA 22102
John E Gallina officer: SVP & Chief Accounting Officer 120 MONUMENT CIRCLE, INDIANAPOLIS IN 46204
Julie A Hill director WELLPOINT, INC, 120 MONUMENT CIRCLE, INDIANAPOLIS IN 46204
Thomas C Zielinski officer: EVP & General Counsel
Jeffrey D. Alter officer: EVP, IngenioRx & Anthem Health 4330 LA JOLLA VILLAGE DRIVE, SUITE 200, SAN DIEGO CA 92122